What are the gas prices where you live?
- Thread starter Rasikajay
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RedDaemon
10 Year Member
tank_567
Active Member
Raleigh Nc.
JERRYS04GT
New Member
The issue isn't that there isn't enough oil. It's that so many people are willing to pay so much for it.
The last time gas got over $4, it was from institutional investors speculating in the market with out-sized chunks of capital. This is the same thing. It's not a supply issue at all.
And let's say you did build a bunch of oil rigs in Alaska over the weekend. What are you going to do the next time prices go up?
You can't "stabilize demand" when you have countries like China that essentially have bottomless government pockets to buy up whatever they need at whatever the price happens to be. And institutional investors with access to unreal sums of money are buying up oil contracts, thereby monopolizing the supply, then refusing to sell until they find a buyer willing to pay a premium. These people are manipulating the market for their own profit, and will continue to do so until people come up with a better idea than "Drill in the Arctic!!!!111OMGLOL"
What's happening would be like you and your friends buying all the gas stations in town and raising the price by a buck overnight. Only unlike your town, we all can't just go to the next planet to fill our cars.
JERRYS04GT
New Member
LOL.
Once you get there, go to the Salty Dog in Homer. You'll quickly forget all us hopeless in the lower 48 and go native
But bring your car. You'll be a local hero.
Being a business major I completely understand what you are saying. Supply and demand also elastic and inelastic... blah, blah, blah. Fact is we can control the price of oil better when we produce and refine our own oil and therefore we can lower the demand from other countries if they see we are not dependent on their oil.
PULMEOVR
I need a bigger E-Penis.
Ya, miscalculation I guess. It's 1.23/litre here now. Thats about $4.65/gallon US.
That's naive.
Oil is traded on a global market regardless of where it is sourced. We already have control over our own production and yet it doesn't convey control over the global market. Controlling a marginally greater portion of the production hardly conveys total control over the global market.
Considering you haven't graduated yet, you should pay especial attention to the events of your time and how they *really* match what your professors are teaching. There was a time when global economic crashes happened once a generation. For the last 10-11 years they've been happening every few years. Either someone graduated a crop of incompetent economists, or economies don't work the way they teach you in school. Same difference, IMHO.
I am not saying I know it all, but drilling for oil in the Arctic won't change the price of oil because for the last ten years it hasn't been driven by demand. I know for a fact that over the last three months regular has gone up by $1 and I haven't been using more. Globally development has been stalled for more than a year. So how has demand somehow risen so much? Saudi Arabia has committed the capacity to make up for whatever has not been delivered from any countries that have not been able to do so due to inner turmoil, so we know the actual supply of oil is relatively unchanged. We know the demand hasn't increased dramatically. So why is the price going up so drastically?
Traditional supply-demand models do not explain the current rise in oil prices. We know from looking at trading that institutional investment in oil has driven the price up. So why still pretend that producing more oil will lower prices?
A better practice would be limiting the amount of investment allowed by large funds in commodities such as oil. All it takes is one or two large investors buying up a commodity to begin a chain reaction among other fund managers to drive prices beyond supply-demand dictates.
I'm not in favor of government regulation willy-nilly, but we all tolerate speed limits acknowledging a greater good. We all acknowledge bank regulation as a greater good. When are we going to demand our governments ensure a rational price for basic needs such as food and fuel? By "rational" I mean driven by honest supply and demand, not profiteering by large investment funds where the bulk of the profit is made by the managers and commision-paid trader and not the beneficiaries.
I don't get a raise when gas prices go up. Do you? Yet my take-home is diminished when I stop for gas on the way home after getting paid on Friday. I decide whether a job is worth working based on how much I take home. When my actual take-home shrinks based on factors not related to my consumption or taxes or how hard I work I wonder why I'm not preaching to the choir. I can't be the only one.
This isn't a rant. It's a brain-dump. Some people would boil it down to "supply-demand, drill in the Arctic." The slightest bit of observation and research shows it isn't a supply issue, so if we don't need it why drill it? Didn't anyone learn ANYTHING from Exxon or BP? Nothing is without risk. One resource we cannot manufacture is wilderness, and one thing I value more than driving my car is a clean environment.
Kdubslugga
Active Member
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