Gasoline Prices

[Michael Larson]

Originally Posted by Brian A. MacNeish

Hohum!

So what's the Canadian Parliament doing Brian. Ho Hum indeed!

[Michael Larson]

Well look at how market forces are working.

Demand is down and so is the price.

You want lower prices yet?

Commit to more drilling and supply WILL increase and the price WILL go down.

Conservation is a short term solution because it has limits.

The mid and long term solution is to put more product on the market. the faster the better.

The market works if you let it.

[Jae Williams]

[quote=mlarson]Well look at how market forces are working.

Demand is down and so is the price.

You want lower prices yet?

Commit to more drilling and supply WILL increase and the price WILL go down.

More or less. The price of oil is based on "futures", and the investors are gambling the the price will be higher in ten years and they will make scads of $$$. But if the gov't allows drilling on leased lands, as well as other potentials, the "futures" price will be lower, so the price at the pump will begin to drop immediately.

Conservation is a short term solution because it has limits.

The only limit is if we don't continue to conserve. If we make it an on-going part of our lives, it will always help.

The mid and long term solution is to put more product on the market. the faster the better.

But it will be long-term to gain the supply. The gov't limited the leases on lands to exploration only--drilling is another story. It will take at least two years for the oil companies to get permission to drill, at the present rate of Congressional action. It took that long in the past just to get permission to explore--and then the oil companies had to sue!! But if the process were to start today, the "futures" price would drop tomorrow.


The market works if you let it.
Agreed.[/quote]

[Michael Larson]

The longer we wait to attempt to add more supply thet higher the price at the pump will be.

Conservation has to be ongoing. Agreed.

The futures market sets the price based on the presumed supply and demand in the future.

Speculators lose money too. Lots of it.

It has been shown repeatedly that speculation is not the current cause of high oil prices.

Constriction of supply and increased demand are the main drivers.

[Jae Williams]

All true.
I posted something last year during a similar discussion about a boycott for one day. I cannot for the life of me see how a one-day boycott would bring down prices. If we, as an entire nation, were to practice conservation, the price of fuel would begin to drop immediately. And if we were to continue the practice, the price would continue to fall.

But, also, the powers-that-be must renew leases allowing drilling and removal of oil from present locales.

Why do we continue to vote for these people???

[Brian A. MacNeish]

Originally Posted by jwilliams4

All true.
I posted something last year during a similar discussion about a boycott for one day. I cannot for the life of me see how a one-day boycott would bring down prices. If we, as an entire nation, were to practice conservation, the price of fuel would begin to drop immediately. And if we were to continue the practice, the price would continue to fall.

But, also, the powers-that-be must renew leases allowing drilling and removal of oil from present locales.

Why do we continue to vote for these people???

There are hundreds of billions of barrels of oil to be had in conservation and efficiency, but no one really wants to work on these as it means a change in habits and lowered expectations.

I drive at 90kmh (55mph) and pass not a car on the 4 lane highway that takes me into the city. Transports pass me as I go uphill; some vehicles are definitely going way over the 110 kmh (66 mph) speed limit where gas consumption increases geometrically. Why are they complaining about high gas prices when all they have to do is slow down and enjoy the drive.

Fools and their money are soon parted!!!

T. Boone Pickens has it right........more drilling is not going to save us.......any time soon or maybe forever!

[Michael Larson]

Originally Posted by Brian A. MacNeish

T. Boone Pickens has it right........more drilling is not going to save us.......any time soon or maybe forever!

He is only partly correct/ conservation drilling, refining capacity, coal, nuclear and farther down the list alternative energy all need to have a part in any real solution.

It is the environmentalists and their political lackies that are the major road block to supplying energy needs.

Thankfully their support may be waning as people come to understand just how much they have affected all of us with their politically motivated junkscience.

[Jae Williams]

Originally Posted by Brian A. MacNeish

There are hundreds of billions of barrels of oil to be had in conservation and efficiency, but no one really wants to work on these as it means a change in habits and lowered expectations.

Maybe we need to prioritize our "expectations". What exactly are we "expectating", anyway?

I drive at 90kmh (55mph) and pass not a car on the 4 lane highway that takes me into the city. Transports pass me as I go uphill; some vehicles are definitely going way over the 110 kmh (66 mph) where gas consumption increases geometrically. Why are they complaining about high gas prices when all they have to do is slow down and enjoy the drive.

There have been many times when I've passed while doing the speed limit of 55mph. These fools go past me so fast, that I have to get out to see if my tires are going around. (Boy!! Do that hurt!!)

Some people think that by driving faster they get there sooner--but I generally pull up beside them at the stop light. Actually, the only thing they might get to sooner is their funeral.

I slowed down years ago and found it take no longer to "get there", and I feel so much better without all that stress...

Fools and their money are soon parted!!!

I'm not really a fool, but my money parted anyway...wait a minute...maybe...??

T. Boone Pickens has it right........more drilling is not going to save us.......any time soon or maybe forever!

[klott]

Originally Posted by mlarson

Well look at how market forces are working.

Demand is down and so is the price.

You want lower prices yet?

Commit to more drilling and supply WILL increase and the price WILL go down.

Conservation is a short term solution because it has limits.

The mid and long term solution is to put more product on the market. the faster the better.

The market works if you let it.

Look at this story, and you will see how it works, mighty strange that some oil mysteriously showed up, and forecasters predictions were wrong. Pay attention to the concerns, the speculators have about out of control inflation, and therefore they dropped the price on a barrel by almost $12 in 2 days. It makes me angry, that they say it will take many days of a continuos drop in crude prices before the price of gas comes down,but when the price goes up, gas prices are immediate, sameday in some cases!

[Michael Larson]

What story?

Decreasing demand has made it difficult for gasoline wholesalers to pass along their increased cost because they are starting to have too much supply on hand.

BTW- refinery profits have been slipping. they need to make money to stay in business like everyone else.

It's also very likely that Bushes tougher talk on more drilling and the Democrats starting to wiggle a bit is having an affect along with the decreased demand.

[klott]

sorry, I forgot to ad the link. Go back now.

[Michael Larson]

For those who remain convinced that increasing supply has little effect on prices.


In the last decade, Republicans sent President Clinton a bill to drill for more domestic oil to make us less dependent on foreign product. We would be producing a lot more oil, and prices would be lower if it had become law, but Clinton vetoed it, and that's why we are in the mess we're in now.

Actually, it's another left-wing lie that passing a drilling bill now would have no effect on today's oil prices. Just the act of declaring a pro-production oil and gas policy would "send a message to the market and result in lower prices for oil and gas," John McCain is telling voters on the stump.

International oil traders bet on what the world's supplies will be in the future because supply determines price.

Increasing oil exploration and production will drive future prices down. We saw an example of that this last week when crude oil prices on the New York Mercantile Exchange fell sharply by about $11 a barrel in two days after the Energy Department reported that commercial petroleum stocks rose the previous week. More

[klott]

You're right Michael, the speculators buy and sell futures on contracts in the future, which is why they are called futures, so in other words, they are betting on how the market will be in the future. Bush says we will allow drilling, and the prices immediately fell, because it would be foolish to bet on high prices, if there is more supply and less demand. Back when Congress, voted against drilling, the prices went up immediately, because congress sent the message that nothing is going to be done, so go ahead and charge whatever you like.

[Michael Larson]

That's how the futures market works.

Contract holders are making a "bet" on the future and being without a crystal ball, they trade and price the commodity on available news and projections.

news of future constricted supply and/or increased demand=price up

news of future increasing supply and/or decreasing demand = price down

[Doug Edwards, CMI]

They used to teach all of this in 10th grade Economics. I do not know what they teach today.