F... gas prices

[MTK]

Originally Posted by Schneed10

Supply and Demand is definitely the all-encompassing argument and is the biggest driver. But it's important to look at what's driving the increases in demand. A big part of it is developing markets (China and India) ramping up their manufacturing and using more oil. On the supply side, supply is dropping because of conflicts in Iraq and tensions with Tehran. Here's where you can get political, and I'm not going to jump into the fray in a political argument, but Bush's excursion into Iraq is definitely not helping gas prices. Whether or not we're justified in being there, that's another story and again I'm not going there.

But Matty, those are the two biggest factors at play here. What else is it? Are you accusing big oil of price gouging? Because if so, I hope you have some numbers to back that up.

Are you implying big oil is just an innocent profiteer? They're just simply raking in record profits because of good 'ol economics 101, supply and demand? Please.

I'm not exactly bringing up a new concept here regarding oil companies and accusations of price gouging.

[DynamiteRave]

Okay so DC v. MD v. VA; DC has the most expensive gas on average right now which is about $2.86. By the end of summer, how much do you all (or the media) estimate the prices?

It looks like they are definitely gonna get higher than they were post-Katrina.

But.. *crosses fingers*

[dmek25]

i mind the gas prices and sorry for driving a tahoe ,but to blame the high gas prices on what vehicle you drive is stupid.if everyone owned a tauras gas would probably be about 5.00 a gallon so the big oil companies could substain their record profits.the problem is that there is not one person sitting in d.c. that has the balls to cap the price.it is done with milk,and other things so dont tell me it cant be done.politicians are very concernd with immigrants right now that i could give a rats ass about.please stick to the REAL issues

[GTripp0012]

F Gas Prices!

Although take into consideration that as high as the price of gas is right now, it's still very cheap when compared with any other fossil fuel. I think I read somewhere that gasoline, as a substance, is closer to the value of water then to any other fuel producing substance.

[drew54]

97 Chrysler LHS, big car but awesome milage as I am averaging around 24.7 MPG.

But on days that I am late for work I usually end up getting about 19. It's amazing how much gas you use going from 65 mph to 80 mph.

Has anyone tried out the gas savers? Things like the Tornado fuel saver, K&N air filter, or any other kind of car modifications to get better mileage??

Gas in Iowa is 2.65 right now. There was a 20 cent jump since Sunday.

[cpayne5]

Originally Posted by drew54

97 Chrysler LHS, big car but awesome milage as I am averaging around 24.7 MPG.

But on days that I am late for work I usually end up getting about 19. It's amazing how much gas you use going from 65 mph to 80 mph.

Has anyone tried out the gas savers? Things like the Tornado fuel saver, K&N air filter, or any other kind of car modifications to get better mileage??

Gas in Iowa is 2.65 right now. There was a 20 cent jump since Sunday.

Tornado is crap. K&N filter won't do anything but elevate the level of SI in your oil.

The best thing you can do is make sure you run proper air pressure in your tires. Also, don't haul around fat people. They'll kill your mileage.

[BDBohnzie]

Originally Posted by cpayne5

Also, don't haul around fat people. They'll kill your mileage.

So that's my problem. Damn...I need to lose some weight then

The one thing no one has pointed out is the reduced amount of refinery production in the last 10+ years. There is sufficient supplies of oil coming into the country, but because of refineries closing and/or not being run, the supply of usable fuels has dropped. Part of Big Oil's profits come from the fact they have less maintenance and labor to pay for in regards to their refineries. And from what we saw from Katrina, a 1% drop in refinery production can wreak havoc.

[Schneed10]

Where oil companies make all their money is when oil prices start coming down from a peak. Gas stations will raise the price of gas when the price of a futures contract for oil rises. But when the futures contract drops, gas stations aren't in a real big hurry to drop prices back down. The principle at play is called inelasticity of demand, for all you econ nerds out there. Basically it means that gas is something we all need, and we're willing to keep paying for it even as prices get to exhorbitant levels.

Gas prices seem to go up so fast because on the way up, they're simply following the price of the futures contract. But when the futures contract drops, gas stations know they don't have to drop prices right away, they know that if we were willing to pay $2.70 per gallon for the last week, we'll be willing to pay it again this week. So they try to hold it at $2.70 as long as they can. Then a station decides I'll set my price at $2.68 and people will flock to me to save money. Then the next station sets the price at $2.66, and then someone comes in at $2.64. And slowly but surely, this price competition brings the price back down.

That's why gas prices seem to go up so fast and come back down so slowly. It's a commodity we need, and we're kind of at the mercy of those who set the prices.

I mean think about it. At what price point would you decide OK that's it, I'm selling my car and taking the bus/train everywhere. It would have to get to like $5.00 for me to make that move. It's just the nature of the beast. The prices are what they are because America can't shake it's need for oil.

[Schneed10]

And you can't blame the gas stations for lowering the prices slowly like that. They're just trying to make a buck when the opportunity presents itself. Blaming them would be like blaming Chris Samuels for negotiating for a salary befitting a pro-bowl LT. If you were in Samuels' shoes, you would try to get the money that was coming to you, too.

Crying about big oil or the prices set by gas stations does not get at the heart of the problem. If America wants oil prices to drop, we need to stop being dependant on oil.

OK that's enough posts in a row. I feel like I'm talking to myself. Goodnight boys.

[FRPLG]

Supply and demand is the sole culprit when it comes to PRICE of gas. Oil companies are far too public to have legitimately gouged consumers.

Now the real complicated issues lie with the supply part of the equation. That's where eveything is totally F'ed up. Screw big oil for that and especially the f'ing weather that is killing our supply. Oh yeah and F our entire government for not taking action to reduce our demand for oil. If the government would make alt fuels viable(ie: cheap and effective enough to drive demand) then we wouldn't be in this shape. There needs to be serious tax breaks for alt fuel vehicle owners and gigantic tax breaks for car companies who develop them. I am not a big subsidy type guy but in this case the only thing that is going to move the car companies along is money. There is no other good incentive for them to get us quickly into position to use enough alt fuel vehicles to actually make a difference.

[mcalderone10]

part of the problem may be supply and demand but the other problem is competition. companies drive prices down to get you to buy from them not someone else. When all the companies are getting together and setting prices this is preventing competition. They realize ppl need gas and that ppl will pay no matter what so they can set it higher.

i dun understand that futures thing that guy was talkin about it was wayy too much reading.

mine is shorter so believe me cuz mine is quicker to read

o and dont read his

[itvnetop]

By the Numbers

Exxon posted a 30% profit increase during the last quarter from the previous year... the annual 36 billion earning was the largest net profit in US history. Overall, the 12 US oil companies in the S&P saw close to a 50% increase over the fourth quarter.

We're not using twice as much oil as the year before... supply and demand is a part of the equation. but there's a correlation between what we're paying at the pumps and the increasing belt size of these fat cats.

[Schneed10]

Originally Posted by itvnetop

By the Numbers

Exxon posted a 30% profit increase during the last quarter from the previous year... the annual 36 billion earning was the largest net profit in US history. Overall, the 12 US oil companies in the S&P saw close to a 50% increase over the fourth quarter.

We're not using twice as much oil as the year before... supply and demand is a part of the equation. but there's a correlation between what we're paying at the pumps and the increasing belt size of these fat cats.

Like I said before, these profits are a result of inelasticity on gas prices. Oil companies have to pay for oil in order to make the gasoline. When the price of that oil goes up, they jack the gas prices up to compensate. But when the price of oil goes down, they don't drop gas prices as fast because they know we'll keep paying the high price, because we all NEED gas. It's something many of us can't live without. So Big Oil profits are not driven by the RISE in gas prices, their driven by the FLUCTUATION in gas prices. The bigger the swings up and down, and the more often they happen, the bigger the profits.

That's not price gouging, that's just basic principles of business. You charge the customer what the customer is willing to pay. You're willing to pay for it aren't you? As long as you keep handing over the cash to drive your car, there's nothing to complain about. That's life.

[itvnetop]

Originally Posted by Schneed10

That's not price gouging, that's just basic principles of business. You charge the customer what the customer is willing to pay. You're willing to pay for it aren't you? As long as you keep handing over the cash to drive your car, there's nothing to complain about. That's life.

Thanks for the breakdown of inelasticity... very interesting stuff indeed.

In terms of complaining, if you lived out here in LA you'd do the same thing... we don't have a great public transportation system like back home on the east coast. If you take the LA transit, you must allocate up to four x the amount of time to get to and from work. Basic economics says that this lossed time = negative output. The cost of taking the MTA offsets the savings cost at the pump. Every person here drives one to a car b/c of the crap MTA. We depend on our cars like we depend on food out here- sorry, it's just the way it is. It's not a luxury for most of us to have to drive our cars to work.

As you also know, rising oil prices also increase the costs for those who DO use public transportation. Are they allowed to complain? Many of the people who work downtown live way north in the Valley or way south in Orange County- the public transportation prices are outrageous nowadays!

Here's another analogy... a few years back, grocery workers went on strike due to union issues out here. Basically, we were forced to go to non-unionized food outlets to buy sustenence- and we paid more to do so. The chain grocery stores remained open (they hired temps/scabs), but there was hardly any food in the aisles. I kept shelling out extra cash to the smaller food outlets (trader joe's, gelson's, etc), so does that mean i wasn't allowed to complain? I had to eat didn't I?

[Skins fan 44]

Just heard today that Ford is closing about 14 or so plants across the nation costing bunches of jobs at there factories plus there suppliers factories. You would think Ford or and the other American companies would think of a better car that gets good gas mileage.