Is it time to boycott OPEC yet?

What will it take for prices to go back down, Should we boycott? From now on I will buy nothing from the gas station but gas. Soon as they no longer make money maybe they in turn will refuse to buy the gas. Sure for some time things might be hard but soon OPEC will cave! BEGIN THE BOYCOTT NOW!!! FART ON OPEC!

Read:

U.S. Gas Prices Hit New Record High

Mar 28, 8:07 PM (ET)

By TIM MOLLOY

LOS ANGELES (AP) - Gasoline prices across the country climbed another 3 cents in the past two weeks to a record-high average of $1.80 per gallon for all grades, according to a study released Sunday.

There is little chance of prices falling significantly in the near future, because increased demand will likely result from an improving economy, Memorial Day travel, and even the extra hour of light from daylight savings time, said Trilby Lundberg of the Lundberg Survey of 8,000 stations nationwide.

"The demand push this time of year is adding to supply tightness and therefore price," Lundberg said. "I don't see any recipe for substantial gasoline price cuts anytime soon."

Friday's average price surpassed the record of $1.77 set in the last Lundberg Survey, conducted March 12. But when adjusted for inflation, pump prices remain well below levels reached in the early 1980s.

Even if the Organization of Petroleum Exporting Countries decides at its meeting Wednesday to cancel plans to reduce oil production April 1, growing demand makes it unlikely prices will fall much, Lundberg said. Worldwide demand for crude oil is increasing along with U.S. demand for gasoline, she said.

Gasoline prices are up 29 cents per gallon nationwide since late December, Lundberg said. The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.77 per gallon for regular, $1.87 for midgrade, and $1.96 for premium.

Gasoline prices usually rise between March and May as refiners temporarily shut down their plants to prepare for the peak summer driving season, when special clean-burning blends of fuel are required.

Adjusted for inflation, the current price fell short of the record set in March 1981, when a gallon of gas cost the equivalent of $2.85 in today's dollars, Lundberg said.

I have started to walk wherever I can. A few months ago, it cost me about $14.00 to fill my tank. Yesterday, it cost me $22.00.

That really hurts, because I live on a tight budget

Other than that, what can we do?

Ironicly the problems isn't OPEC price conrolling nearly as much as it is American's being so damn dependant on oil.

In most countries gas and oil cost WAY more than it does in the states even at the now "high" prices.

Also, boycotting OPEC does nothing to solve the problem. If the US as a whole stopped buying OPEC oil prices would sky rocket making your "high" $1.80 a gallon gas more like $10 a gallon. On top of that bootleg gasoline would become huge business fueling organized crime to the point of over whelming law enforcement.

Boycotting is for when there are alternatives. If you boycot beef there is always pork, If you boycot Nike product other people make shoes and clothes.

But since the amount of oil availible world wide is limited boycoting OPEC would mean less availible oil and drastic price increases.

If you want to pay 10 times as much for gas and everything transported in vehicles (ie EVERYTHING) then by all means do so. I on the other hand will shell out a little more at the pump and hope this is a wake up call that oil controls our lives and we need other options.

Unless of course your goal is to raise prices with a boycot and stir american ire to the point of US citizens supporting a military take over of the entire middle east and WW3. If thats the case, a boycot is a great idea. I'd rather just have energy options though.

Originally posted by Quest
But since the amount of oil availible world wide is limited boycoting OPEC would mean less availible oil and drastic price increases.

I need you to explain the logic you used behind this point. I always thought that if everyone boycotted oil, there would be less demand aka a surplus. OPEC would bring the oil prices back down to equilibrium.

I kind of get what youre saying, OPEC would have to raise prices in order to compensate for the lost market. However, this is flawed economic policy and you don't need to be Keynes to see it.

AceOfBase,

Ok, so I'm not mad! I thought I did too but after doing a search there is no sign that I had. Apart from that I'm serious! All I will buy from now on is GAS nothing else!!!!

Originally posted by insite
I need you to explain the logic you used behind this point.

Its simple econ actualy, here are the logic steps.

OPEC produces a large portion of the oil used in the US.
The US stops buying OPEC oil. Other suppliers can't provide that much more oil.
Now there is less oil in the US.
Americans still need to get to work, ship thier food, and manufacture goods.
So DEMAND stays the same.
SUPPLY has dropped.
PRICE will raise as Americans start to out buy eachother to get the limited amount of oil.

Now, there is the option that you not only mean to boycot OPEC but also use less oil and lower demand as well as supply. If this is the case, i hope you don't like driving, plastic, natural gas, food, or anything you buy from stores. All of these things need gas/oil.

Boycotting OPEC is easy, living w/o oil is not. Boycotting will not change the demand for oil. It will just mean what oil we do get will cost a FORTUNE.

[Edited on 5-4-2004 by Quest]

If I could just have a hemp bio-diesel plantation and refinery I would be loving life.

Quest,

So you don't believe that boycotting OPEC would force them to lower their prices? I see exactly what you are saying, but I was specifically talking about OPEC. In the interrum short run oil prices would be high you are exactly right. However, living with high crude prices for a long period of time is a lot worse than it is for the short period of time we would expect OPEC to respond in.

The only way to deal with cartels is to starve them into submission.

I have a historical question:

How did the US break the gridlock on the oil embargo in the 70's?

*EDIT: After researching I guess the US didn't have much to do with anything. OPEC lifted the embargo itself in 1974 for no reason I could find. They must have been financially troubled.

[Edited on 4-5-2004 by insite]

Originally posted by insite
I have a historical question:

How did the US break the gridlock on the oil embargo in the 70's?

*EDIT: After researching I guess the US didn't have much to do with anything. OPEC lifted the embargo itself in 1974 for no reason I could find. They must have been financially troubled.

[Edited on 4-5-2004 by insite]

The US created the Alskan pipeline, and fearing the US wouldn't buy ANY oil OPEC lifted the embargo to regain our business.

However, even with the pipeline the US can't do the same now since our oil usage is greater now. OPEC holds all the card short of military invasions.

I don't think so. If the US were to boycott and worldwide OPEC prices would increase, what's to stop others from boycotting also. I firmly believe that OPEC would prefer to lower its prices to get back a huge market share than to raise it's prices to make up for the lost market.

*EDIT: This is all hypothetical of course. I'm not saying the US will or even should boycott. Quest made a pretty good point and I saw the light.

[Edited on 4-5-2004 by insite]

OPEC may even be pushing the price to find the marginal profit.

They could keep bumping prices til they see people actualy stop buying oil. And based on American usage, its going to go higher. Remeber, as low income buyers can no longer afford gas and such, the big buyers are just paying more and OPEC makes MORE money off less buyers.

The fact that the cost of a car is the main factor in driving means that theoretically there should be people who just can't afford the gas regardless of the car before they are maximizing profits. This means people who have cars but still take the bus because they just can't afford to fill the tank. While there are cheap people who do this (cheap isn't a bad word in this case) there aren't people who are FORCED to do this.

If OPEC knows what it is doing, gas prices are going to keep going up.

But it won't reach critical points til they try to survive the oil peaks in a decade or two.

The oil peak won't be crazy price inflation, but rather a platue where prices go up and down a lot as OPEC tries to balance conserving what oil is left and still making money.

Its time tested that boycots only work if the seller needs the business more than the buyer needs the product.

In this case, OPEC would sufer a good bit of losses, but the US economy would basicly collapse.

As I said, OPEC has the power in this case.