F... gas prices

[Sheriff Gonna Getcha]

Originally Posted by Schneed10

Bolded part 3: How can the US Government demand more production from OPEC? Do you even understand who OPEC is? What negotiating power does the US Government have over OPEC?? This makes no sense. They can do whatever the eff they want, we have no power there.

I don't that is entirely correct. The U.S. government has a great deal of influence over middle eastern countries and, by extension, OPEC. For example, many middle eastern countries rely on the U.S. to supply their militaries with arms. Guess who gets to approve or reject the sale of those weapons? The United States Congress. Moreover, if the U.S. ever manages to create a semi-stable security environment in Iraq, the U.S. could pressure the Iraqis to flip the bird to OPEC and start pumping out boatloads of oil. Obviously our influence over OPEC's member countries wasn't great enough to convince them to up their oil quotas, but I think it's inaccurate to say that we don't have any negotiating power.

[steveo395]

This problem could easily be solved if congress would just let us build new refineries and drill for oil in Alaska and off the eastern and western shores. This needs to happen. Our economy is based on the abundance of cheap energy, which is now getting expensive. We need to end our dependence on foreign oil and start drilling here. There is plenty of oil in America for us to use for many many years. I'm all for using alternate sources of energy, but they are just not ready yet. Right now they all suck. If we drill for more oil here, it will give us the time we need to develop alternate technologies. Whether you like it or not, we need to drill for more oil here.

[Schneed10]

Originally Posted by Sheriff Gonna Getcha

I don't that is entirely correct. The U.S. government has a great deal of influence over middle eastern countries and, by extension, OPEC. For example, many middle eastern countries rely on the U.S. to supply their militaries with arms. Guess who gets to approve or reject the sale of those weapons? The United States Congress. Moreover, if the U.S. ever manages to create a semi-stable security environment in Iraq, the U.S. could pressure the Iraqis to flip the bird to OPEC and start pumping out boatloads of oil. Obviously our influence over OPEC's member countries wasn't great enough to convince them to up their oil quotas, but I think it's inaccurate to say that we don't have any negotiating power.

OK point taken, change it from "none" to "very little".

[FRPLG]

Originally Posted by Sheriff Gonna Getcha

I don't that is entirely correct. The U.S. government has a great deal of influence over middle eastern countries and, by extension, OPEC. For example, many middle eastern countries rely on the U.S. to supply their militaries with arms. Guess who gets to approve or reject the sale of those weapons? The United States Congress. Moreover, if the U.S. ever manages to create a semi-stable security environment in Iraq, the U.S. could pressure the Iraqis to flip the bird to OPEC and start pumping out boatloads of oil. Obviously our influence over OPEC's member countries wasn't great enough to convince them to up their oil quotas, but I think it's inaccurate to say that we don't have any negotiating power.

All true and all examples of things that would bring even greater hatred of America in the middle east unfortunately. Our power there is directly offset by their unreasonableness(word?) towards our actons and their willingness to do awful things when we piss them off.

[MTK]

I also find it hard to believe that big oil is just an innocent bystander in all of this.

[Schneed10]

Originally Posted by Mattyk72

I also find it hard to believe that big oil is just an innocent bystander in all of this.

Do you have anything to back that up or is that just a conspiracy theory?

[Schneed10]

Screw it, I'll do the math for you. Which would you rather have:

$100,000 in revenue
$80,000 in expenses
$20,000 in profit (20% profit margin)

or

$500,000 in revenue
$450,000 in expenses
$50,000 in profit (10% profit margin)

If you said you'd take the $20,000 with a 20% margin, can I pretty pretty please play poker with you sometime?

[70Chip]

I doubt that increased demand is soley to blame for oil quadrupling in price. I think speculation is driving the increase as well. Hedge fund managers are now into oil big time. Even individuals are getting in for the ride. A friend of mine justified it by saying he had to recoup the losses he was experiencing at the pump. Money chases money. As more and more people are seeing the possibility of making money in commodities rather than stocks and bonds, the price only increases. Imagine if a bunch of moneyed investors suddenly all decided that baseball cards were a sure thing. Their sudden entry into the market would necessarily force the price of a Clemente rookie card through the roof. The question is, is this a permanent thing or at some point will gravity have it's affect. We need a crash badly. As quickly as the money went in, it will run for the exits if the price falls fast enough.

I think there are a few simple steps that could be taken to at least discourage new money from forcing up the price any further. The Democrats may serve useful here as their penchant for regulation would surely be helpful. Maria Cantwell of Washington is making this a pet issue. She's kind of a butter face but she has nice hair and seems relatively bright. It would be worth a try at any rate.

[JoeRedskin]

Originally Posted by 70Chip

I doubt that increased demand is soley to blame for oil quadrupling in price. I think speculation is driving the increase as well. Hedge fund managers are now into oil big time. Even individuals are getting in for the ride. A friend of mine justified it by saying he had to recoup the losses he was experiencing at the pump. Money chases money. As more and more people are seeing the possibility of making money in commodities rather than stocks and bonds, the price only increases. Imagine if a bunch of moneyed investors suddenly all decided that baseball cards were a sure thing. Their sudden entry into the market would necessarily force the price of a Clemente rookie card through the roof. The question is, is this a permanent thing or at some point will gravity have it's affect. We need a crash badly. As quickly as the money went in, it will run for the exits if the price falls fast enough.

I think there are a few simple steps that could be taken to at least discourage new money from forcing up the price any further. The Democrats may serve useful here as their penchant for regulation would surely be helpful. Maria Cantwell of Washington is making this a pet issue. She's kind of a butter face but she has nice hair and seems relatively bright. It would be worth a try at any rate.

Just recently read an article on the "oil bubble" comparing it to the "housing bubble". While there is speculation driving the price, there is an underlying increased demand from developing countries (particurlarly, as Schneed has repeatedly pointed out, India and China). Thus, while there may be some easing in the future as the market cools down, it is unlikely to "burst".

IMO, it appears to be a confluence of events and market forces that is making a resource, that had been vastly underpriced, reach its market price. It will probably overshoot and then ease back (my guess it ends up around 4.50). Prior to this latest spike, how many people (other than those who drove for a living) actually budgeted their weekly gas expenses? Doesn't that suggest to you that it may have been a bit underpriced?

The price now is beginning effect people and changing their habits - to me, that is an indication that it is reaching a price close to its free market level.

[BTW - Just to indicate how the gas prices are affecting us - now, b/c of our driving needs for commutes and such, we have actually added "gas" as a separate line item in our budget where previously it was part of discretionary spending.]

[70Chip]

Originally Posted by JoeRedskin

Just recently read an article on the "oil bubble" comparing it to the "housing bubble". While there is speculation driving the price, there is an underlying increased demand from developing countries (particurlarly, as Schneed has repeatedly pointed out, India and China). Thus, while there may be some easing in the future as the market cools down, it is unlikely to "burst".

IMO, it appears to be a confluence of events and market forces that is making a resource, that had been vastly underpriced, reach its market price. It will probably overshoot and then ease back (my guess it ends up around 4.50). Prior to this latest spike, how many people (other than those who drove for a living) actually budgeted their weekly gas expenses? Doesn't that suggest to you that it may have been a bit underpriced?

The price now is beginning effect people and changing their habits - to me, that is an indication that it is reaching a price close to its free market level.

[BTW - Just to indicate how the gas prices are affecting us - now, b/c of our driving needs for commutes and such, we have actually added "gas" as a separate line item in our budget where previously it was part of discretionary spending.]

I think it was definitely underpriced in the 90s when it was under a dollar. When you figure in Fed and State taxes, it was practically free. (I think oil was around $13 a barrel.) So, that was never going to last, but I don't think demand has increased proprtionately with the increase in price. I think there are other factors at work.

Wether or not to extract oil from ANWR has reminded me of a joke that the late Senator Howell Heflin of Alabama told on Ted Kennedy some while ago. Senator Kennedy was photographed on his boat with some young women and Heflin remarked, "I guess Senator Kennedy has changed his position on offshore drilling." Hilarious. Get well soon Ted. We want you live to be at least 100.

[saden1]

Originally Posted by 70Chip

I think it was definitely underpriced in the 90s when it was under a dollar. When you figure in Fed and State taxes, it was practically free. (I think oil was around $13 a barrel.) So, that was never going to last, but I don't think demand has increased proprtionately with the increase in price. I think there are other factors at work.

Did you just make the case for oil being overpriced or that it's practically free and possibly profitless?

[Daseal]

Welcome to capitalism. How much should something be? As much someone will pay for it and not stop buying it. It's important to find that balance, and thanks to big oil stubbing mass transit in many cities before it got big, we're very dependent on gas, thus cars. The price sucks, no doubt about it -- but the oil companies are in the market to make MONEY, not to give the USA a break. What incentive is there for them to drop prices? People are going to drive. Plus, they're getting much more money from other sections of the world (China/India) which is a big reason why they're making record profits.

[EARTHQUAKE2689]

I fraking hate driving now. You cant even do favors for anyone anymore

[dmek25]

schneed, i didnt mean to attack you personally. but we definitely look at this differently. you think its fine for gas to be $5.00- $6.00, or whatever, a gallon so the companies can maintain record profits. we disagree on that. we disagree on how they go about it. we definitely disagree on the governments place in this problem. you see this as capitalism at is finest. i see this as raping the American public. the government can control anything it wants to. why not oil? because of the Saudis influence with the American government. and yes, i understand who O.P.E.C is. and i also understand the military's involvement in the middle east. the little bit of stability they have comes from an American influence/ presence. we Americans are always more then willing to aid any country that asks. how about someone scratching our backs every once in a while?

[Schneed10]

Originally Posted by dmek25

schneed, i didnt mean to attack you personally. but we definitely look at this differently. you think its fine for gas to be $5.00- $6.00, or whatever, a gallon so the companies can maintain record profits. we disagree on that. we disagree on how they go about it. we definitely disagree on the governments place in this problem. you see this as capitalism at is finest. i see this as raping the American public. the government can control anything it wants to. why not oil? because of the Saudis influence with the American government. and yes, i understand who O.P.E.C is. and i also understand the military's involvement in the middle east. the little bit of stability they have comes from an American influence/ presence. we Americans are always more then willing to aid any country that asks. how about someone scratching our backs every once in a while?

The bolded part seems to say something along the lines of "we just disagree."

That's great, but you still haven't posted one single argument that holds any water.

Can I ask you something? Why is it wrong for companies like Exxon to make boatloads of money?