Here go the oil Speculator's again!

[ZZman]

Tempest: I am quite rich by Global standards. What does that have to do with anything?

I am sure you are too.

If I made what I do now (Middle class) and lived in many other countries I would be considered rich.

But I am comparing things here in the U.S.

 

[Tornado Red]

Originally Posted By: ZZman
The rationing idea was a answer to a short term supply issue that TR mentioned (Hurricane or Refinery issue.) It was meant to stop people from hoarding all the oil/fuel and leaving some for others. His example of the Hospital thing was funny.

As I mentioned earlier the gas station operators/companies don't raise the prices with a noble attempt to stop hoarding. They do it to gouge the consumer in a panic situation.


In seeking to benefit themselves, station owners who raise prices during an emergency benefit the community, by ensuring that those with the most desperate needs have access to fuel. This is done more efficiently than any rationing system, because it operates without any governmental or bureaucratic intervention. And as soon as the emergency is ended, prices return to previous levels.

Even with rationing, there is no guarantee that supplies will not run out completely. But with the price free to fluctuate, as supplies drop toward zero, it will make sense for the price of fuel to keep rising so that each buyer will only take the bare minimum to meet his needs. As the price rises to $10/gallon, to $15, $20, $30, no one will be so foolish as to buy more than one or two gallons -- especially if it's known that the emergency will end in a short while.

Then, as the end of the emergency approaches, prices will fall because the seller would like to earn as much as he can before prices drop back to $10, to $5, to $4 or less.

You will probably complain about this naked greed, but it is in fact time-tested over many thousands of years

 

[ZZman]

There is some twisted logic in this I can see.However this does not take into account the panic factor. Just like speculators consumers panic and rumors spread of possible higher prices so they panic buy.

 

[Jimmy9190]

Originally Posted By: Tornado Red
Originally Posted By: ZZman
The rationing idea was a answer to a short term supply issue that TR mentioned (Hurricane or Refinery issue.) It was meant to stop people from hoarding all the oil/fuel and leaving some for others. His example of the Hospital thing was funny.

As I mentioned earlier the gas station operators/companies don't raise the prices with a noble attempt to stop hoarding. They do it to gouge the consumer in a panic situation.


In seeking to benefit themselves, station owners who raise prices during an emergency benefit the community, by ensuring that those with the most desperate needs have access to fuel. This is done more efficiently than any rationing system, because it operates without any governmental or bureaucratic intervention. And as soon as the emergency is ended, prices return to previous levels.


I don't know where you live TR but here in Florida price gouging is illegal. We have our own "emergencies" every so often. They are called hurricanes. Some gas station owners here in Florida do try to gouge prices on gas, ice, water and other essentials after a hurricane passes. Our State Consumer Protection Office and the Office of the Attorney General shut the gougers down as fast as possible. In fact, after a hurricane, one of the first things you see on TV or hear on the radio as soon as service is restored are requests from our State Government requesting us to report any price gougers immediately.

So no offense initended TR but you are wrong in saying price gouging is beneficial. If it is so beneficial then why is it illegal?

 

[Tornado Red]

Higher prices are the result of and the cure for both real and speculative demand. High prices encourage new production, leading to lower prices.

Rationing schemes almost always lead to reduced production, because there's no profit in it. That is why the price controls of the 1970s did not correct the energy supply problems, but deregulation did.

Today we have artificial constraints on supply, with various government agencies impeding the production of energy. Obviously the solution is the removal of these constraints, not countervailing constraints on demand.

 

[Tornado Red]

Originally Posted By: Jimmy9190
I don't know where you live TR but here in Florida price gouging is illegal. We have our own "emergencies" every so often. They are called hurricanes. Some gas station owners here in Florida do try to gouge prices on gas, ice, water and other essentials after a hurricane passes. Our State Consumer Protection Office and the Office of the Attorney General shut the gougers down as fast as possible. In fact, after a hurricane, one of the first things you see on TV or hear on the radio as soon as service is restored are requests from our State Government requesting us to report any price gougers immediately.

So no offense initended TR but you are wrong in saying price gouging is beneficial. If it is so beneficial then why is it illegal?


Yes, I am aware that some states have laws against gouging. I hoped that my argument in favor of gouging would be illustrative.

Many things that are beneficial or at any rate harmless are, nevertheless, illegal.

If people were allowed to make very large profits from the sale of fuel, ice, water, etc., in the event of hurricanes, they might invest in additional fuel storage tanks, additional ice-making machines, and additional stockpiles of bottled water before the hurricane season begins. As it stands now, no one does this because there's no profit in it.

 

[fsskier]

The panic factor involved with an emergency that causes 10 dollar gas actually sounds pretty good. I bet that the highschoolers warming up their large truck for half an hour before driving 4 blocks to school, those that can easily walk, bike, mass transit to work, plan efficient shopping trips.... the list is endless, people are creative and would become very efficient with their gas utilization.

The one person that needed 10 gallons of gas to attend to a unplanned emergency would happily give 100 bucks for the gas that would now be available without a 12 hour line, or perhaps all closed gas stations.

 

[Tornado Red]

Originally Posted By: fsskier
The panic factor involved with an emergency that causes 10 dollar gas actually sounds pretty good. I bet that the highschoolers warming up their large truck for half an hour before driving 4 blocks to school, those that can easily walk, bike, mass transit to work, plan efficient shopping trips.... the list is endless, people are creative and would become very efficient with their gas utilization.

The one person that needed 10 gallons of gas to attend to a unplanned emergency would happily give 100 bucks for the gas that would now be available without a 12 hour line, or perhaps all closed gas stations.

Very good, you understand.

And you know what happens now when these emergencies hit. People fill their tanks, then go home and get their other vehicles and fill them up too! These are the same people who usually only buy $10 or $20 worth of fuel and never fill their tanks completely. But when they see others stocking up, they decide they must do it too, before the stations run out.

If the stations were at liberty to raise prices immediately, this would put a quick end to the hoarding, and the stations would probably have enough fuel to last until the end of the emergency, until they can get new deliveries.

 

[ZZman]

These same people who fill their vehicles up will spread the rumor that fuel is probably going to be even higher. This can cause needless panic, hoarding and temp shortages. If prices would have stayed down and people remained calm things would been fine.

 

[LTVibe]

Originally Posted By: Jimmy9190
I don't know where you live TR but here in Florida price gouging is illegal. We have our own "emergencies" every so often. They are called hurricanes.

Too bad our state can't make hoarding and panic-buying illegal also.

I remember after hurricane Andrew hit, fuel shipments to the port in Tampa were interrupted, and supplies became tight.
And even though Gov. Bush urged everyone to conserve fuel, many people in my area rushed out and sucked every one of our local gas stations dry.

TR may have a point about the benefits of 'gouging'.

 

[Tornado Red]

Originally Posted By: LTVibe
Originally Posted By: Jimmy9190
I don't know where you live TR but here in Florida price gouging is illegal. We have our own "emergencies" every so often. They are called hurricanes.

Too bad our state can't make hoarding and panic-buying illegal also.

I remember after hurricane Andrew hit, fuel shipments to the port in Tampa were interrupted, and supplies became tight.
And even though Gov. Bush urged everyone to conserve fuel, many people in my area rushed out and sucked every one of our local gas stations dry.

TR may have a point about the benefits of 'gouging'.


A great many of the "good government" types think that if they pass a law, or a few laws, everything will be wonderful. But as you can see, laws against 'gouging' can have unintended consequences, which must then be addressed by laws against hoarding... which would undoubtedly create even new unwanted and undesirable consequences.

It is best, in my opinion, to let the laws of supply and demand operate unimpeded. Government interference almost always does more harm than good -- unintended harm, usually, but avoidable.

 

[Jimmy9190]

Originally Posted By: Tornado Red
Originally Posted By: fsskier
The panic factor involved with an emergency that causes 10 dollar gas actually sounds pretty good. I bet that the highschoolers warming up their large truck for half an hour before driving 4 blocks to school, those that can easily walk, bike, mass transit to work, plan efficient shopping trips.... the list is endless, people are creative and would become very efficient with their gas utilization.

The one person that needed 10 gallons of gas to attend to a unplanned emergency would happily give 100 bucks for the gas that would now be available without a 12 hour line, or perhaps all closed gas stations.

Very good, you understand.

And you know what happens now when these emergencies hit. People fill their tanks, then go home and get their other vehicles and fill them up too! These are the same people who usually only buy $10 or $20 worth of fuel and never fill their tanks completely. But when they see others stocking up, they decide they must do it too, before the stations run out.


Sorry to say it but you are wrong again TR. We always have advance warning at least 3 days prior to landfall when a hurricane approaches Florida. We never know exactly where it will hit but the weather man gives us a pretty good general idea.

If a hurricane is headed my way I will fill my tank as soon as possible after the media puts out the notice and warnings for us to prepare for landfall. We are not worried about the station running out of gas, we just know that it is impossible to pump gas with no electricity after a hurricane. We also have sense enough to visit the bank and withdraw cash prior to landfall, because without electricity stores can not process debit card transactions. We don't do these things just because we see others doing it, we do it because we know we have to be prepared for landfall and the problems we will face after the hurricane passes.

And by the way, when I buy gas, impending hurricane or not, I always buy a full tank.

 

[Tornado Red]

Originally Posted By: Jimmy9190
Sorry to say it but you are wrong again TR....
If a hurricane is headed my way I will fill my tank as soon as possible..


You argue that your actions are rational... but then, so do the other 20 million or so Floridians. Everyone acting rationally, everyone buying as much as they can get their hands on. (sic)

 

[fsskier]

Jimmy, I do not believe your example is relevant. Filling up well before an emergency is desirable, likely tanker trucks are busy refueling stations and no real shortage exists yet - although certainly the delivery system may be strained.

Today, the world seems to be down about 1 million barrels per day of production. Should we sit in line for hours/days in search of non-existent cheap gas - then putting 30 gallons in our guzzler truck (heck, I finally got to the front of the line) or fill immediately with more expensive gas.... hopefully leaving our guzzler at home and using our econobox?

Choice #2 actually reduces our demand by half or more.

 

[Tempest]

Originally Posted By: ZZman
Tempest: I am quite rich by Global standards. What does that have to do with anything?

I am sure you are too.

If I made what I do now (Middle class) and lived in many other countries I would be considered rich.

But I am comparing things here in the U.S.

Oil is a global product. It is impossible to simply limit the discussion to the US when people around the world buy the product on the same market.

 

[odie]

Are the talks between SAUDI ARABIA and China / Russia already a factor ? Or have they not got wind of it yet ?

 

[Tornado Red]

Originally Posted By: odie
Are the talks between SAUDI ARABIA and China / Russia already a factor ? Or have they not got wind of it yet ?


A Google search didn't reveal any stories about any such talks. So either no journalists were invited, or no talks were held.

 

[odie]

Seen it on NBC nightly news Tuesday . Tom Brokaw reported it from Iraq .

 

[Tornado Red]

Originally Posted By: odie
Seen it on NBC nightly news Tuesday . Tom Brokaw reported it from Iraq .


I did see a link to the story on the Drudge Report, after I earlier said I couldn't find anything. It seems that I was searching with "oil" as one of the key words, and according to Brokaw that wasn't discussed. But then again, how would he know, if the meeting was in Moscow or Riyahd and he was in Baghdad?

 

[LTVibe]

Originally Posted By: odie
Are the talks between SAUDI ARABIA and China / Russia already a factor ? Or have they not got wind of it yet ?

The Saudis have been 'talking' to China for years:

Shifting Sands: Saudi Arabia's Oil Moves East to China

Quote:
Over the past 10 years or so, the Kingdom had been forging closer trade ties with China, becoming its key source of oil. In 2009, Saudi oil exports to China reached one million barrels per day (bpd), or 20% of its total oil imports and nearly double the number of barrels it exported the previous year; in contrast, U.S. imports of Saudi oil fell to less than one million bpd in 2009 for the first time in over two decades.