Are Low Gas Prices Good..?

There has been great debate in the media about the benifits and detriments of low gas prices. On the whole, I don't trust the media so I'm gonna ask for the ATS populace to let me know.

Low priced gas. Good... Or Not?

Discuss.

To put it in small terms NO. Low fuel prices (very low) are a sign of the economy taking a dump on itself. What the general public doesn't understand is that so much industry is tied to the need of petroleum products derived from crude oil. It is a cascading effect when the prices fall, that shows the lack of production in the US industrial sector. Just think about supply and demand. The supply is high but the demand is low. We are not manufacturing as many products therefore we are not shipping as much. In otherwords NO the low fuel prices signify a rapidly dwindling economy.

Correct. And also consider the fact that if the prices stay high, and economy begins to plummet, people wont be able to afford to move around. With no one able to move around, our country will enter a stand-still. If that happens, economy is gone.

These (not all, but these) low prices are a direct indicator of our economy taking a dump.

Very true, thank you both! But could it also be the comapnies who made a killing in the price increases saving their own hide by dropping the price so the people don't revolt? I remember how bent I was when I saw how much big oil made with their $6 a gallon splurge.

What do you think?

Originally posted by Jkd Up
What do you think?

Lower gas prices are wonderful. Absolutely fantastic. And for those who think the prices are too low - I disagree. The price is around $2.00 a gallon. That's not too low. Not at all.

The lower the price the lower the demand. The lower the industrial demand the fewer products are being made (like that is many to begin with ). You end up in a deflationary spiral where all goods end up cheaper but more jobs are lost as profit margins shrink beyond the breaking point. Gas might be $.50 a gallon and that cool t.v. might be only $400 bucks but if you don't have a job to earn the money to buy the stuff it does not matter.

low gas prices means people are able to DO things. it is not good, it's awesome!

runaway inflation is bad.

People you must look deeper than face value of the fuel price. The true consequences of the lower fuel prices won't be felt for a couple of months yet. So those that say it is good are also saying that they still have their jobs for the moment and its buisness as usual. Well its not buisness as usual look at the numbers being published. People aren't using this lower price fuel to do anything.

the price of gas underwent hyperinflation, and has now returned to reasonable levels.
to stay at the hyper-inflated price would drive the economy to a standstill(as it was DOING). low gas prices will allow FARMERS, TRUCKERS, AIRLINES and other ESSENTIAL SERVICES to work at a PROFIT, instead of barely scraping by due to crushing fuel bills.

food prices were going through the roof. now, they can subside, and people can EAT and spend their budget on something besides food and gas.

Wow! Great comments. I have to agree that I love gas at $2 a gallon, but I dare say it won't stay there for long. Any thoughts on how long we will bask in the $2 a gallon range?

in my town gas is $1.60 which is crazy

i agree with previous posters that this just shows how fast the economy is tanking, though it is nice for people that travel to be able to pay less, it is just signs of things to come, a huge downward slide into hell

It is a damned crying shame that we're still paying more for gas than we should be and people are asking if it's too low priced? If gas had followed a natural price growth curve instead of being unnaturally driven up by the speculators and evironmental operatives, we'd be paying around $1.50 a gallon right now. Of course cheap gas is a good thing. The less companies have to pay for gas, the lower prices can go while they still make profits.

The low gas prices that we are seeing are not from lower demand, it is from the mass deleveraging of companies that are being forced to sell oil and other tangible assets through margin calls. Also, foreing investors are parking in bonds right now, driving up the dollar index even though they don't realize it's a huge dollar bubble that will be next to pop.

Low gas prices are good for importers though such as the US, but it's really just a mirage right now and will be short lived, when the massive increase of money supply gets spent into the economy price of gas will go through the roof.

the low price allows for many of those gas-guzzler SUVs to get tanked up,
so the ones that still have one parked secretly in the garage
have a family escape vehicle to excape from the urban and suburban riots to happen when many regional banks collapse in Obamas 1st term.



the low price, is deceiving... as inadequate refining is being used to produce home heating oil for this winter season.


So, anyone know if Diesel is following suit? in as much as Diesel is what keeps the trucks with goods & produce running over the highways/autobahns.


or is it a 'don't worry be happy' theme around here

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'DeadforDayz' --- good pointing out the linkages



[edit on 24-11-2008 by St Udio]

A couple of factors are driving this cost down. This is a complex problem and no easy fix.

Summer gasoline have higher priced oxidizers added to help combat pollution. An over supply of summer blend gasoline is now being dumped on the market just in time for a different winter blend. Demand is also down, so this is the classic supply and demand theory in action. Thus, lower the price even more.

It will work itself back up a little bit by January or February and then much higher next May.

Now for the question you should have asked and some have answered. It is about the price of oil which is different than the price of gasoline, but related.

The low cost of oil is bad. it looks great, but is really bad for everyone. You won't see it now, or even in a couple of months. There are several countries outside the middle east that have huge oil and gas revenue. They owe the international bankers and foreign banks tens to hundreds of billions of dollars.

Russia is the top of this heap. There is some concern if Russia can survive as a country once all the financial problems fully hit them. This will not happen for 6 to 12 months from now. Most of Western Europe has a huge banking crisis looming over this issue. America's banking system is in great shape compared to this problem.

To quickly solve this problem would to be driving the cost of oil back up. BUT, there is now a recession teetering on depression levels in some countries. The demand for oil will stay below historic levels of usage and prices will be stabilized by cutting production. Once again, a supply and demand theory in operation. This just produces the same income as there is not as much oil to sell as there is now, but it balances out.

Russia had loans and spending set in place for oil priced at $120 to $140 a barrel. You will not see these prices again for a couple of years. Once the recession is over, prices will start to climb as usage starts climbing. Now remember the cut back in production we are experiencing now and in the next couple of months, OPEC will not make the same mistake twice. Expect them to keep production levels low and prices very high.

Low gas prices are good when you are putting fuel in your car.
But they aren't good for the economy as a whole.
Medium prices would be preferable.
That's how they are supposed to be kept, but the moronic leaders engaging in Keynesian economics can never keep them that way.
Once they go sky high and come back down we get problems.
If you think of it like this.
If gas prices are lower so you could buy more gas with the money you have now.
When they are lower people wont have the amount of money they do now when they are high in order to buy as much of it.
So instead of saying no I cant go there because the gas price is to high I cant afford it.
You will be saying no I cant go there because I have no money to buy gas.

One thing that I can't help but wonder. Gasoline is a byproduct of kerosene. And deisel is a byproduct of gsoline. Why has deisel stayed up? I understand that because of it's use that it might be a bit higher, but the fact that it's a byproduct and remains well over (here at least) $3 more than gas. Not only that, but there has been next to no fluxuation in the price of deisel like there has been for gas.

Any input?

Originally posted by hinky
This is a complex problem and no easy fix.

Funny. Just a few short months ago we were all complaining that the problem was that gas prices were too high. Now it's a 'problem' that they are too low?



$2.00 a gallon isn't too low.

It's where it should have been all along - if the speculators hadn't done their evil work.