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Obviously the op is not familiar with basic economics. When the gas prices were high, Americans who could drove less meaning that there was less demand, but supply was stable. This is what caused prices to fall like that. Now supposedly, OPEC is saying they will cut back production starting in January which will cause prices to rise again as long as demand stays at its current level.
The reason gas is down is because dubya has clout with the Saudi Royals and he asked them a couple months ago to increase production. All there has to be is one more barrel of oil than demanded and the price will drop, thats how it works on the margins. Now OPEC is contemplating a reduction in production which will tighten supply at the margin driving prices up. Once Iraq is online the global oil supply should be more comfortable. You will have forgotten the Texas oil man that made it possible by then
Obviously you are not familiar with basic economics, either...!
You just like to blame GWB for everything, but try to make sense.... at least..!
The reason gas is down is because dubya has clout with the Saudi Royals and he asked them a couple months ago to increase production. All there has to be is one more barrel of oil than demanded and the price will drop, thats how it works on the margins. Now OPEC is contemplating a reduction in production which will tighten supply at the margin driving prices up. Once Iraq is online the global oil supply should be more comfortable. You will have forgotten the Texas oil man that made it possible by then
Oh how I truly wish you knew what you were talking about. They told him sorry pal, handed him his hat and he left empty handed. They did not increase production then, nor after 1st summit meeting where world representatives were petitioning them BECAUSE THERE WAS NO SHORTAGE.
The price of oil didn't come down until investigations into finance scandals associated with oil (price gouging) were opening pandora's box. VOILA! Turn on the lights and the roaches ran for cover.
OPEC rightfully blamed speculators for $5 gasoline.
The entire history of oil prices cannot justify outrageous markups like we've witnessed during the Bush admin, but good thing laissez faire is around to make sure minimum wage employees can't get to work because gas costs more than they net.
$3 is what they'll aim for, which is close enough yet far away enough to keep oil as a mainstay and slow down incentives for renewables. It would be foolish to ignore renewables to wait for the next crisis. We need to be ahead of the game next time around (assuming we get out of this 'recession' nosedive unscathed).
Jag man-- Read and know this is the reality of global politics of oil. Not some backyard mechanic who got oil on their hands one day thinking it qualifies them as experts on global industry. FT.com / UK - The low oil price calls for a fresh set of rules
Quote:
If the energy ministers want to stabilise the market they should begin by commissioning a detailed, independent analysis of what went wrong. They should then develop the stabilising mechanisms that would limit the possibility of any repetition of 2008.
The most effective mechanism would be agreement on a broad target range for prices - say, between $50 and $75 a barrel - backed by a strategic stock holding to be augmented or deployed when prices diverged from the range. To support such an agreement trading would be limited to those with a direct physical interest in the market.
VERY WISE SUGGESTION! Fair for businesses doing honest business and locking out the weasels... win win win situation. I heartily applaud.
1. (As someone posted elsewhere) The pushers (OPEC) realized the junkies (US) could'nt afford their drug & were considering quitting the habit. So they lowered the price to keep us strung out.
2. Then - As mentioned - the economy blew up, killing demand and sending the prices down even further.
>Oil prices have collapsed because economic activity has fallen off a cliff thus the demand has decreased sharply. Do you want to credit Obama for that?<
winner
This years price swings show 2 things.
1) What a knife edge oil demand is vs. supply.
2) How much speculators can multiply the variance.
Interesting topic ... as supply is expected to be cut and prices upped the next month ahead of Obama's administration ... so if gas prices go up, I don't expect $3, that is a 100% increase of the current rate but let just say $2.50, what would be the effect on the increasing slumping economy ...
The reason gas is down is because dubya has clout with the Saudi Royals and he asked them a couple months ago to increase production. All there has to be is one more barrel of oil than demanded and the price will drop, thats how it works on the margins. Now OPEC is contemplating a reduction in production which will tighten supply at the margin driving prices up. Once Iraq is online the global oil supply should be more comfortable. You will have forgotten the Texas oil man that made it possible by then
Thanks for making me laugh. Bush is in the pocket of his Saudi "friends" who will no doubt provide for Bush's family for generations to come.
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