[OT] Gas Prices

[Guest Sloth]

Supply and demand determine the price of everything. In June of 2007, we were paying roughly 75 cents less per gallon than we are today. The supply is the same, but demand has officially been declared down. Since demand is lower, why have gas prices gone up in the last year?

[bob_sauve28]

Supply and demand determine the price of everything. In June of 2007, we were paying roughly 75 cents less per gallon than we are today. The supply is the same, but demand has officially been declared down. Since demand is lower, why have gas prices gone up in the last year?

Demand isn't lower

[rbochan]

Supply and demand determine the price of everything. In June of 2007, we were paying roughly 75 cents less per gallon than we are today. The supply is the same, but demand has officially been declared down. Since demand is lower, why have gas prices gone up in the last year?

Because the energy companies want to continue the trend of making $7000 PROFIT per minute. Even the oil execs admit that we're being screwed.

 

http://www.bloomberg.com/apps/news?pid=206...mp;refer=energy

 

"U.S. oil company executives told Congress oil prices should be between $35 a barrel and $90 a barrel, as they testified for the second time this year about record energy prices.

 

The price of oil should be "somewhere between $35 and $65 a barrel,'' John Hofmeister, president of Shell Oil Co., the Houston-based subsidiary of Royal Dutch Shell Plc, said at a Senate hearing today. Other executives said prices should be as much as $90 a barrel."

 

 

[Bmwolf21]

Demand isn't lower

It is in the US.

[Goodfella25]

The reason:

 

ARTIFICIAL SCARCITY. There are a lot of people making a lot of money on the backs of hard-working Americans. Thats my opinion based on what I consider to be true.

[Bmwolf21]

The reason:

 

ARTIFICIAL SCARCITY. There are a lot of people making a lot of money on the backs of hard-working Americans. Thats my opinion based on what I consider to be true.

The refining capacity is the thing that gets me. Sure, there are a lot of NIMBYs and envirowhackos that don't want new refineries built in their backyard (who would, really?) but there is also evidence of the oil companies purposely closing refineries and limiting capacities to push up the price in the past, so I have no doubt it's happening now.

[RayFinkle]

Supply and demand determine the price of everything. In June of 2007, we were paying roughly 75 cents less per gallon than we are today. The supply is the same, but demand has officially been declared down. Since demand is lower, why have gas prices gone up in the last year?

The biggest problem is the dollar being in the tank because or economy is in the shitter, and yes supply is down in the US.

[frisky]

They're also claiming that refineries have shut-down to change over to the summer blend and that there haven't been any new refineries built in decades or seomthing. Every time I look that the prices it looks like they've jumped another 10 cents. Diesel around here is up to 5.17/gallon. Regular is at 4.35/gal. I was pissin and moanin when we passed 3/gal. I'd consider public transportation if it literally wouldn't take 3-4 hours to get to where I have to go. That's one thing I miss about the subway and living in the city. It went everywhere you wanted to go. Didn't have to drive a car for 3 months solid. Anybody else seriously starting to feel the pinch of high gas prices in their family budgets?

[Strow]

demand is down in the US but is VERY high in China and India, also the fact that the dollar stinks right now pushed it from 100 dollar to 122 what it is at today. Also the refinery questions is a sticking point for Mr. Bush and I don't know why so many people are against building more. They have already changed over from winter heating oil to gas oil so thats not a problem anymore. Another issue is the middle east, no reason to get started on that. Finally another reason is people just wanna make money and they know everyone needs oil, shot if had had money a year ago I would have gotten oil and just sat on it. The fact that congress questions the oil CEOs is a joke it does nothing. I think Mr. Bush just wants a little more money before he leaves office. I for one am starting to really get hit on the gas price and my company has floated the idea of people working from home a few days a week.

[spndnchz]

Oil futures prices have much to do with it. Also the money that can be made in that market. Foreign and domestic companies have for years and still do keep a stockpile of cash sitting around. But in these last years, interest rates have come down and with it the US Treasury rates. Companies needing and wanting to make a buck on their cash look for something other than these treasuries now because the treasuries pay next to nothing. Oil it is.

Why not put some of your money in oil futures, gaining much more than the paltry 3% a treasury will pay you, thus artificially showing increased demand, supply being the same or less, continuing to drive up the price. I too would expect oil to be between 70-90 a barrel by this time next year. Along with companies saying 'well, we lost some money with the decrease in oil prices' the same way they bet on mortgages and got burned. But I'm just a dumb blonde.

[inkman]

I'm stocking up on guns, canned food and toilet paper.

[spndnchz]

I'm stocking up on guns, canned food and toilet paper.

don't forget gas masks, sunscreen and ammo.

 

And to settle the supply-demand issue:

In its weekly inventory report, the department's Energy Information Administration said demand for gasoline fell by 1.4 percent over the last four weeks. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected. -Business Week

 

About refining:

Refining margins are slim because oil prices have nearly doubled over the past year, while gas prices have risen only 27 percent. One of the reasons the oil execs think they are getting screwed.

 

Countries like India and Malaysia are trimming back their subsidies so you would think demand would go down there also.

[Guest Sloth]

On CSPAN, a politician, who seems to actually be serving the people who voted for him, mentioned areas in our country where hundreds of billions of barrels of oil could be produced. I just don't understand why our government hasn't attempted to take advantage of this. In some areas of the U.S., our government is having oil refined, but they're simply stocking it up, not allowing it to be sold. One of those refineries is off the coast of NJ! Other than refineries in Alaska, our country should not be stocking up oil for "what if" cases. Our country also needs to build more refineries. That was another point the politician made. We have places in our country where oil exist and not one refinery is set up. Why? If we actually went after the oil by building more refineries, the supply factor would no longer be a problem and prices would drop. This is a problem that has to be addressed ASAP. Ford closed 4, possibly 5, factories this past week. A major airline is going to collapse w/ in a year, according to CNN. Thousands of people have lost their jobs and it will continue. Every part of society has been affected....most of the time in a bad way.

[Strow]

Releasing the governement surplus I have read won't help the problem. It is interesting how the companies are investing in oil instead of bonds makes it seems like the demand is high. This is high risk high reward and will crash much like the lending crisis. spndnchz has some very valid points. After I posted I checked the net some more and a few asian contries are upping the gas tax to try and curd the increase but I believe it will not help because of the influx of oversea jobs from the US. Worse case this summer another huricane hits Texas or even forms in the Gulf causing another spike. Speaking of Spikes I see the price jumps 4 dollars today because of the weak US dollar and the Euro Union increasing interests rates great. Im with Ink lets get guns, food, and booze.

[spndnchz]

Just seemed like a good time for this:

 

Thanks to Warren Zevon, RIP

 

Well, I went home with the waitress

The way I always do

How was I to know

She was with the Russians, too

 

I was gambling in Havana

I took a little risk

 

Send lawyers, guns and money

Dad, get me out of this

 

I'm the innocent bystander

Somehow I got stuck

 

Between the rock and the hard place

 

And I'm down on my luck

 

Now I'm hiding in Honduras

I'm a desperate man

 

Send lawyers, guns and money

The #%^$#! has hit the fan

[Bmwolf21]

No new refineries since 1976 (I believe that was the last one built in the US.)

 

BTW, decent article in the NY Post about the untapped oil in Montana, and how Montana's governor wants to get the ball rolling ASAP on drilling and extracting the oil. And as a bonus, the people of Sydney, Montana actually want a refinery built there. (I think this was posted over on TSW but couldn't find the thread, so I Googled the article.) Maybe a small, faint glimmer of hope?

 

LINK

[Strow]

Montana is news to me sounds like a plan and not many people to piss off. Lets get drillin'

[Guest Sloth]

No new refineries since 1976 (I believe that was the last one built in the US.)

 

BTW, decent article in the NY Post about the untapped oil in Montana, and how Montana's governor wants to get the ball rolling ASAP on drilling and extracting the oil. And as a bonus, the people of Sydney, Montana actually want a refinery built there. (I think this was posted over on TSW but couldn't find the thread, so I Googled the article.) Maybe a small, faint glimmer of hope?

 

LINK

 

Do our politicians have any type of common sense? I'm not sure how much oil is in Montana, but maybe Montana's governor will get the ball rolling. If a significant state were to jump in, I think a number of states would follow suit.

It's terrible the U.S. hasn't built a refinery since 1976. They should look at that as a, not the only, reason why our country is in the trouble it is. I may be going overboard on this, but if oil prices continue to cause workers to be laid off, companies to shutdown, families unable to afford basic needs, etc..., would it be dumb to think our country may be on its way to another depression?

[inkman]

Do our politicians have any type of common sense?

No but they have plenty of common cents.

[Strow]

another depression is a little much right now but the high people have said the words stagflation which in my mind is just as bad where the price of everything goes up and no one buys anything.

[NJ_Blue_and_Gold]

Montana is news to me sounds like a plan and not many people to piss off. Lets get drillin'

 

A couple posters referred to this oil and gas formation, called the Bakken Formation. Geologists might call it the Williston Basin, which about 370 million years ago was a shallow sea. Recently, the US Geological Service upped the estimated oil and gas reserves for the area to 3.7 billion barrels of oil and 1.85 trillion cubic feet of gas. Unfortunately, the complexity of the formation makes finding and extracting the oil and gas difficult and expensive. So its probably more hype than reality unless drilling and production technologies improve.

 

The other thing I'd recommend people take a look at is Peak Oil theory. It correctly predicted in 1956 that US oil production would peak between 1966 and 19971. It peaked in 1970 and has been declining since. Its use has been expanded to cover world production.

 

In short what it says is the world is not running out of oil. What is running low is the ability to produce above the level of demand. Per this view world production peaked in February 2006 at 84.7 million barrels per day. This along with the falling dollar, growth in emerging markets like China and India, and political and social tensions, (plus production drops in Mexico, Venezuela, Norway, etc.) have caused prices to rise. Some blame speculation and that's part of it for sure but there's always been speculation in every market.

[Guest Sloth]

No but they have plenty of common cents.

 

LMAO! That caught me off guard. I wish I had a lot of common cents.

[Hawerchuk]

Supply and demand determine the price of everything. In June of 2007, we were paying roughly 75 cents less per gallon than we are today. The supply is the same, but demand has officially been declared down. Since demand is lower, why have gas prices gone up in the last year?

 

The US has to pay for that stupid war in Iraq somehow!! So, now were payin'.... BIG TIME!!

 

what a F&%King waste!

[Bmwolf21]

A couple posters referred to this oil and gas formation, called the Bakken Formation. Geologists might call it the Williston Basin, which about 370 million years ago was a shallow sea. Recently, the US Geological Service upped the estimated oil and gas reserves for the area to 3.7 billion barrels of oil and 1.85 trillion cubic feet of gas. Unfortunately, the complexity of the formation makes finding and extracting the oil and gas difficult and expensive. So its probably more hype than reality unless drilling and production technologies improve.

 

The other thing I'd recommend people take a look at is Peak Oil theory. It correctly predicted in 1956 that US oil production would peak between 1966 and 19971. It peaked in 1970 and has been declining since. Its use has been expanded to cover world production.

 

In short what it says is the world is not running out of oil. What is running low is the ability to produce above the level of demand. Per this view world production peaked in February 2006 at 84.7 million barrels per day. This along with the falling dollar, growth in emerging markets like China and India, and political and social tensions, (plus production drops in Mexico, Venezuela, Norway, etc.) have caused prices to rise. Some blame speculation and that's part of it for sure but there's always been speculation in every market.

Just to clarify - from the NY Post article I linked, the Montana governor said the latest estimate he got from the USGS was 4.3 billion barrels and he believes there is more:

 

While on a visit to Wyoming and Montana, I popped in on Schweitzer, the Democratic governor, who was more than happy to answer my questions about the rumors of huge oil deposits in the so-called Bakken area of his state.

 

Right now, the US Geological Service estimates that there are 4.3 billion barrels of recoverable oil in the Bakken region, which also reaches into North Dakota.

 

"They are always conservative," said Schweitzer, who greeted me in his office dressed in jeans, a white shirt and a string tie. "There will be more. It'll probably be more like 40 billion."

[Guest Sloth]

The US has to pay for that stupid war in Iraq somehow!! So, now were payin'.... BIG TIME!!

 

what a F&%King waste!

 

I'm talking too much today. I agree w/ you 100 #%^$#!ing%! I hope Obama wins the election and he begins, if not completes, the return of our troops, who I am HIGHLY proud of. I respect and honor every soldier, whether they're an officer or an enlistee. Politicians make the choices and the media is FAR TOO involved w/ our military. Just let the military do whatever job they have to do and don't act as if you have a back stage pass. :angry: