Gas Prices - Probably the REAL Reason

[JHZR2]

Originally Posted By: eljefino
This is America and you can own the mineral rights under your property and exploit them yourself if you so choose.


Oh really? Do tell.

The hoops to jump through make it impossible save for a select few or when the land is leased to someone with deeper pockets.

 

[hattaresguy]

Yep, that's why oil prices are fluctuating so much. The overall trend is up, but market forces will do it slower than the big traders will.

 

[d00df00d]

Originally Posted By: L_Sludger
I think - regardless of politics, those people with the most fuel efficient cars win. No gas price anxiety anymore.. at all.

True to a point. Those who insist on pointlessly inefficient cars still contribute to higher fuel prices for everyone.

However, what you're getting at is what I consider the best argument in favor of national-scale efforts toward energy efficiency: economic stability and freedom. It would make our markets less vulnerable to global price fluctuations, remove a good deal of the leverage that other oil-producing nations might have on us, and give us a lot more flexibility to play with domestic production and exports as we see fit. If we do it soon, we could also be in a prime position to export the relevant technologies and know-how to other countries in the coming decades as energy crises become more frequent and severe.

 

[spasm3]

Part of the problem is our weak dollar. Our dollar does not buy much overseas like it used to. This will be worse if the debt ceiling is raised at all.

 

[javacontour]

Originally Posted By: NHHEMI
I am not asking government to do anything other than reverse something they did over 20 years ago. What the heck are you talking about with property rights. Are you out of your mind?

Really, the government created the commodity trading of oil 20 years ago.

Please show your work and cite some supporting references.

 

[Trajan]

Gas prices are dropping. Go figure....

 

[djb]

Originally Posted By: Astro14
One of the big commodity traders in the oil futures markets is the airline industry. As an example, Southwest frequently loses money on selling tickets, but makes money hedging oil futures....


Southwest won big on their fuel hedge a few years ago. The bulk of their profits were attributable to that hedge.

Since then their hedging hasn't been exceptionally beneficial. Oil prices have bounced around a bit, within the range of "high" to "even higher".

Southwest is one of the companies that should legitimately be buying contracts. They sell tickets 9 months into the future, with prices based on today's costs.

 

[GearheadTool]

Originally Posted By: Trajan
Gas prices are dropping. Go figure....


I got Premium for $3.47 today in Dorchester. Pretty good, for those that think I am "Carnoobie."

Seriously, though, they are going down!

 

[PandaBear]

Once upon a time you have oil gushing out when you tap a well, now you need to hire geologist with ground penetrating radar and super computer to model where you will likely find oil. Then you drill 4 holes and find 1 with oil, that is too sour and thick you need to buy a special refinery to crack it to thinner oil, and you need to pump a lot of high pressure fluid into the ground to fracture the rock layers to get some extra out, or you need to move your well out in the ocean and drill 6000 fts deep.

The reality is, peak cheap oil is here and you now need to either explore new 3rd world nations (Russia, Nigeria, Mongolia, etc) that are unstable, move way out into the ocean, do a lot of tricks to the rock layers (fracking), or get very nasty (tar sand and heavy sour crude). All very expensive.

This doesn't help that the entire world's standard of living is getting higher especially in India and China, and they can start bidding for resources and we all end up paying more.

I'd not be surprised in the future we spend the same $ after inflation to commute the same distance, because oil price increase got offset by the efficiency increase.

 

[NHHEMI]

Originally Posted By: javacontour
Originally Posted By: NHHEMI
I am not asking government to do anything other than reverse something they did over 20 years ago. What the heck are you talking about with property rights. Are you out of your mind?

Really, the government created the commodity trading of oil 20 years ago.

Please show your work and cite some supporting references.

Government removed all restrictions( approx 1981 or so )which allowed crude and refined crude products to be added to the market eventually in approx 1983/1984. Look it up yourself.

 

[whip]

Originally Posted By: L_Sludger
I think - regardless of politics, those people with the most fuel efficient cars win. No gas price anxiety anymore.. at all.

People with efficient cars, never worry about gas prices? Ever?

 

[javacontour]

Originally Posted By: NHHEMI
Originally Posted By: javacontour
Originally Posted By: NHHEMI
I am not asking government to do anything other than reverse something they did over 20 years ago. What the heck are you talking about with property rights. Are you out of your mind?

Really, the government created the commodity trading of oil 20 years ago.

Please show your work and cite some supporting references.

Government removed all restrictions( approx 1981 or so )which allowed crude and refined crude products to be added to the market eventually in approx 1983/1984. Look it up yourself.

Let me see if I understand what you are saying. You make an assertion that the government created commodity trading in oil. I asked you to cite the specifics, and instead of supporting your statements, you want to shift the responsibility of defending your argument.

Sorry, it is responsibility to support and defend your assertions.

 

[NHHEMI]

Originally Posted By: javacontour
Originally Posted By: NHHEMI
Originally Posted By: javacontour
Originally Posted By: NHHEMI
I am not asking government to do anything other than reverse something they did over 20 years ago. What the heck are you talking about with property rights. Are you out of your mind?

Really, the government created the commodity trading of oil 20 years ago.

Please show your work and cite some supporting references.

Government removed all restrictions( approx 1981 or so )which allowed crude and refined crude products to be added to the market eventually in approx 1983/1984. Look it up yourself.

Let me see if I understand what you are saying. You make an assertion that the government created commodity trading in oil. I asked you to cite the specifics, and instead of supporting your statements, you want to shift the responsibility of defending your argument.

Sorry, it is responsibility to support and defend your assertions.


You are the one who seems to think it is untrue so if you are that curious do a search yourself. I am not doing it for you. I already know.

 

[itguy08]

Originally Posted By: whip
Originally Posted By: L_Sludger
I think - regardless of politics, those people with the most fuel efficient cars win. No gas price anxiety anymore.. at all.

People with efficient cars, never worry about gas prices? Ever?


Of course they will. If/when gas goes to $10 a gallon and they are paying $100 to fill their 10 gallon econobox it will be just as painful as the person that pays $100 to fill their SUV now.

If we use less, do you really think oil execs will settle for lower profits? Of course not, they will jack up prices to keep profits stable. We're strating to see this with utilities and conservaion. They are asking for (and getting) rae increases based on conservation cutting into profits. Conservation will give you lower bills in the short term but long term you will pay more.

And if you all think oil prices are a result of free markets you are delusional. There is no "shortage" of oil - read up on abiotic oil and see that much of it is naturally occuring. And when you have speculators buying tons of cheap oil, parking it on a barge offshore and selling when prices go high you will see the markets are manipulated for profits. A large portion of the price of oil is based on fear. The US gets most of its oil from itself and Canada yet every time there is turmoil in the Middle East our prices go up. That stuff barely affects us yet we pay for it.

Bring back local oil - us in the USA have enough. If we were smart, granted all drilling permits and requred 1/2-3/4 of the oil to stay in the USA at a reasonable price I think you would see oil and gas prices drop dramatically almost overnight.

 

[javacontour]

Who says we aren't smart. Getting oil from others at a lower cost while leaving ours in the ground until later?

The market may not be perfect, but it is harder to manipulate when there are players each trying maximize their benefit than if there was on pricing authority setting the price.

It has been demonstrated time after time that artificial manipulation is not sustainable. There are only so many tankers you can pack with crude and park away before others bring oil to market to take advantage of the higher prices,

Same with OPEC and their production targets. Too much temptation for members to cheat, making more and ultimately lowering the cost of oil. Either that or demand drops and price eventually follows.

 

[itguy08]

It's been said the USA has over 100 years of oil in the ground for our use, so using it would be a very good thing. With some planning and such we could ensure our energy independence.

I remember reading articles on how the speculators were storing oil in tankers to take advantage of the price fluctuations. And that's how they do it - buy it up, store it and release it when prices are high to get the money.

I think a coordinated effort to keep prices high is definitely attainable. You have all of the supply chain wanting high prices and that will keep them up. Especially since there is no incentive to lower them.

 

[Drew99GT]

Originally Posted By: mechtech2
It seems that high oil/gas prices are not so much from foreign countries, refiners, oil companies, or gas stations.
Sure, some, of course. But they do provide services/goods.

The real reason is that in about 1983 oil was allowed to be a COMMODITY that is traded. People making billions here [with no contribution], which WE pay for! It is way out of hand now.
I believe we are talking 1/2 the price or more.

This could be eliminated with a stroke of a pen - a law stopping the trade in oil futures.


That makes no sense what so ever because people make money on both sides of the market/either side of the trade.

Those evil traders trying to bid up oil over the last few months have been getting raped; the ones shorting are making the money.

Do you still blame the oil market and oil traders when they force the price down???

 

[Drew99GT]

Originally Posted By: GearheadTool
Originally Posted By: Trajan
Gas prices are dropping. Go figure....


I got Premium for $3.47 today in Dorchester. Pretty good, for those that think I am "Carnoobie."

Seriously, though, they are going down!


I blame the oil traders. [censored].

 

[Drew99GT]

Originally Posted By: NHHEMI


You are the one who seems to think it is untrue so if you are that curious do a search yourself. I am not doing it for you. I already know.


Your point? Look at what the price of oil did after it was deregulated and CBOT and NYMEX started futures trading. It went from 32 bucks to 16 bucks and stayed at roughly 25 bucks for 2 decades after the 80s. You think oil wouldn't have hit a high of 147 if it wasn't a free market in 2008? You think the shortages were bad in the 70s? Good lord...

Perhaps part of the price spike in 2007 was parabolic investment demand from the peak oil panic, the supposed dollar collapse/fear of inflation etc., the low interest rate induced asset bubbles in most risk assets, but was someone putting a gun to the guys who successfully shorted oil back to 30 bucks in 2008???

 

[L_Sludger]

Originally Posted By: whip
Originally Posted By: L_Sludger
I think - regardless of politics, those people with the most fuel efficient cars win. No gas price anxiety anymore.. at all.

People with efficient cars, never worry about gas prices? Ever?
I don't. I get 60-70mpg. I drive to work on the same routes and go the same distances as those people in 1 ton pickups hauling air and hauling butt while getting 15mpg. With the big difference, I don't worry about fuel prices whether they're 3,4,5, or even 6 dollars.