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Automotive News & Views How does gas at $4 and higher impact you?
2116 messages, Last post on Jul 01, 2009 at 11:51 AM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: oldfarmer50 (Nov 03, 2008 9:55 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 9:08 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 9:10 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 2:12 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 5:45 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 2:43 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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Replying to: nippononly (Nov 03, 2008 9:10 am) " So maybe they should stick to pork bellies. Nobody starves to death when the speculators go on a bidding war for pork bellies. They just switch to chicken (speaking figuratively here). 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. " I knew we could agree! Thanks's for approaching debate honestly and not sticking your head in the sand or sadly refusing to acknowledge. Well right on! Oil was considered intrinsic enough to US national security that we established a strategic petroleum reserve after the '70's so that we could not be held hostage. If you'll check my older posts you'll see I've been consistent. Yet somehow gaming of oil based on a Goldman/Morgan proscribed paradigm was deemed acceptible. Of the nine oil speculation bills put before congress only one had teeth. Rep. John Larson (d) connecticut managed to get someone really in the know to advise him and proposed not increased regulation or a separate comittee with oversight or any of the other destined to fail while absorbing taxpayer dollars solutions but a brilliant concept that would cut to the core. Before anyone would be allowed to buy a futures contract on oil or gas, they must show the ability to accept physical delivery. No taxpayers dollars spent. Goodbye paper traders and hedge funds. At one time speculators made up only 5% of trading and were mostly individuals . Today's hedge funds account for huge multiples of that and have far deeper pockets . Avast! To the soybean pits with you.
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Replying to: duke23 (Nov 03, 2008 8:35 pm)
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Replying to: nippononly (Nov 03, 2008 8:14 pm) And if there's a shortage of timber or a suspected shortage of timber, then Home Depot pays more and raises their prices 50%. On the other hand lobster has dropped to $4.99/Lb due to a recent glut of it. But in a few months it could be $11.99/Lb. With something like oil there is going to be a lot of spikes and drops. I just look at it long-term. and figure sometimes things are good and sometimes things are bad. Figure on an average cost, but leave enough room in your budget for the bad times. |
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