Something is fishy

[delta13soultaker]

Leading up to this last election, gasoline prices we steadily rising.

On the East Coast, gas prices were back up to the prices just after hurricane Katrina. (pushing $4 a gallon)(3 years ago)

The day after the election, gas prices started falling.

Gas pricess where I live have been as low as $1.55 a gallon.

Everyone knows that the Liberal Democratic party was counting on votes from the middle-class and below. One must wonder, when looking at the total picture, if we were being squeezed into thinking with our checking account.

Anyone else notice this?

[Bruce FLinch]

It's down to $1.79 here. I read the other day, one of the Saudi Oil bigwigs was calling to raise the barrel price to $79. We are living in interesting times for sure...

[armedandsafe]

Yes, I noticed it, but didn't pay any attention to it. I expected it and my expectations were confirmed.

I just don't understand how people in the business community can be so shortsighted as to support Socialist plans of elected leaders.

Pops

[300 H&H]

The answer you seek lies in the value of the dollar. It has been raising fast since the July lows were set. Best regards Kirk

[Vladimir]

Originally Posted by 300 H&H

The answer you seek lies in the value of the dollar. It has been raising fast since the July lows were set. Best regards Kirk

+1

The dollar is on a comeback or something like that from what I have seen/heard .

[Pistolenschutze]

Yup, I noticed it too, Delta, and like Pops, it did not surprise me one iota.

[bogus bill]

Well, it worked to durn good! We already were in trouble with the easy credit. Then gas went out of sight, people quit buying the gas guzzlers, got the auto makers scared, and said without help they are going bankrupt and needed a bailout too! The oil price fell when people quit driveing, obama was elected and now the prices are low.
Funny how all the sudden you dont hear about the energy crisis now that gas dropped back! You dont really think it is going to stay at $1.55 do you?
Some belive the oil crisis triggered all the trouble. It does look like it started a lot of it. How many people bought large suv,s that couldnt afford them to start with, then the gas went up to where it took half a paycheck to get to work, then let them be reproed? I once read that in politics NOTHING is by accident!

[USMC-03]

Isn't it obvious? With the mere election of B.O. the economy has seen the light and agreed to refrain from making these obscene windfall profits. Hope and change we can believe in!

Now, if you'll all excuse me, I have a funny fruit punch taste in my mouth that won't go away...

[delta13soultaker]

Originally Posted by bogus bill

I once read that in politics NOTHING is by accident!

Absolutely.

A liberal democrat president risked the lives of USAF pilots in 1998 to strike mobile air defense artillery (ADA) systems in the Iraqi desert. ADA that had been there for years, doing the same job for years. There was no pressing reason to risk attacking that ADA between 1992 and 1998. But when that liberal president was all over the news because he was getting bj's from a fat intern in the Oval Office, all of a sudden those ADA systems were a reason for acts of war on our part. It was a distraction that worked up to a point....it got coverage at the time.

Our country is one so comfortable that people can be convinced, are willing to believe, that the Kennedy assassinations were random events.

[LDBennett]

Its all about supply and demand.

The world was cooking right along with China and India running full speed ahead. Then we had the little financial crisis and our financial market fell big time. Unfortunately the rest of the world's economy is tied to ours since they have been buying US equities and those worthless real estate loan packages. The rest of the world was more precarious financially then us and were hurt worse than us. So the demand for fuel drastically reduced both here and around the world. Lots of supply and no demand and the prices go down. That's where we are today. Once the world economies ramp up again, the supply again will be low and the prices will shoot up again. OPEC may force the prices up with reduced production (less supply) to force the prices to where they want them (about $75 a barrel is where OPEC thinks they want it).

If we ever get off oil from abroad and replace it with natural gass, electric cars from coal fired electric generatiors or whatever technology brings us, then we may no longer be at the mercy of the OPEC countries. But I really don't see it happening anytime soon. No one wants to make the commitment for the expensive alternative fuels when oil is so cheap as it is now.


LDBennett

[delta13soultaker]

Sounds good.

Never thought I'd say, "Let's go all nuclear power and drive in electric cars". But here I am thinking it.

If we dropped oil as a fuel today, in our lifetime most of the Middle East elite would be back to living in tents and herding camels.

[bountyh]

Originally Posted by delta13soultaker

Leading up to this last election, gasoline prices we steadily rising.

On the East Coast, gas prices were back up to the prices just after hurricane Katrina. (pushing $4 a gallon)(3 years ago)

The day after the election, gas prices started falling.

Gas pricess where I live have been as low as $1.55 a gallon.

Everyone knows that the Liberal Democratic party was counting on votes from the middle-class and below. One must wonder, when looking at the total picture, if we were being squeezed into thinking with our checking account.

Anyone else notice this?

You can thank the new liberal democratic president for the fall in prices. I predicted that gas would fall going up to election day so that Big Oil could take away that issue and the repubs could claim that they were "on the right track". If McCain had been elected, gas prices would have started going right back up.

The democrats openly accused Big Oil of price fixing and gouging (which is true) and said they plan to cut off the corporate welfare that Big Oil receives courtesy of taxpayer money. Gas prices will stay in the $2 - 3 range in the near future to prevent congress from either cutting off their tax welfare or imposing windfall profits taxes, both of which they have threatened to do before.

[bountyh]

Originally Posted by LDBennett

Its all about supply and demand.

That exists only in a free market system, which gasoline is not. Big Oil has what is called a "horizontal monopoly" at the refinery level which means there is no free market competition. You can not set up your own gas business because you have no way to refine it.

Compare to other actual competitive industries and you will see they constantly seek to increase production efficiency, reduce per unit cost to allow them to lower prices and take market share from their competitors. Big Oil does NOT increase refinery efficiency, output, or make any effort to increase refinery capacity because they want to keep the system as staus quo. It's no coincidence that gas prices all rise and fall in unison. It is a monopoly which is both protected and subsidized by the government.

[obxned]

The offshore drilling ban expired. You never heard this from the news media, but it is the main reason gas prices fell so sharply. Before a drop of oil was produced!

Just don't get used to reasonably priced gas: we'll either get hit with insane taxes on it or a new ban, or both.

[bountyh]

Originally Posted by obxned

The offshore drilling ban expired. You never heard this from the news media, but it is the main reason gas prices fell so sharply. Before a drop of oil was produced!.

You can't be serious: gas prices are down because of several reaons:

1) The country is in the worst recession in 80 years and Big Oil got a black eye with the public posting OBSCENE (and record breaking) profits they made off the backs of working stiffs who in large numbers are going broke and losing their homes. Big Oil has a major PR problem and they are laying low for a while. They could have lowered domestic prices a click to give people a break, but they gouged all the way to the bone.

2) They want to take the steam out of the drive to get congress to change the laws regarding their taxpayer subsidies, and facing a democratic admin, they know it could happen.

3) As far as dropping prices for undrilled oil? Oil is only one of many excuses they use to raise prices. If crude goes up, it's the price of crude causing the rise. If crude goes down, it's refinery output can't keep up with demand. If demand is down, it's the cost of switching over to the midsummer-just-before-september blend formula causing the increased cost. Or, if there are no reasons, it's because China and India have more drivers than a year ago.

The only thing we know for sure, is Big Oil never has a shortage of excuses for raising prices when they decide to. The reasons for lowering prices are extremely rare, but we have two of them in play right now: public anger at a level so high they may change from gas guzzling cars and a new admin who just might make good on cutting back on the government welfare.

[ponycar17]

Originally Posted by bountyh

You can't be serious: gas prices are down because of several reaons:

1) The country is in the worst recession in 80 years and Big Oil got a black eye with the public posting OBSCENE (and record breaking) profits they made off the backs of working stiffs who in large numbers are going broke and losing their homes. Big Oil has a major PR problem and they are laying low for a while. They could have lowered domestic prices a click to give people a break, but they gouged all the way to the bone.

2) They want to take the steam out of the drive to get congress to change the laws regarding their taxpayer subsidies, and facing a democratic admin, they know it could happen.

3) As far as dropping prices for undrilled oil? Oil is only one of many excuses they use to raise prices. If crude goes up, it's the price of crude causing the rise. If crude goes down, it's refinery output can't keep up with demand. If demand is down, it's the cost of switching over to the midsummer-just-before-september blend formula causing the increased cost. Or, if there are no reasons, it's because China and India have more drivers than a year ago.

The only thing we know for sure, is Big Oil never has a shortage of excuses for raising prices when they decide to. The reasons for lowering prices are extremely rare, but we have two of them in play right now: public anger at a level so high they may change from gas guzzling cars and a new admin who just might make good on cutting back on the government welfare.

Bountyh, welcome to the forum!

I'm going to have to disagree with you on the 'big oil' bogeyman theory. There are more factors at work than 'big oil' sticking it to us...

Following just the President's announcement that he would allow the executive order on offshore drilling to expire, the price of oil dropped around $14/barrel in the following few days. That's even before congress lifted the ban, whereupon the price has continued to fall amid concern that the US could boost the oil supply.

Exploration in the Outer Continental Shelf will likely lead to greater than anticipated yields. Historically, estimates of total recoverable reserves in a given field are low, and advances in drilling and recovery techniques will almost certainly increase the expected yields from offshore drilling. That oil will eventually hit the world market, some estimates run as little as three years, increasing overall supplies and lowering the price of a barrel of oil. Oil prices have been on a steady decline since mid-July, interrupted only by Hurricane Gustav and the financial turmoil of the last two weeks, when President Bush lifted the Executive branch ban on offshore drilling. Oil prices ended the day at $102 per barrel, up slightly recently. But that price represents a 31 percent drop from the record high of over $147 a barrel set on July 11th, four days before the president lifted the Executive ban.

From http://news.aol.com/political-machin...g-ban-expires/

July 17, 2008 4:00 AM

Drilling in the Offshore
Unleashing the oil companies.

By Mark Hemingway

After trading at a record high of $147 a barrel Friday, the price of oil saw its largest one-day drop since the 2003 beginning of the Iraq war on Tuesday, falling $6.44 a barrel. Wednesday, it fell another $3.71, to $135.03, and at one point was trading as low as $132.

From http://article.nationalreview.com/?q...VhZWUwZjQ0ZTk=

The Big Oil bogeyman you're referring to, I assume, is the oil industry in the United States. The big oil industry in the US charges a markup to refine the crude they receive primarily from OPEC countries. OPEC is partially controlling the market price of most of the oil the world uses, and not the 'big oil' you speak of for the most part. The oil refiners in the US, such as Exxon, are making profit margins of only around 7% after purchasing crude from the middle east and other sources who do not care about American perception or public relations regarding their prices. Some US companies would be worried operating only at a 7% profit margin.

On the margin. The oil industry urges people to look beyond its profits to its profit margin: about 7.6 percent of revenues late last year. That's not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales.

From http://www.usnews.com/articles/busin...-windfall.html

We can blame OPEC and market speculators who drove up the price of crude, all along assuming that the global demand for oil was truly inelastic (that we would pay whatever price was asked). Unfortunately for the speculators, they found out that demand for oil is not truly inelastic as our demand started falling as oil prices reached $147/barrel.

OPEC tried to cut production in September to create a bump in prices but the result backfired as prices dropped the same day. What OPEC found out is that this is NOT a true supply/demand situation with regard to rampantly rising oil prices. The same speculators who assumed the world was very thirsty for new oil as emerging markets grew suddenly decided that the demand wasn't as thirsty as they had predicted.

And then there's the issue of the global economy and its impact on both the speculative oil price in the future as well as today's demand...

http://www.foxnews.com/story/0,2933,443603,00.html

Then, you'll have what 300 referred to above with the rising value of the US dollar as we're faring the poor economic times much better than the rest of the world.

The US dollar has risen in value from $1.5x USD/Euro over the past few months to 1.27 USD/Euro in this economic downturn. That affects the price of oil that we're able to import. In other words, we're able to buy more for the same amount of money.

There are a TON of factors that have contributed to this situation but as the price of oil has decreased by approximately 70% and the price of gasoline by nearly the same amount you cannot blame global demand decreases. After all, it's laughable to think that global demand decreased 70% in a few months... We know that hasn't happened.

Also, the theory that US oil companies are causing this is a bit funny, considering that their profit margins have remained nearly constant through this price tidal wave.

That's my thoughts on it, whether they're important to anyone else or not...