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The road blocks to bringing diesels to the US market are numerous and costly. Diesel used to sell at a discount to regular and now it sells at a premium to premium. It's an organized scam. We may not be a part of OPEC but our oil boys sure know how to hedge the market against those looking to reduce fuel consumption and save some money. Interestingly this problem didn't exist before the current administration that has put the majority of Americans into negative household income growth took office.
No, diesel is more expensive now because it faces more of a pinch in refining than gasoline does. Refiners aren't simply able to switch production capacity back and forth between the two at the drop of a hat. Demand for diesel fuel has exploded, particularly in Asia over the last eight years. That's why it sells at a premium.
The additional taxes on diesel fuel don't help matters either.
Last edited by StoneOne; 09-09-2008 at 09:25 AM..
Reason: typo: aren't able!!
No, diesel is more expensive now because it faces more of a pinch in refining than gasoline does. Refiners are simply able to switch production capacity back and forth between the two at the drop of a hat. Demand for diesel fuel has exploded, particularly in Asia over the last eight years. That's why it sells at a premium.
The additional taxes on diesel fuel don't help matters either.
This is true as far as it goes...the good ole concept of supply and demand. This long time concept has effectively kept hidden the root cause of higher prices.....GREED!
Greed is ALWAYS the real cause of higher prices. As demand rises, prices do not HAVE to be increased. They are only increased because they CAN be increased. The producers/manufactures will unconscioulsy ( if not consciously ) raise the price to the highest level thay can get away with. I'm not judging this as good or bad. But that's the way it is! The only time I like it is when I'm able to raise the price of my product or service due to greater demand. Like everyone else, I'm subject to the greed factor, and I want the greatest return for my efforts.
No, diesel is more expensive now because it faces more of a pinch in refining than gasoline does. Refiners are simply able to switch production capacity back and forth between the two at the drop of a hat. Demand for diesel fuel has exploded, particularly in Asia over the last eight years. That's why it sells at a premium.
The additional taxes on diesel fuel don't help matters either.
This is true as far as it goes...the good ole concept of supply and demand. This long time concept has effectively kept hidden the root cause of higher prices.....GREED!
Greed is ALWAYS the real cause of higher prices. As demand rises, prices do not HAVE to be increased. They are only increased because they CAN be increased. The producers/manufactures will unconscioulsy ( if not consciously ) raise the price to the highest level thay can get away with. I'm not judging this as good or bad. But that's the way it is! The only time I like it is when I'm able to raise the price of my product or service due to greater demand. Like everyone else, I'm subject to the greed factor, and I want the greatest return for my efforts.
True, but one could also take the view that the price of diesel right now is the absolute lowest possible that ensures adequate supply to meet current demand. If the price were any lower, there would likely be shortages.
[/indent]This is true as far as it goes...the good ole concept of supply and demand. This long time concept has effectively kept hidden the root cause of higher prices.....GREED!
Greed is ALWAYS the real cause of higher prices. As demand rises, prices do not HAVE to be increased. They are only increased because they CAN be increased. The producers/manufactures will unconscioulsy ( if not consciously ) raise the price to the highest level thay can get away with.
We tend to match on a lot, but this is really not how the commodities market work. It is the buyer who sets the price. You know the mock saying of the Golden Rule -- He who has the gold (money as it were -- the buyer in this case) sets the price by buying and bidding it higher. Just like an auction.
It does not matter whether we are talking Pork Bellies, Crude Oil, or Soybeans, the producer(s) acting alone have little to no control on the price. Unless the suppliers were to en masse intentionally withhold production (a very risky strategy to raise prices) or dump extra product on the market (again a very risky strategy to lower prices), a commodity producer has no means of control of the price. But even the with-holding and dumping are very short lived events.
All the way the price run-up the We the Morons kept buying the stuff and running our own price up. It is really LOOK IN THE MIRROR time on all of this. Finally, this Summer, the Drive to Drive has taken a break and our driving and demand reduced -- but only a little.
Quote:
I'm not judging this as good or bad. But that's the way it is! The only time I like it is when I'm able to raise the price of my product or service due to greater demand. Like everyone else, I'm subject to the greed factor, and I want the greatest return for my efforts.
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I used to grow Corn, Wheat and Soybeans -- all commodity markets, like Oil. Like all commodity producers I had no control of my price, just maybe I could get lucky and sell in advance (futures market, a "short" or sell position) and get a good price, or get very good weather and get a larger crop (meaning larger income) -- those were the only paths for more money, no matter how greedy I may be.
Now I am more along the lines you are speaking towards -- a Design/Engineer/Build Contractor -- no commodity market there -- and I just make up my prices. Often I do not even have to present the lowest price to get the project. But that is a very different world than being a commodity producer.
No, diesel is more expensive now because it faces more of a pinch in refining than gasoline does. Refiners are simply able to switch production capacity back and forth between the two at the drop of a hat. Demand for diesel fuel has exploded, particularly in Asia over the last eight years. That's why it sells at a premium.
The additional taxes on diesel fuel don't help matters either.
This is true as far as it goes...the good ole concept of supply and demand. This long time concept has effectively kept hidden the root cause of higher prices.....GREED!
Greed is ALWAYS the real cause of higher prices. As demand rises, prices do not HAVE to be increased. They are only increased because they CAN be increased. The producers/manufactures will unconscioulsy ( if not consciously ) raise the price to the highest level thay can get away with. I'm not judging this as good or bad. But that's the way it is! The only time I like it is when I'm able to raise the price of my product or service due to greater demand. Like everyone else, I'm subject to the greed factor, and I want the greatest return for my efforts.
Supply and demand trumps greed as it factors in both sides and competition.
I'd love to be greedy and sell my Toyota Corrolla for 50,000 but thats not happening.
Let's not forget the collusive interests of the oil suppliers. OPEC puts the floor on oil prices that has little to do with abundance of supply but has everything to do with the minimum level of revenue they are willing to accept without sparking and international outrage.
Let's not forget the collusive interests of the oil suppliers. OPEC puts the floor on oil prices that has little to do with abundance of supply but has everything to do with the minimum level of revenue they are willing to accept without sparking and international outrage.
No, again, it's demand.
Saudia Arabia is widely known as the OPEC member that favors the lowest oil prices. A key Saudi official said recently - I believe in August or September - that the ideal price of oil is somewhere around $78 per barrel. The Iranians and the Venezuelans were screaming when it started approaching $100.
Regardless of the OPEC floor of $78 or $100 or whatever, it doesn't matter. They simply cannot keep oil prices high. Only those who consume it or speculate on it can. Something tells me that OPEC and Russia didn't really like the low prices in the late 1990s - unless you consider political unrest and default as being positive responses to the market.
Talking heads are now saying oil could fall to $20/bbl, which would translate into $1 gas at the pump. Of course they said this in 2006 when the oil price fell to $50 from $78 also, so who knows what will really happen. I hope it bottoms out about $50...which would help spur consumer spending. I think $20/bbl would be bad for our economy in that it would destroy the progress we have made towards alternative energy as well as cut out alot of those jobs.
Talking heads are now saying oil could fall to $20/bbl, which would translate into $1 gas at the pump. Of course they said this in 2006 when the oil price fell to $50 from $78 also, so who knows what will really happen. I hope it bottoms out about $50...which would help spur consumer spending. I think $20/bbl would be bad for our economy in that it would destroy the progress we have made towards alternative energy as well as cut out alot of those jobs.
Nobody knows. I wouldn't worry about where it goes, actually. $20 oil won't destroy progress toward alternatives. It will simply delay wider adoption. The knowledge that's already been gained and the technology created thus far isn't going to disappear into thin air. The absolute worst thing that can happen is that we have another price spike and people get burned like they did this last summer. Sooner or later, alternatives will take over for primary transport fuel.
Wherever it ends up, we have now proven the $150 per barrel it topped out at, was pure manipulation and speculative buying. I know the theory is that due to wor;d wide economic crash and slowdown, demand will be down, but come on! I heard reports of $20-$35 per barrel also. Good thing I kept me big fat SUV and travel trailer to tow it with. Might be fun to use it again soon enough!
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