Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
No they don't it's those fecking dolts on wall street or wherever the hell they deal in futures and commodities. I wish the oil companies did set the prices
Speculation is part of it, but there's also the not so small matter of rapidly industrializing nations. China now has 240 million cars, up from about 14 million in 1999. India has 70 million cars now and is projected to have as many as 400 million in 20 years. The ramp up of demand for oil over the last 10-15 years has been staggering. Unless those people all of a sudden decide to give up driving, quit their jobs in the city, and go back to the countryside to plow with oxen, gasoline isn't going to get cheaper anytime soon no matter what Wall Street does.
Quote:
Originally Posted by njkate
All I know is gas keeps going up, then down some then up again. Food keeps going up, the only thing not going up to keep pace is my salary
Unfortunately you're also competing with these folks for food-their demand drives the price up. With regard to wages, they're driving them down. Welcome to life in the global economy-sucks, doesn't it?
All I know is gas keeps going up, then down some then up again. Food keeps going up, the only thing not going up to keep pace is my salary
Same here Kate.
I don't understand why cost of living increases aren't mandatory when it's a certainty the price of everything keeps going up!
This January 1st we saw an increase in our taxes, association fee, and day care cost, among other things, yet our salaries stayed stagnant.
It's a damn shame....
Have you ever seen the profits exxonmobil makes?? I know an awful lot goes back into research and exploration but I still think they have plenty of wiggle room to ease up on the public a bit..wishful thinking
now, i know this little piece of information is virtually meaningless except to address someone's equally meaningless and uneducated suggestion. however, since the latter was provided, ill provide the tidbit.
according to the internets, if you divide exxon's profit by the number of gallons of fuel it sold (i believe in 2010), you would have 2 cents per gallon. is that plenty of wiggle room to you?
I still don't know (aside from strong lobbyists) why they get any tax breaks at all. I can't understand how ending this corporate welfare is raising taxes and is "unAmerican."
It's definitely a qunadary in a time when they are bringing in record profits, albeit their profits aren't as amazing when controlled for actual revenue and sales per barrel. Previously the breaks were used to encourage exploration and development of resources. There was a time when these companies weren't making huge profits and incentivizing them to invest in creating new resources made sense. It has been painfully obvious since at least the early "W" years, that those subsidies aren't exactly needed anymore. At current spending rates the subsidies amount to about .003% of the federal budget.
Quote:
Originally Posted by njkate
No they don't it's those fecking dolts on wall street or wherever the hell they deal in futures and commodities
I wish the oil companies did set the prices
There was nothing wrong with the oil commodities market until they opened it up to specualtive investing. Which, just for the record, was done in December 2000 in the twilight months of the Clinton administration. Here's a quick primer on how oil prices worked in the past...
From discovery to 1973 global oil prices were basically set by the major oil companies working in an administered market where they basically all agreed on what the price would be.
When oil supplies became insufficient for demand between 1970 and 1973, OPEC took unilateral action and established a set rate for all OPEC produced oil. This meant that oil companies were no longer setting the prices, but had to pay a fixed price to OPEC.
By 1986 non-OPEC sources of oil had grown to 71% of global supply. As these non-OPEC sources were traded on a relatively loose administered market, it often made their pricing better then OPEC. In response, OPEC, led by Saudi Arabia, ended their price fixing and moved all OPEC oil into the current market-related (aka supply/demand) system. This was quickly followed by all oil producers, establishing the modern market.
Throughout that entire time period and up until December 2000 the market was dominated solely by producers and consumers. People who invested in the market were generally only people who took delivery of crude or finished products. While the market was still susceptible to supply crunches and OPEC's now much more limited whim, it was largely a reality based market.
The floodgates were openend in December 2000 and suddenly tons of money from hedge and mutual funds poured into the market. At first they had little impact. OPEC still exerted nominal control through its price band scheme. OPEC said that if prices fell below $22 for 10 consecutive days, they would cut production. If it rose above $28 for 20 consecutive days, they would increase production. They also stated that they viewed any market sustained above $30 as unrealistic. That was their attempt at providing stability.
The problem was that Wall Street is smart. They had a good feeling that OPEC couldn't actually increase production if prices escalated, meaning there was no nominal control on the market. In 2003 prices crested the $28 mark on fears over investor fears of supply disruptions from the Iraq War. By 2004 prices were sustained above $30, averaging $38 over that year. OPEC was proven powerless to do anything about it and in 2005 abandoned their control scheme. At that point, OPEC had no ability to control the ceiling on prices, but they still retained a nominal ability to drive prices higher by cutting supplies.
From there the speculators, fueled with what is essentially our investment portfolios, dove into oil with a fervor. The basics of the market from 2005-2008 were still driven by supply and demand. The huge increases in 2008 were in fact, all supply based. However, once the supply issues subsided do to decreased demand as the economy entered recession, the market virtually took on a life of its own. Currently, merely the specter of a supply issue is enough to spurn frenzied futures trading which drives up prices as the money runs from current deliveries to futures and back. None of the swings in the oil market post-2009 have had anything to do with the actual supply situation, merely the speculation that supplies may become compromised.
So, what's the solution? That's the tough one. An article on CNN estimates that currently $60-$70 of the price of a barrel of oil is nothing more then speculative trading. That translates to added gasoline expenses of roughly $600-$800 per average American family per year. While that bites hard into our consumer spending based economy, many peoples personal portfolio's are strongly bolstered by oil speculation even if they don't even realize it.
Further, the increased price of a barrel has spurned development into expanding oil production from non-traditional sources and has put the US on the path to being essentially oil indpendent being able to rely solely on US, Canadian and Mexican (collectively North American) production. This creates a tough Catch-22. End speculative trading and prices will decrease, but that in turn will make production of the current non-traditional sources unprofitable. That would lead to job losses in the burgeoning energy sector and ensure that the US will never be North American energy independent. Loss of those sources would also lead to supply disruptions, simply increasing the price back up anyway.
When 'they' asked Bush about gas prices the implication was what he could do to reduce them.
Obama on the other hand does have direct influence over increasing gas prices.
Obama's, 'lip syncing' takes the form of out of control regulatory czars and rules, which bypasss the people's representatives, something Obama blasted the supreme court for in anticipation they would strike down Obamacare.
Gas prices go up as Ogma and friends devalue our dollar.
Gas prices go up as promised by Obama who said his energy plan, yet to be revealed, would necessarily raise energy prices. His energy czar had to walk back his statement that the US needs to get their gasoline prices up to European rates.
And yet you wonder about gas prices rising?
If you look up how much the petro industry pays in taxes you will discover they pretty much fund the federal government.
NPR did a story on the results and interesting look at polling data over the past ten years about gas prices. In 2004 (George W. Bush administration), when asked "What can the President do about gas prices?" Republicans overwhelmingly said "not much," while Democrats overwhelmingly said "a lot." Fast forward six years to 2010 (Obama administration) and guess what? Flip Flop! When asked the exact same question, Republicans responded "a lot," and Democrats responded "not much." As long as crude oil is a globally traded commodity we are going to be at the mercy of price swings. You can forward email chains about "gas outs" and talk conspiracy theories all you want, but in the end you either have to pay up or walk
Pretty much sums it nicely up both politically and realistically.
now, i know this little piece of information is virtually meaningless except to address someone's equally meaningless and uneducated suggestion. however, since the latter was provided, ill provide the tidbit.
according to the internets, if you divide exxon's profit by the number of gallons of fuel it sold (i believe in 2010), you would have 2 cents per gallon. is that plenty of wiggle room to you?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
