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Return to $1 gas?

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posted on Dec, 7 2008 @ 12:04 AM
reply to post by RFBurns

You cant have it both ways! The reason why we see so many layoff's right now is because of the effect on the economy of high prices and low purchases that occured over the last several months, up to and including into this month.

No, the reason that there are so many layoffs is the lack of credit availability to companies. When companies cannot get funds from banks to replenish their inventories, or pay their employees, they have no alternative but to lay off their people, or even shut down.
Here is a perfect example of what I am talking about:

This is being discussed on an ATS thread right now:'

Protest organizers said the company can't pay employees because its creditor, Charlotte, N.C.-based Bank of America, won't let them. Crain's Chicago Business reported that Republic Windows' monthly sales had fallen to $2.9 million from $4 million during the past month. In a memo to the union, obtained by the business journal, Republic CEO Rich Gillman said the company had "no choice but to shut our doors."

Bank of America received $25 billion from the government's financial bailout package.

"Across cultures, religions, union and nonunion, we all say this bailout was a shame," said Richard Berg, president of Teamsters Local 743. "If this bailout should go to anything, it should go to the workers of this country."

Outside the plant, protesters wore stickers and carried signs that said, "You got bailed out, we got sold out."

posted on Dec, 7 2008 @ 12:16 AM

Originally posted by RFBurns
So right now, I mean RIGHT NOW, is the time to SPEND!! Start traveling, start bying those gifts, start stocking up, start saving reserves of fuel. Help re-start the economy by taking advantage of the lower prices.

What are your thoughts on the effects of the combination of the yuan devaluation and Friday's Outright Agency Coupon Purchase by the Fed?

If you've been following the greater macroeconomic issues, including these two monumental issues, you would not be advising anyone to spend.

posted on Dec, 8 2008 @ 06:25 AM
Quote from ProfEmeritus

"Actually, your conclusion is not true. The fact is that oil prices are declining because demand is down significantly. It is a consequence of the Law of Supply and Demand"

Where do you live?? there are just as many cars on the road as when gas was 4+ a gallon, I understand the Law of supply and demand but that does not seem to be taking hold here. Gasoline prices should not be where they are right now, especially when you factor in the devaluation of the dollar due to the increase in the money supply via "Bailout Fever".
One of 2 things are happening gas prices are being artificially lowered or gas prices never should have been that high in the first place, hence criminal activity at the highest levels. (probably for justification of enacting the carbon tax, or life tax)

edit added from quote

[edit on 8-12-2008 by Sailor1]

posted on Dec, 8 2008 @ 04:47 PM
I want to know when the US gov't is going to wise up to OPEC and its shady practices.

Try and tell me the countries of OPEC (most of which hate us, except the saudi's which are just nice to our faces) didn't see an opportunity to strike the US with some economic terrorism when the housing/ credit crisis hit. What a better time to jack up oil prices, further degrade the dollar and the american economy?

Also, name any other business/ commodity in the world that gets to name its own price. "$100 a barrel is fair" says OPEC. Where else is this happening? The diamond exchange is the only other place I can think of. How about you OPEC faggots allow the market to do the money talking.

posted on Dec, 8 2008 @ 07:01 PM
Once the USD continues to weaken as a result of government quantitative easing, you will see Oil rocket back up to $80+/barrel.... Just wait...

posted on Dec, 8 2008 @ 07:08 PM
its 1.50 at some stations in Salt Lake City................

Right before the 2002 Olympics gas WAS under a dollar around here and could be found for 87 cents a gallon............

I don't really GET WHY some people are thinking the price of gas dropping is some TERRIBLE UNHEARD OF EVENT........??.........get real, 2001 was only 7 years ago and it was under a dollar then.

posted on Dec, 9 2008 @ 12:29 AM
reply to post by Sailor1

Where do you live?? there are just as many cars on the road as when gas was 4+ a gallon, I understand the Law of supply and demand but that does not seem to be taking hold here.

You don't understand supply and demand as far as gas is concerned.
The number of cars on the road means nothing in relation to supply and demand. The FACT is that the number of miles driven, which IS the measure of demand, is down significantly:

WASHINGTON, Aug 13 (Reuters) - Americans drove 12.2 billion miles less in June from a year ago as high gasoline prices cut the number of highway miles traveled during the month by 4.7 percent, the U.S. Transportation Department said Wednesday.

It was the eight month in a row that driving declined, as Americans have changed their travel habits, switched to more fuel-efficient cars and used public transportation.

Since last November, U.S. motorists have driven 53.2 billion fewer miles than they did over the same period a year earlier, topping the 1970s total drop in U.S. miles traveled of 49.3 billion miles that was caused by several recessions and spikes in gasoline prices during the decade.

The decline in miles traveled since last November has occurred the most in rural areas, where travel has fallen by 4 percent, compared to the 1.2 percent drop in urban miles traveled, the department detailed.

High fuel costs have the biggest effect on individuals in rural areas, who normally drive more and spend a larger share of their income on gasoline.

Now let's look at this quote of yours:

Gasoline prices should not be where they are right now, especially when you factor in the devaluation of the dollar due to the increase in the money supply via "Bailout Fever".

Actually, gasoline prices are LOWER compared to oil's drop from a high of about $145 to about $45 a barrel today. You have to look at the WHOLESALE price of gas, which EXCLUDES all of those taxes, which you don't see broken down at the pump, in most states. Here are the facts:

Oil Is Cheap. Why Is Gas, Which Is Made From Oil, Even Cheaper?
By Catherine Rampell

Crude oil futures recently fell to about $50 a barrel, the cheapest they have been since May 2005. How does this relate to gasoline prices?

There is a relationship between crude oil prices and gasoline prices, since oil is used to make gasoline. But there is not a simple, linear, one-to-one relationship. In the futures markets, a gallon of gasoline has been, on average over the last six years, 22 cents more expensive than a gallon of crude, according to John C. Felmy, chief economist for API, an oil and gas trade association. (A barrel of oil contains 42 gallons, by the way.) That 22-cent difference comes primarily from the costs of refining oil into gasoline.

Right now, though, the decline in gas prices is outpacing that in oil prices on the futures markets. In fact, a gallon of gas is currently cheaper than a gallon of oil on the futures markets in the New York Mercantile Exchange. Why is this?

While one product may be used to make the other, they have different supply and demand issues. In much of the recent past, oil prices drove gas prices. Fears about a supply shortfall, plus strong demand for petroleum products like diesel, pushed up the cost of oil, which meant companies that refine oil into gasoline had to pay more for raw materials. At the same time, though, demand for gas was slowing, which meant refiners were unable to pass on all of their costs. The run-up in gas prices therefore lagged slightly behind the run-up in oil. The price of oil futures peaked on July 3, and the price of gasoline futures peaked a week later.

Then recession hit. The financial system began to fall apart, and along with it investors sold off commodity futures (like crude oil). Consumers also tightened their belts and stopped buying as much gas, even during summer, the peak driving season.

Demand for gas cratered. Since then, gas prices — both at the pump and in the wholesale futures market — have plummeted.

One must remember, though, that products other than gasoline are made from crude oil. Of every barrel of crude oil, only about 40 percent goes to make gasoline, according to Ben Brockwell, director for data pricing and information services at OPIS, a company that tracks petroleum pricing and news. The rest goes toward production of other products, like diesel fuel. Diesel is used in much of the world for electrical power and industrial generation, although there isn’t a huge market for it in the United States.

Perhaps one reason oil futures prices are above gas futures prices is that diesel is feebly keeping oil afloat. Demand for diesel is falling, but it has not fallen nearly as much as gas. Gas futures prices have fallen 70 percent from their peak; diesel futures have fallen 58 percent. Oil futures have fallen 66 percent.

There is also a perpetual fear that some international incident — whether a conflict or a cartel-imposed quota — might disrupt the oil supply. It’s also easier to store crude oil than it is to store gasoline, which has more vaporization issues, Mr. Brockwell says. This means that if there isn’t much demand for petroleum products now, but you expect there to be a shortage in the future, it may make sense to hold onto (and buy more) crude, but the same wouldn’t be true for gasoline. On a related note, the price of oil several years down the road is much higher than the spot price, which means refiners have a strong incentive to stock up on oil now.

A brief addendum on retail gas prices: You’re probably wondering how all this relates to the prices you see at the pump. On average over the last six years, a gallon of gas on the retail market has been about 99 cents higher than a gallon of oil on the futures market, according to Mr. Felmy. (Those 99 cents come from the costs of refining, distribution, marketing and taxes. For a detailed breakdown, click here.) Unlike wholesale gasoline futures, today retail gas is still more expensive than oil futures, although the price difference is narrower than usual, presumably because of dwindling consumer demand. Right now, the average retail price nationwide is $1.929 a gallon for regular, according to AAA, the automotive group; a gallon of crude on the futures market is trading at $1.193 on the New York Mercantile Exchange.

By the way, as to this part of your quote:

Gasoline prices should not be where they are right now, especially when you factor in the devaluation of the dollar due to the increase in the money supply via "Bailout Fever".

Sorry, wrong again. The dollar has not devalued. In fact, the dollar is up against almost all world currencies. Furthermore, as to what you call bailout fever, you obviously don't understand that the major part of the money allocated in the bill has not been put into circulation yet, and thus, has no effect on the worth of the dollar. Allocated funds have no effect on the dollar until that money hits the real world.

You're 0 for 3.

[edit on 9-12-2008 by ProfEmeritus]

posted on Dec, 9 2008 @ 01:20 PM
Not to mention that the US isnt the only major country going through this economic recession. As I remember correctly (scientist, not accountant) europe, china and japan are also struggling. Since the dollar is up against those currencies, id venture a guess and saying we're still doing better than them, economically.

posted on Dec, 9 2008 @ 06:30 PM
I'd just like to add that if a company can't pay its employees because their creditor pulled the plug, it's the company's fault!!

I run my own business, and have expanded over the years, and I never borrowed for it. Sure, I could have and could have gotten bigger results, faster...but it wouldn't have been MY company until I paid off the debt.

There are times when debt is OK or necessary: to conduct clinical trials for a new drug, to buy a new office/production facility, etc....but any company that needs debt to make payroll doesn't deserve to be in operation. Too bad the workers get screwed for someone else's poor planning!

posted on Dec, 10 2008 @ 01:08 AM
Gas prices were artificially high. Congress was about to go after oil speculators who were blamed for driving up the price of oil. Big deal in the news just a couple of months ago.

So what is the real price of gas? Is it $0.50 (probably not), or $1.50 (current price), or $2.50 (round trip 100 mile commutes are a-ok), or $3.50 (your tax starts subsidizing those hybrids), or $4.50 (plug-in hybrids make it into regulations), or $5.50 (government demands electric cars), what is it?

If gas was artificially high, and it spawned a generation of tax-subsidized hybrids, was the wool pulled over our eyes and money take from our wallets for no true reason? If Hybrids need to be subsidized to make financial sense, and tax subsidies were created for artificial reasons, who robbed us? The KGB supported '60s peace movements, who is supporting the environmentalist movements? Who does that hidden hand belong to?

[edit on 10-12-2008 by Dbriefed]

posted on Dec, 11 2008 @ 01:06 PM
You can kiss the vision of filling up your 15-gallon gas tank and pay $15 for it good bye.

MOSCOW — Faced with falling oil prices, Russia is preparing to announce that it will work with the Organization of the Petroleum Exporting Countries to coordinate a reduction in output, the minister of energy said Wednesday.

Mr. Shmatko said that by Dec. 17, the date of the next scheduled OPEC meeting, Russia will announce a plan to reduce the country’s oil production, the Interfax news agency reported. The minister offered no details of how this would be done, or how much oil might be taken off the market. Mr. Shmatko said Russia would also seek to persuade other non-OPEC producers to reduce output. A spokeswoman for the ministry declined to elaborate.

The figures are not that important as the willigness to deal with the situation is. The depreciation of oil prices really called for some response. and that's what it takes to put the boys who got us to $140 per barrel back in action. Looking at the latest quotes, the oil boys are warming up . . .

If the Saudis turn their thumbs down on Dec. 17, it would take about a week for the gas prices to stop going down. In the following week, the gas prices will start to climb again. Oh, well . . .

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