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Automotive News & Views How does gas at $4 and higher impact you?
2183 messages, Last post on Nov 21, 2009 at 5:13 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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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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Oil down $4 today. I like it.
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Replying to: oldfarmer50 (Nov 03, 2008 4:45 pm) a family member even drove their nissan armada over to visit for a while over the weekend. 
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Replying to: kernick (Nov 03, 2008 1:43 pm) No commodities traders get involved, everyone isn't paying $1 per board-foot today and $10 tomorrow, it just works like the sale of anything else.
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