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Automotive News & Views How does gas at $4 and higher impact you?
2175 messages, Last post on Nov 05, 2009 at 3:05 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: steve_ (Nov 02, 2008 8:08 am) " don't see gas pushing $4 a gallon in the next couple of years absent double doses of hurricanes in the refinery zones or other catastrophic events. But I could sure see it settling in at closer to $3 a gallon instead of $2. Anyone got a better crystal ball?" No crystal ball but some insight. Unusually cold winter so lows to be made in 1st quarter '09. Mid to high 40's my guess but it won't stay there. $4.00 gas 27-32 months. That is if we do nothing with the speculators. If by chance we do, much much longer. The fundamental out look is really unchanged, but demand really sucks. jmho.
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Replying to: duke23 (Nov 02, 2008 10:03 pm) So the next time they want to make some profits at everyone else's expense, we will all just have to suck it up and pay those spikey prices for a few months again. And next time I suppose it will be closer to $5 than $4. 
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Replying to: nippononly (Nov 02, 2008 10:39 pm) So if people bidding around the world for the oil being produced doesn't work, what's the alternative? The U.S. government can't set the price. It wouldn't work too well if we demanded $70/barrel oil while the rest of the world was willing to pay $100/barrel. I think this is one of the reasons why financial advisors tell you to keep several months of cash, and don't lead a lifestyle on the financial edge. How many people do you know that supposedly have trouble paying for gas, yet have money for cellphones, $100/month cable-internet bills, go to movies and eat out?
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Replying to: kernick (Nov 03, 2008 7:55 am) Oil is a unique case, one in which there should be no commodities trading, no bidding for contracts. In fact, most energy trading should be the same way. Energy may seem like a market commodity, but in its many forms it is more a necessity of the American lifestyle than it is an option. Imagine the uproar there would be if there was commodity trading and speculation for water.
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Replying to: nippononly (Nov 03, 2008 8:10 am) Hmmm, this link says that the World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) consider water a trade commodity. Careful what you wish for eh? My subdivision is trying to buy water and get off our wells, and we'll buy it from the French if we have to (United Water is an option here). Oil is down a bit this morning and predictions are that it will go down some more due to the weak global economy. OPEC is trying to cut production, but as usual, not all member countries are following along with the cuts.
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Replying to: steve_ (Nov 03, 2008 8:32 am) Where do you live steve, Spain? 
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Replying to: oldfarmer50 (Nov 03, 2008 8:55 am) "Suez has 125 million customers in 40 countries with subsidiaries such as Ondeo and United Water. Their 2002 revenue was €6.4 billion which makes it the largest water corporation in the world." Public Citizen Well water in my neighborhood is marginal and often rusty. So we'll take French water if we can get it, and we'll burn diesel from OPEC if that's what it takes to run the lift station to pump it up the hill. Although if my well dies, I may look into a water catchment system like my friends in Taos have. |
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Replying to: steve_ (Nov 02, 2008 8:08 am) Dramatic drop in oil price in the past 3-4 months has shown it is the speculators playing the futures market (based on economic conditions) that is responsible for lower gas prices, not soley on the supply and demand of the oil itself. Oil use is down around 5% worldwide, yet the price per barrel is down around a whopping 60%. So, any world event or economic trigger could shoot prices back up just as quickly as they have gone down. You've got a lot of individuals, who sold early, laying around with tons of money, waiting for a good investment. So my workman's version of the crystal ball, the 8 Ball, says "TRY AGAIN'". 
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Replying to: nippononly (Nov 03, 2008 8:10 am) Your're saying "what shouldn't be" but not giving a solution. Who would set the price? Do you think the leaders of the 20 or 30 oil producing countries are going to agree (daily?) what the price should be. When Iran wants $150/barrel and the Saudis $75/barrel? ... If oil didn't go to the highest bidder, and those not offering enough didn't get oil, how would the producers determine where to ship the oil? For instance say the producers were able to agree tomorrow to sell oil for $50/barrel. At $50 barrel the demand might be 125M barrels, while only 100M barrels could be produced. Would the producers only ship everyone 4/5 of their order? The markets are there so that the price can vary such that demand = supply. And basically these traders are there to get the customers who are willing to pay the most, the oil they want; yes at the expense of others who then have to cutback. It is an ongoing auction, and we as the customers, by continuing to buy oil/gasoline - set the price at any given time.
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Replying to: jipster (Nov 03, 2008 1:12 pm) And it could go up 60% too. Why? Because of people like you or I. If gas is $2.50/gal or $4.25/gal, as long as we're willing to pay the asking price and not backoff on our consumption then that's what happens. For instance I heat my house with oil, and I drive 5 miles to work each day. Until I decide to turn the thermostat down or bike, the price can go up, but I have not changed usage. If enough people have spare money then this means you can have large price changes when there isn't enough supply. The price may go up 30% just to get people to cut back 1-2%, to make supply = demand. It's not until the price goes up enough that people "blink", and cut demand, then you can have 60% price-swings on relatively little change in use. |
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