Fuel Prices - Supply and Demand

[ThomWV]

It occurred to me this morning that if I want to guess what the price of gasoline will be tomorrow I need to watch the news tonight. The price has ceased to be a function of supply and demand. And how do we know that? Because the price continues to go up at the same time there is no shortage anywhere. Despite the Peak-oil folks claims (which are certainly valid, but probably a bit premature) there's plenty of oil out there for anyone who wants to buy it.

It is speculation in oil futures driven by fear of ever expanding war, not demand exceeding supply, that has driven up the price of oil by 300% during the Bush Presidency. So who supplied the ever expanding war? George himself.

You want to see the price of gas go down? Toss George out of office and get out of Iraq. Do that and you'll see buck and a half gas within a month.

[napi21]

1. Oh I agree with THAT! I listen to the power lunch on CNBC once

in a while, and I've heard the arguments over why the prie at the pump is fluctuating so drasticly. The general thought is that there is no rational explaination and the speculators buy and sell based on their gutt feeling! Any POSSIBLE disruption in supply, like the ongoing battle between Shrub & Chavez, or more fighting in Iraq, or this new mess in Israel & Lebanon causes them to get nervous, and they panic...sending the PPB sky rocketing.

[SensibleAmerican]

2. It's the (bullshit) expectations component of supply and demand

People expect gas prices to go up because of war/terrorism so they pay more for gas today. Otherwise, people could make an arbitrage profit.

Take what I said to go short long term on gasoline futures.

[BlueAlert]

3. The main reason that the price of gas is high..

is because the oil companies want to protect their profits.

[WannaJumpMyScooter]

5. And, duh, two oil men in the top jobs in DC

can't hurt there either, huh?

[MercutioATC]

4. I've been trying to get this point across for months.

You're absolutely correct.

The prices we're seeing right now are not a result of supply and demand, but of speculation.

The current administration has played a major part in fueling these price increases.

[RB TexLa]

6. Speculation is a part of every commodities market

[phylny]

7. You may be right, you may be wrong.

Demand for petroleum products has risen since this time last year.

[fordnut]

8. That is the exact reason for the wars

The only way to get oil to stay over 10.00 a barrel.If we are really using so much oil why haven`t they had to build a new refinery in thirty years.The only time I have seen a station out of gas is when a delivery was late or someone just forgot to order it.I remember before Tricky Dicky had his oil crisis all the stations would pump it for you and at least wash your windshield,try getting service in a station now,guess who we`ve got to blame for this OURSELVES we let this happen and none of us have the BALLS to do anything except just buy more everytime the price goes up and that is exactly what happens,gas prices can fall for a few days people slow buying gas then they raise the price people line like that is the last there is,sort of like abunch of drunks fighting over the last beer.

[sueragingroz]

9. Whatever the reason

I'm all for high oil prices (with rebates to those who have to choose between heating or eating) so long as it encourages the development of alternative energy sources...

I use a gallon a week in gas getting around on my scooter.

[fordnut]

10. The oil companies will find a way to stop it

[nosillies]

11. I wholeheartedly hope that rising prices reduce demand for oil

and increase demand for alternative energy sources.

However, this is the day-to-day reality for many people:

1) car seats don't fit on scooters
2) when your cars are paid for, it's difficult to justify going out and buying a new vehicle in order to gain a few extra miles per gallon
3) public transportation is not readily available and/or safe in many areas of the country
4) overvalued housing in many areas forces lots of workers to live great distances from their workplaces
5) future alternative energy sources, while a noble cause, don't help today when people are standing in the store trying to think of new ways to jazz up beans and rice, or if they can take their meds every other day instead of every day

So far there are few signs of demand for oil slowing down. A lot of people's lives are going to be very adversely impacted while we play this waiting game in hopes of a better future.

[fordnut]

12. I really feel the way you do,but

most everyone thinks that other people will do something so they don`t need to I guess we are all just lazy every one blames others and won`t do anything on thier own.I would like to buy bio-diesel for my truck,but can`t find it my area( my truck makes my living)also checked on buying the equipment to make my own bio-diesel,but I just don`t have the money.

[nosillies]

13. We've done a really easy thing in my neighborhood

Only one person goes to the grocery store and gets stuff on everyone's list. It won't save the world, but it saves a bunch of different families all going to the store when one trip would do.