Oil Prices Up--Again!

  • captproton

    Posts: 316

    Jun 02, 2009 8:43 AM GMT
    I have been following the oil market for the past five years and am disgusted that the oil companies can get away with manipulating prices, especially at the retail level.

    It's almost laughable how they can justify higher oil prices by using a grab bag of excuses. One week it's Nigerian rebels threatening to kill oil workers or sabotaging pipelines. The next week it's a drop (even a small one) in emergency stockpiles.

    Now I am reading that everyone in the oil market is counting on a sudden turnaround in the global economy--yeah, that's going to happen in the next six months. It's like these guys traffic in unicorns and rainbows.

    I drove by my local Chevron station tonight and premium has hit $2.99 a gallon. That's three bucks folks. We're now just a buck away from the $4 a gallon we saw last summer. And yet analysts are trying to tell us not to worry because we aren't anywhere near where we were last summer.

    Oh yeah? It's only June 2nd and we're back on this appalling spiral upward in oil prices. I don't believe anyone who tells me we've hit the peak and prices are going to trend downward. I read that today in "USA Today." Nothing to worry about, the experts are saying.

    Well, they were wrong last summer. They were wrong this spring. And they will be wrong this summer, too. We're about to be gouged--again.
  • metta

    Posts: 39139

    Jun 02, 2009 3:54 PM GMT
    ^
    exactly....

    also...cheap oil is more dangerous than expensive oil. It seems to be the only way to get the majority to care enough to push for cleaner alternative technologies.
  • Posted by a hidden member.
    Log in to view his profile

    Jun 02, 2009 4:18 PM GMT
    Lets put some perspective on this

    Last summer I was living in europe and Gas in Dublin was $8 a gallon...In Paris it was over $10 and these aren't premium prices.

    Like it not, Chevron is a private company....it takes a raw product refines it and sells it to an established market at a rate it determines to be competitive in an established free market.

    If they set the price of oil too low it won't be economical to pump and refine it in certain locations, supply will fall and the price will rise, if they set it too high one of the many other distribution companies will offer it cheaper and drive chevron out of business

    The lesson is if you want Gas at the currently most competitive price...Go to Costco icon_neutral.gif
  • Bunjamon

    Posts: 3161

    Jun 02, 2009 4:58 PM GMT
    metta8 said^
    exactly....

    also...cheap oil is more dangerous than expensive oil. It seems to be the only way to get the majority to care enough to push for cleaner alternative technologies.


    Exactly. Sometimes I think I'm the only person who thinks that gas prices should be kept artificially high to get people to curb their consumption, or that extra taxes should be added to fund research for cleaner technologies.
  • Posted by a hidden member.
    Log in to view his profile

    Jun 02, 2009 6:24 PM GMT
    We should also keep in mind that after the 70s, most European countries introduced higher gas taxes to keep prices high. Their high cost isn't really an effect of market forces so much as a government which has prioritized fuel efficiency (and decent city/transport planning) over consumer abundance. In my mind it's a sensible decision.

    The strange thing about gas prices here is that our direct gas taxes are typically much smaller than sales tax. However, that's not to say there aren't hidden costs! More of the actual cost of gasoline gets folded into national income tax, in the form of defense operations and tax subsidies. The military cost turns out to be really hard to estimate, since most military missions are multipurpose and aren't easily amenable to cost breakdown; I've heard estimates from 0.5--65 billion/year.

    MsclDrew: Presuming, of course, the absence of collusion in the industry. icon_smile.gif

    Bit of data for you all to mull over: http://www.iea.org/Textbase/stats/surveys/mps.pdf
  • Posted by a hidden member.
    Log in to view his profile

    Jun 02, 2009 6:27 PM GMT
    So then put the car down and get a bicycle. icon_razz.gif

  • Posted by a hidden member.
    Log in to view his profile

    Jun 02, 2009 6:57 PM GMT
    onethirtyseven saidWe should also keep in mind that after the 70s, most European countries introduced higher gas taxes to keep prices high. Their high cost isn't really an effect of market forces so much as a government which has prioritized fuel efficiency (and decent city/transport planning) over consumer abundance. In my mind it's a sensible decision.

    The strange thing about gas prices here is that our direct gas taxes are typically much smaller than sales tax. However, that's not to say there aren't hidden costs! More of the actual cost of gasoline gets folded into national income tax, in the form of defense operations and tax subsidies. The military cost turns out to be really hard to estimate, since most military missions are multipurpose and aren't easily amenable to cost breakdown; I've heard estimates from 0.5--65 billion/year.

    MsclDrew: Presuming, of course, the absence of collusion in the industry. icon_smile.gif

    Bit of data for you all to mull over: http://www.iea.org/Textbase/stats/surveys/mps.pdf


    There is collusion in the industry I accept that but i also think it's pretty much in check and their influence is small... there are so many interests, the government controlling release of oil supply and gas tax, OPEC and those oil producing outside it, Wall street attempting to profit from anticipating demand, gas producers, gas distributes and individual gas retail it's self not to mention competing energy providers, coal/natural gas/nuclear as well as consumers both industrial and domestic as well as foreign as well as interested parties driving for reduced energy consumption and energy reform

    It's confuses me when people don't connect gas with an over all supply and distribution of energy.

    You also have to view it as an investment...the premium on energy right now both directly pays for and economically drives better development of clean energy technologies as well as establishing the network for our future energy needs. Which will give greater stability in gas prices in the future and hopefully not repeat last years sky rocketing oil prices followed by a fall, followed by the market correction we are seeing now
  • Posted by a hidden member.
    Log in to view his profile

    Jun 02, 2009 6:58 PM GMT
    I'm actually loving that I can get Diesel for less than regular unleaded for my new Jetta (and getting >40mpg, too!).
  • Posted by a hidden member.
    Log in to view his profile

    Jun 03, 2009 3:17 AM GMT
    I agree Drew.

    As for collusion, I was partly referring to OPEC. However, you could also view collective gas/oil lobbying on our energy policy as a form of collusion as well. We're handing over money to the industry either way.