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Why is it that the slightest loss of oil (Tanker crash,pipeline leak), will cause a rise in prices; but any discovery of new oil fields never results in lower prices?
News of a pipeline problem can indeed have an immdiate impact on oil prices - thats because; 1) its a fact which has just happened and 2) the supply of oil and related products is really tight just now. Someone who needs oil today will pay a premium to ensure its supply - otherwise it could have a more serious impact on their industrial process (and cause them greater losses).
New oil field discoveries (e.g. what Chrevon might have found under the Gulf of Mexico) are highly speculative. Years of work will be required just to establish how commerical this find is - before years more work to get it to the surface. The market has been dissappointed before - hence news like this doesn't have so much impact.
Homer J. Simpson
Because the loss of supply reduces supply in market today. The discovery of a new deposit, on the other hand, doesn't affect the current market price because it takes time to bring a new oil field into production. Thus it lowers prices in the future, but not the present.
PonderinStuff
That is an excellent question; one I've wondered about myself. Unfortunately I don't have an answer but I'll watch your posting to see if someone else has a reasonable (and believable) explanation.
Divinequeen
Low supply means more money and more money means expense cuts.
DR
Oil production is at capacity and is currently barely even with demand, which current wisdom says is going to grow expotentially in the next several years. Any change that reduces oil production anywhere in the chain from ground to ultimate consumer immediately causes supply to fall below demand, thus driving up prices. In a world where demand is known to be rising significantly, this magnifies the impact that supply reductions have on price.
On the other hand, oil finds will not be turned into usable products anytime soon; in fact, because of regulations and politics and all those good things, they might NEVER become oil products. Thus they have no affect on supply for the foreseeable future.
If there was an oil find that was so huge as to increase known reserves by a double digit percentage THAT MIGHT have a limited affect on current prices. However a lot of factors would need to be met to do so: (a) the reserve estimate would have to be reliable (b) the oil would have to be cost effective at current prices to extract (c) the oil reserves would not be encumbered by environmental or political restrictions or found in a country like North Korean where the government is extremely unreliable. Even if all those criteria were met, the reduction in oil prices would still be minimal because they would still have no impact on supply in the near term. (And, frankly, such a reserve is not at all likely to be found.)
Gudsud55
Market is more sensative to negative possibilties, which results in to price rise, where as does no responce to positive cause.
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