Significant Reduction in Petroleum / Gasoline Prices, HOW?

What can you do to make these oil prices reasonable?

  • Take economic action?

    Votes: 12 28.6%

  • Take political action?

    Votes: 3 7.1%

  • Do both?

    Votes: 10 23.8%

  • Do nothing?

    Votes: 17 40.5%
  • Total voters
    42
  • Poll closed .
Another thing is they keep making reference to having raised oil prices as punishment for not allowing drilling in Anwar, up in Alaska.

Anyone else see those bold statements by the defendants of the Oil Administration on CNBC or the other news channels.

This matter of gasoline / diesel prices is much more than just a consumer pain at the pump issue.

This is major!
 
Quote from libertad:

The Bush Cheney oil price premium is being reduced...

http://economictimes.indiatimes.com/articleshow/1539530.cms

The US public has been played........no ifs ...no ands...
More...

The statistics cited in the article are misleading (like most stats).

"He said Opec has increased production by 4.5m barrels per day since ’02, ..."

2002 consumption was 77 Mbpd in 2002 and it's 85 Mbpd in 2006. That's 8 Mbpd increased demand since 2002. OPEC has supplied 4.5 Mbpd. How much has the rest of the world supplied? Probably about 3.5 Mbpd.

"...this year global oil stocks are at five-year highs..."

Absolute oil stocks may be at five-year highs, but stocks as a % of consumption are a different matter. Oil consumption has increased 10% in 4 years. Have inventories increased by 10%? If not, the spread between production and consumption is getting narrower. This can happen even with new absolute highs in inventories.

I'm not saying geopolitics doesn't play a large role as the article attempts to illustrate. I'm saying the above stats are meaningless.
 
The actual market for petroleum between EU and US is quite free and efficient.

The price-at-pump in both countries has significant components of taxes which are entirely uncomparable.

When you take them both out and look at the underlying economic price, the cost is quite similar.

Only differences are due to refining distinctions (local smog regulations and differential input blend costs).

Physical arbitrage between the raw and refined inputs for North America and Europe is quite possible.

Europeans pay more for gasoline, but a large fraction of that money gets recycled back into their own economy, so economically it is different from a truly high fuel price where the anomalous profit would go to producers.
 
I don't understand how "political tensions" can contribute to an elevated petroleum price for so long.

Oil on international markets is settled with physical delivery.

At best, a *change* in expectations of political problems causing supply cutoffs would result in temporarily higher demand and higher accumulation of reserves. Once reserves are at a high enough level that excess above-trend demand would go away.

Given the physically large size of the commodity and known storage and transportation costs and known storage locations and inventories, I don't see any way that oil is anomalously overpriced on average.

I think the true causation is the other way.

We are at the verge of global Peak Oil---and very likely have passed Peak Light Sweet Oil---and that is what causes the international tensions.
 
Excellent Commentary All
.............................................................................

The peak oil and other arguments are good commentary...

What would be interesting would be to back out the Iraq War...Iran nuclear war threats...US war ships off the Venezuela coast....Cheney blasting Russian energy policy...among other Bush Cheney driven events....and then see what the oil price would be...

To just let supply and the other normal refinery arguments etc...price oil would be interesting...

Yeah...quite a few Opec chieftains have argued that US policies have increased tensions and have been causal in higher oil prices...and have placed $5 to $25 per barrel premiums...

If you eliminated causal US policy decisions and also included other arguments regarding sensitivity of demand by income groups outside of the US...oil would be significantly lower...

Also the standard carry trades and sophisticated hedging tactics help augment pricing...And the welfare state oil producers starting to nationalize oil in SA would not be as excited if oil prices were significantly lower...However their very actions further heighten oil prices...

But no doubt...at the end of the day...it is all about consumers ability to pay.....

There is no question that US policies have elevated the price of oil...the real question is....by how much...and for how long...
 
Quote from libertad:

There is no question that US policies have elevated the price of oil...the real question is....by how much...and for how long...
More...

I've already posted this, but it bears repeating:

http://www.iags.org/costofoil.html

According to the above analysis, America's hidden costs are $3.28 per gallon of gas. Assuming a price of $3/gal at the pump, the real price of a gallon of gas is therefore $6.28, which is comparable to what the Europeans pay.
 
Just to be objective it is good to restate this essential conclusion that Economic discussions sometimes overlap the very same discussion points that Political discussions have, just from the economic perspective, not from the party or political perspective.

That statement is meant to cover the areas of being non offensive to the defenders of the Republican Way, as well as to make this thread objective.

Frequently taking sides means paying the "at the pump prices" with pride instead of the natural revulsion that most normalized Americans feel.

CBS movie, The Unit had an expression from the armed services called bohica[/b]. Anyone know what that means?
 
Quote from libertad:

The most intriguing question is why the US Bush Administration is insistent on ... lifting oil prices?.......
More...

hmmmm,

good question.

let's see a overly simplistic reason....

100,000,000,000 gallons of gasoline (100 billion) lasts at least 1.3 months domestic consumption (dc)

DC is defined as:
1) Municipal and Other Governmental fleet usage
2) Maintenance of First Responder fleets (police, fire, Office Emergency Mgmt, etc.)
3) Municial Transportation fleet, both supervisory and passenger, both fleet and factory (power generating plants, for rail lines, etc.)
4) Quasi Governmental Fleets (hospitals, ambulances, support and supervisory vehicles, etc.)

5) General corporate delivery fleets, inclusive of Food Merchants, Grocery Chain and Distributor delivery fleets.

6) General Social Welfare programs (all kinds for all purposes by all kinds of groups, etc.)

7) General public consumers (commuter traffic, leisure traffic, taxi / limosine traffic, etc.)


OK,

100 billion gallons of gas / diesel + $1.79 (average prices during close of Clinton Administration) = baseline price (for arguement sake)

www.gasbuddy.com heat map prices ranging from California $3.45 to Iowa $2.59 times 100 billion gallons

profit estimate at high range = 100 billion dollars times $1.75 (for argument sakes)

$175 billion dollars in profits, not the $4 billion that Exxon Mobil alone reported, or the $10.1 billion that other oil companies reported for just one quarter

what a picture

I took great pains to point out that 6 of the 7 itemized DC's have no voice, so when they mock people on CNBC and say there's no outcry or the pain at the pump isn't so bad, I wonder what these others would say, if they could?

what do you think?

__________________
Two Bear Hunters went Upstate to hunt some bear....
they came across a (road) sign that said: Bear Left,
--- so they went home.....
-------
A Rancher put his Donkey in his pickup truck
--- so could it be said: "he was hauling ass?
-------
A Pharmacist picked up his watch
--- so could it be said he had time on his hands
-----
Two fsih are swimming and run into a wall, the first one says: Blub...Blub...., the other fish says: Dam!
 
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