Gas prices soar!

77% don't like Bush because of high gas prices? Who cares? I'd bet you find more than 70% think a 10lbs ball will fall faster than a 5lbs ball. People's ignorance of sophisticated concepts like futures markets is legion.

I really don’t know what to say to you. If you don’t think the ongoing trouble in the ME puts future supplies of oil in some doubt, then you operating with a world view quite at odds with the rest of humanity. Additionally, people like are the reason a new refinery hasn’t been built in the US in the last THIRTY YEARS. Do you think a supply choke point like refineries (many of which have still not reached 100% since Katrina) might have something do with supply?

to wit:


Look, you’re Marxist / socialist world view has failed every time it’s tried, despite countless attempts and permutations. Markets work and they work every single time. Market forces are a real as gravity.

This increase in oil prices will curb demand and promote alternatives. But market externalities (like Iran threatening everybody in earshot with nukes) will drive prices higher as buyers attempt to secure a supply of a commodity who’s supply might be interrupted by say, Iran sinking oil tankers.

If you fail to understand this then I’m sure you find some like minded folks you’d get along with in North Korea or Cuba. Send me a postcard.



[edit on 25-4-2006 by El Tiante]

[edit on 25-4-2006 by El Tiante]

Sooner or later our economy is going to no longer be able to afford the high gas prices, so what's holding back any gasoline manufacturer trying to make a new fuel source? The first company to do this will make big $$$ on an alternative because everyone will want to drive again. Not only that, but they would be praised by enviromentalists for making an effort to do some good for the world's atmosphere.

I do not think it is necessary to label people Marxist simply because they do not agree with you. Assuming other members do not understand economics is a bit rude.

Based on your posts, one could assume that you voted for George Bush, possibly support the war in Iraq, probably own guns, and likely consider yourself a patriot.

All or none of these statements may be true. Some may be true while others are not. Do you see how silly it is to assume things about other people?

Instead of being rude to other members, I think we would be more eager to listen to your arguments if you confined yourself to the subject and used adult analogies. "Speaking" to us as though we are ignorant children only weakens your credibility despite the fact that what you say is logical.

No one likes to be spoken down to including you. Mutual respect goes a long way.

God, do I have to explain everything.

The ME can pull oil out of the ground for about $4 a barrel. That’s absurdly inexpensive and provides a sustainable competitive advantage over alternatives. If it cost me $40 (or more) to make the equivalent energy of barrel of oil, then I have no hope of competing against ME oil. As long as ME oil can be had so cheaply, alternatives will fail in the marketplace. OPEC has such a huge margin it will be nearly impossible to develop alternatives that can compete.

Current high oil prices are not only a product of normal market forces. IRAN and other world instability are externalities that threaten supply and put upward pressure on prices

[edit on 25-4-2006 by El Tiante]

I would like to add to this discussion that if the US government had not interfered with the development of alternative fuels (read greed) and if car manufacturers had not had tunnel-vision (read greed), we might be far beyond this crisis now.

Car makers aren’t the problem, car buyers are.

Companies exist to return maximum profit to shareholders. Automakers accomplish this goal by building cars that car buyers want. While fuel prices were low, people wisely chose safety over MPG and transported themselves and their loved ones in vehicles that offered the greatest safety (even though that safety margin is largely one of perception.)

Increase fuel cost has raised the price of this (again largely perceived) safety margin, so consumers will buy less of it. That is, they will buy more fuel efficient cars and as a result automakers will increase their offerings of fuel efficient models.

Unfortunately, the lead time for new models is measured in years.

As a point of pride, the great and powerful El Tiante had seen this situation coming for some time and wisely chose fuel efficient vehicles for his fleet (Honda Civic Si, Honda S2000, Honda CBR 600)

El Tiante, are you connected with either the government or big business in some way?

Not really.

I work in IT (BA CS & Math) for the world's largest defense contractor (in a non defense capacity). Economics is sort a hobby of mine.

[edit on 25-4-2006 by El Tiante]

According to MSNBC "Bush's plan will do little to ease pain at the pump."



Cost of manufacturing and the summer driving season are also given as reasons for the increase in prices.

First of all it took 32 percent in the polls for Bush to get to the public with hollow promises of a solution to gas prices.

But remember people you do not bite the hand that feeds you.

He wants more tax brakes to oil companies and more allowance of land for them to keep drilling.

This companies while reaping profits records Do not help with put money back for incentives .

Because nobody tells them they have too.

In 5 years all Bush has done is line up the pockets of his friends in the oil industry rather than monitoring their business practices.

Bush has been adamant to put in place a way to stop price gouging from these multibillion dollar corporations and to use the Strategic Petroleum Reserve to help the littler people in America.

This what Bush has done for the oil industry.



So while the government gives incentives and tax payer money to oil industries, they are not obligated to give us the consumer a darn thing this oil corporations are robbing us the consumer blind.

www.iht.com...



[edit on 25-4-2006 by marg6043]

That premiss might be true if the UK didn't have WORKING Carburators being used right as we type that gave 50 to 70 MPG. It's the Gasoline Companies buying up patents and dictating to the US, thus Controling the Rate of ripping us off.

Let's see... China and India, with populations in excess of 3 billion people, are becoming economic powerhouses. The Indians and the Chinese want the same standard of living we Yanks and Canucks have (cars, telecommunications, cell phones) and are eating up vast amounts of resources (commodities like oil, copper, silver). Oil hasn't even begun to spike yet. So if you don't have a car, don't buy one - stupidist investment you could ever make. Get a horse.

David Icke says, "It's the reptilians, stupid!"

-S

gas is 2.91 where I am......I shouldnt complain though, I drive a fullsize Dodge crewcab 1500.

Look! Another person that doesn't understand economics. You doom sayers have ALWAYS been worng. You are applying static analysis and such analysis when applied to markets is ALWAYS wrong.

Consider:


As prices for a given rise commodity (and those prices increases are sustained) consumers buy less and seek alternatives. For example oil shale and Alberta tar sans make a lot of sense at a sustained price north of $50 a bbl. Oil that was uneconomical to extract prior to a price increase now becomes economical, pressure increases to drill more. Hell, at > $70 a bbl you can make money turning turkey guts into fuel.

The market will reach an equilibrium once the mess with Iran sorts out.

No it won't because is not about Iran or the 'n-word' valley my friend,this is about setting the new standards for gas prices in the country through controlling availability and demand.

Now the oil companies got another score and they will get their wish on getting lower environmental standards so they can get . . .yet another brake.

Knowing that our country is the third largest producer of crude in the world make you wonder also as why we depend so heavily on foreign oil.

I hate to break it to you El Tiante, but commodities like oil, gas, industrial and precious metals are finite resources. I agree that as commodity prices rise industry considers alternatives. However, with China's economy growing 10% per annum, and India not far behind, all industiral commodities are gonna be squeezed. Consider silver - after depleting over 5,000 years worth of silver inventories in the last century, the world's stock of unmined silver (in the COMEX, Govs, and Banks) stands at a mere 500 million ounces - that's about 85% of what's mined every year (about 600 million ounces). Industry uses about 800 million oz a year which creates a 200 m oz deficit per year. Industry's only ten years (or less) away from a brick wall in silver.

Please consider that world gold stock is around 5 billion oz - at $630.00 a pop. Silver's at 500 million oz - at $12.65 an oz. "Every day we have less stockpile on earth and less reserves in the ground" (Ted Butler - Butler Research). Same goes for oil.

Oh, and I'm not a doomsayer. I plan to make lots of money on this commodity bull market. But I am weary of anyone who claims we don't (and won't) have commodity supply issues with a world population nearing the 7 billion mark. Never mind that they're all priced in fiat paper "play" currency backed by the wind...

Get real.

-S

wow Stu thats crazy money. Its about 3.25-3.60 (premium) here in New York City area. I think in your case a lot has to do with the Brent crude that comes from up your way, not refining out as well as other crude oils. Usually in the refining process a certain amount of the barrel is lost to refinement. Brent crude loses a little more then oil from the middle east or the US I'm pretty sure.


Pie

Well, Gas Prices soard to $1.44 a litre today, where I am in Australia
Seriously I don't know how much longer this can go on, without something hitting the fan.
I'm just wondering how long it is before I get robbed for a tank of gas