http://www.chron.com/disp/story.mpl/business/4831420.html from article: The national average price for regular unleaded rose 1 cent to $3.22 per gallon, marking a new record, AAA said. That puts it within striking distance of the inflation-adjusted record of $3.29, which was set in March 1981, the Energy Information Administration said.
Are there any realtive insiders on this bbs who can tell us what is really going on? I suspect that they have some sort of algorithm that shows how to maniupalate prices up and down to increase profits. Every time they go down around $2/gallon, many idiots go out and by Chevy Subrubans on 7 yr payment plans and hook themselves for 10 yrs with the gaz guzzlers. People decide to close on the 4500 sq ft McMansion 40 miles from work as it is so comfy and cheap for them and their two kids, there by locking themselves into high gasoline costs, not to mention high heating and cooling bills.
^ That's why I'm not that bothered by high oil prices. I suspect the oil companies are gouging us but if that gets people to change their habits then let them gouge. The best way to lower prices is to reduce the demand and if we can all start conserving and switching away from fossil fuels it won't matter if they gouge.
the article also states that we do spend less on gas than we used to, but that has more to do with the automobile industry making more fuel efficient cars. one thing the conservatives can argue is that high gas prices did force the industry to compete with the smaller imports from overseas. maybe the market will adjust itself again.
People can change, but changing for good is a different matter. In the early 90's, oil prices fell down to $10/barrel. That along with good times and the CAFE standard loophole fueled the SUV boom. We had a similar situation when the embargoes in the 70s caused people to think compact cars were here to stay. While it did ruin the American standard of huge gas guzzlers, the cultural preference for that type of car lasted. As for the greed in artificially controlling the market price or supply, the embargoes caused a world of hurt to the oil nations after recessions forced demand to lower and consumer nations started diversifying their oil sources. Maybe the 10s will follow this trend, and people will decide to shift into hybrids. But Americans love to control the road with large and powerful vehicles. That's not a habit that will die soon, if we have a choice.
no. this market model doesn't work for inelastic demand. for the most part, most of us can't go out and buy a fuel efficient car tomorrow. and as has been seen over the past 4 years, demand for oil hasn't come down. and it won't really. thats why this market trading of oil is wrong.
There's nothing wrong economically to trade oil in principle. Otherwise other inelastic markets would be better off heavily regulated, which has been proven less efficient in cases ranging from utilities to carbon emission regulation. The problem is that the vast majority of the oil supply is owned by inefficient nationalized oil companies, and those oil rich countries take part in a cartel to artificially control the supply. Furthermore, a majority of these countries are run by dictators and oligarchs who use oil as their personal piggy bank and crowd pleaser. Market traders are betting off the scraps and whims of the oil cartel. As been stated before, our gas problem is currently being affected by a peculiar drop in refinery capacity which, to a casual observer, should not be as bad as post Katrina levels.
glynch...the closest thing to price manipulation that has occured in the past couple years that i know of was on the DOWN side believe it or not. for me as a trader it's pretty funny and awesome even trying to fathom the balls that john arnold and his group at centaurus energy had when they completely owned brian hunter at amaranth and put them out of business. hunter, who was profitable but wreckless, got stuck in a massive position playing a spread on nat gas prices, basically betting on the staying in a range. well...they didn't and from my understanding it was partly because john arnold and his group found out about hunter's position and kept holding down prices so that hunter would be squeezed out and forced to dump at horribly low prices due to margin calls. hunter lost about a billion on that trade...lol. that's what amaranth gets for having NO RISK MANAGEMENT at their firm. it's amazing that people with that much money can just go about unsupervised. on the other side arnold made somewhere around 1.5 billion last year. he is just an amazing energy trader. basically, it's impossible to manipulate a market for this kind of extended period of time if that's what you are thinking. yes you can do short term moves but you put your position at risk and you can lose a hell of a lot and you need a crapload of capital to do it. also, remember how far nat gas crashed from it's highs, so it's very easy to get burned bad. that's how t. boone pickens made a lot of his money last year by going short on nat gas. also, i am stock trader and not an energy trader, but from my understanding pretty much the same concepts apply in that realm of trading. i deal with a lot of the order flow kind of stuff so i have a relatively good grasp of manipulation and idiot buying and selling. finally, i firmly believe that oil companies do not want gas prices this high for extended periods of time because people will start to switch to greener more energy efficient vehicles. but you are right people do start to get complaicent when gas drops back to $2 and i think it sucks because i think there are a lot better techs out there that we aren't developing due to the convienence of gas and oil.
that doesn't really explain why market trading of oil is wrong. if the market didn't have access to trade it then there would be horrible price inefficiencies. also, i think it will be interesting to watch how china develops the central asian oil and gas resources because there are a lot there that just can't make it to market due to lack of transport. for instance, china used to suck up all the steel it could get its hands on, but now it is a net EXPORTER of steel. it will be interesting to see if they are able to become more self sufficient with their oil needs.
if the market didn't have access to it it wouldn't suffer absurd price inflations. just because some folks in rotterdam think X about the situation in iran doesn't mean supplies are really in danger. only oil companies would be the best judges of that.
so would you not want the market to have access to any commodities? also, energy prices aren't running up solely because of fears about war with iran. i know it has something to do with oil and gas crack prices. i have absolutely no clue what those are and mean but my vague understanding is that it relates to the refining process which i guess would be further evidence that this is a refining issue and not a fear issue.
I don't think people are actually arguing that trading commodities is bad but look at the ones in the energy sector and compare them to the rest of the commodities which are traded. No other commodities compare to them in terms of need.
No but we can certainly make incremental changes to our lifestyle that reduce our reliance on oil. Maybe you can't buy a hybrid tomorrow but at some point you will buy a new car so buy one then. In the meantime you can adjust your driving patterns so your drive less, like consolodating trips, you can bike and walk more, or take mass transit. If those don't work in your city car pool. You can buy a manual push mower instead of a gas one. A lot of people just throw up their hands believing that they are helpless in the face of high oil prices and instead of lookign for ways as individuals we can reduce demand are too quick to blame the oil companies, traders, and politicians. Sure those guys deserve blame but in the end its us who fuel the demand.
your absolutely right at the individual level. but on the macro level i think our government should do more to stop the oil corporations.
tax them enough that increasing prices doesn't help their bottom line. regulate them. give them incentives to build more refineries (as seems to be the problem right now). have a freaking mass transit system in houston that people use. stop building highways and build rail. etc. governments can employ various means to coerce. i didn't run for office. those who did need to find solutions to the problems we face. and right now gas is certainly one of the problems.
i'm under the impression most government officials have their hands in oil somehow and are making money off it. If not making money know people who are and might not want to change whats going on in fear of making those connections mad and thus hurting them. yes, no? i dont see gas prices going down anytime soon, and by soon i mean years and years.
From what I understand a big chunk of the price we pay at the pump is from local, state and federal taxes, 50 cents or higher per gallon in most areas. Could it be possible to remove the fuel tax and tax other items to generate the same amount of income?
stop them? from what? producing oil? were they manipulating the market when oil prices were cheap as hell a decade ago?
