F... gas prices

[dmek25]

and why we are on the subject, is finding oil in Alaska a sure thing? because if it is, its about time to make that move. im for protecting whats beautiful, and right about America. but this very quickly could become a national crisis, if something isn't done. oil is driving up the price of everything. i really feel for the truckers

[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".

[Schneed10]

Originally Posted by dmek25

and why we are on the subject, is finding oil in Alaska a sure thing? because if it is, its about time to make that move. im for protecting whats beautiful, and right about America. but this very quickly could become a national crisis, if something isn't done. oil is driving up the price of everything. i really feel for the truckers

Further embarassment...

It's a well-known fact that Alaska is home to a huge oil reserve, one that would nearly double our supply of domestic oil if we tapped into it.

[dmek25]

Originally Posted by Schneed10

Further embarassment...

It's a well-known fact that Alaska is home to a huge oil reserve, one that would nearly double our supply of domestic oil if we tapped into it.

quit being a dick. i ask a question, because i didnt know. sorry for being so mis- informed

[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.]

[Boston Brave]

Expensive gas is here, more expensive gas in the future as that is the result of supply and demand.

[Schneed10]

Originally Posted by dmek25

quit being a dick. i ask a question, because i didnt know. sorry for being so mis- informed

Dude I was just attacking the post, not you. Now you're calling names.

You called my first post the stupidest thing posted on this site. There was no problem with that.

Maybe I should PM the mods and whine about it to have you warned.

[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?

[JoeRedskin]

Originally Posted by Schneed10

Further embarassment...

It's a well-known fact that Alaska is home to a huge oil reserve, one that would nearly double our supply of domestic oil if we tapped into it.

The estimates are that there are between 5-16 billion barrels in ANWR

Arctic National Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including Economic Analysis (it's an old survey, 1996 so with newer methods more recoverable oil may exist).

By using this resource in a measured way, the US could reduce its dependence on foreign oil by 5-10% for the next 12-15 years.

[JoeRedskin]

Originally Posted by Mattyk72

Overnight the price of gas at my local station went from $3.76 to $3.85

WTF!

Yesterday, gas prices rose .10 while I was at work. I feel like I should top off every morning (I have 70 mile round trip commute) b/c the longer I wait to fill up, the more the prices go up.

[JoeRedskin]

Originally Posted by Schneed10

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

B/c they're making at my expense [j/k].

[Schneed10]

Originally Posted by JoeRedskin

B/c they're making at my expense [j/k].

Even though you're joking, that's pretty much the crux of their argument.

Why do middle class citizens (and poor and affluent citizens for that matter) have more right to pay low gas prices than Exxon does to charge higher ones?

[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.

[JoeRedskin]

Originally Posted by Schneed10

Even though you're joking, that's pretty much the crux of their argument.

Why do middle class citizens (and poor and affluent citizens for that matter) have more right to pay low gas prices than Exxon does to charge higher ones?

Well, I think oil is one of those resources where gov. may have some legitimate involvement (not just in taxing its use). To the extent there are monopolistic tendencies or market collusion among the companies, these should be regulated.

I haven't seen any allegations of collusion among oil companies other than "they are charging more, therefore they must be colluding".

In order to work, the free market does require everyone to "play fair", and govt. can legitimately investigate the oil companies actions to determine if they are indeed doing so. I agree, however, that the mere fact that they are making profits does not, in and of itself, mean they are cheating the system. (In a fight, does the fact I won mean I started it?)

While I haven't fully thought through this next point, given the nature of the US economy, some level of govt oversight of oil/gas prices may be appropriate. The US economy, given the size of the country, is reliant on the transport of items over long distances. Radical increases in oil/prices effect markets well beyond oil/gas as an individual commodity. In this way, and even though sold through multiple companies, oil seems to me to have similar market characteristics of a monopoly (i.e. electric, phone and BGE). In such situations, even if no collusion is shown, govt has a role in ensuring that the pricing and profit levels are "fair". (I guess, however, that if Exxon attempted set its price way over market, then everyone would buy from one of the other providers - That appears to me to be the crux of the question - is there enough competition between oil providers to ensure that the price is a true market price).

Also, I think 70Chips point of regulating speculation in the oil/gas market is appropriate. Again, given the effect that increases in oil prices have on other markets, it seems to me speculation in the oil market should be pretty much prohibited. Removing specualation from the picture may ease the growth, hopefully create a more straight forward "supply/demand" equation, and limit the effect of radical price increases on other markets.

[dmek25]

Originally Posted by Schneed10

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?

if its fair, then why does the government regulate the price of milk, or cigarettes? when is enough, enough?