Heres the story from cnbc
http://www.cnbc.com/id/46470567
"Rising oil prices also run the risk of bringing about their own decline. Analysts say at about $4 a gallon, consumers will cut back as much as possible on gasoline purchases. Gasoline use has been in decline, and was already down a surprising 8 percent last week."
So, reading btwn the lines, oil companies will raise their prices as consumers practice conservation. Like mass transit.
Wheres the line for Electric Vehicles start?
This reminds me of when JEA spent a great deal of money urging residents to use less water. Their advertising campagin worked, but then they didn't have enough money, so they just raised rates.
Seems like a profitable strategy either way. Heads, then win, tails, they win as well and ours pockets have less change jingling around.
Quote from: chipwich on February 22, 2012, 10:38:20 AM
This reminds me of when JEA spent a great deal of money urging residents to use less water. Their advertising campagin worked, but then they didn't have enough money, so they just raised rates.
Seems like a profitable strategy either way. Heads, then win, tails, they win as well and ours pockets have less change jingling around.
Exactly, first thing that came to my mind, too!
I think you may be misreading the article.
Decreased demand for oil (conservation) will drag prices down.
Increased demand for oil (consumption) will push prices up.
Quote from: jerry cornwell on February 22, 2012, 11:46:31 AM
Quote from: chipwich on February 22, 2012, 10:38:20 AM
This reminds me of when JEA spent a great deal of money urging residents to use less water. Their advertising campagin worked, but then they didn't have enough money, so they just raised rates.
Seems like a profitable strategy either way. Heads, then win, tails, they win as well and ours pockets have less change jingling around.
Exactly, first thing that came to my mind, too!
Well, there are other benefits to reducing water usage beyond saving individuals money. It's probably a similar situation with oil.
Quote from: KenFSU on February 22, 2012, 01:08:09 PM
I think you may be misreading the article.
Decreased demand for oil (conservation) will drag prices down.
Increased demand for oil (consumption) will push prices up.
I understand the article. However, if you follow the Weekly DOE reports, you can clearly see our oil national oil consumption is at decade lows. Current daily oil consumption last week was at 18.3 million barrels/day.
GAsoline consumption is 6-8% below last year's levels and at levels not seen since fall of 2001. All things being equal, oil and gas should be cheaper. They just aren't. As people are driving less and becoming more efficient, refiners are closing since it is no longer profitable to keep refining since finished product demand is so low, yet crude prices remain high.
Overall I am happy we are conserving. Its better for the environment and helps extend the production curve of of oil (which we cannot live without). However, conservation doesn't mean we're not getting raked over the coals a little. Gas prices over $4/gallon are crippling for the economy. So unless you car efficiency outpaced the percentage increase in gas prices this year, then reduced oil consumption is just not working in your favor.
At this point, it would take a glocal recession (including the East Asian economies) to really briong worldwide oil consumption so low that we would relaize lower oil prices.
The auto boom in China is just getting started and they already buy more cars than the US. Get used to $4+ per gallon gasoline. It's going to be the new normal.
agreed...in fact $4 won't be the new normal....$4 is going to look cheap
QuoteGas prices over $4/gallon are crippling for the economy.
What happens at $5 per gallon as many are predicting? Never thought I would see a fare to Atlanta 60 days out being almost $250 round trip. And with $5 fuel coming, it will be $300 by summer.
Good time to own oil stocks though. Obama getting tough with oil is such a joke. Maybe the oil pipeline issue will come back to be an issue for him. What happens if the Gulf gets a few storms in it this year? Ouch!
does anyone realize the U.S. is more oil "independent" now than at any time in the last 20 years
Quotedoes anyone realize the U.S. is more oil "independent" now than at any time in the last 20 years
Do you realize we are more of a global economy than we were 20 years ago, and its only going to get worse! China sneezes and its boogers for the entire world.
agreed....I'm just saying that for the first time, more than 50% of the oil we used was produced here.
Quote from: tufsu1 on February 22, 2012, 03:29:46 PM
does anyone realize the U.S. is more oil "independent" now than at any time in the last 20 years
Thanks to President Obama!
he took steps to increase domestic production capacity back when GWB was in office.
Good one, Mr Obama!
Snarkiness aside, Consumption ≠ Demand.
Secondly and perhaps more importantly, One might consider whether the value of oil has gone up in real terms, or if the value of Federal Reserve Notes (petrodollars) has gone down. (Again, in REAL terms)
Likely speculative and political factors are big contributors any price change up or down right now.
Quote from: buckethead on February 23, 2012, 07:43:18 AM
Snarkiness aside, Consumption ≠ Demand.
and supply also does not equal demand
Fact is worldwide demand has generally been on the increase (thanks India and China)....meanwhile supply can't keep up....even the big oil companies will tell you that we are reaching a tipping point on supply, where they won't be abelt to extract, refine, and distribute anymore than they already are.....and we all know what happens when demand outpaces supply.
Quote from: JeffreyS on February 23, 2012, 07:57:56 AM
Likely speculative and political factors are big contributors any price change up or down right now.
Thats what I believe. I heard a comment that prices will rise here because the economy is in a better nature, so consumers cantake it.
Quote from: buckethead on February 23, 2012, 07:43:18 AM
Thanks to President Obama!
he took steps to increase domestic production capacity back when GWB was in office.
Good one, Mr Obama!
Snarkiness aside, Consumption ≠ Demand.
Secondly and perhaps more importantly, One might consider whether the value of oil has gone up in real terms, or if the value of Federal Reserve Notes (petrodollars) has gone down. (Again, in REAL terms)
If gas prices go very high, the president will lose the election.
Yes he might because he has been so consistent that we should rely on oil till the last drop no alternatives. Wait I don't think the Democrats are the ones who have been preaching that we can drill our way out of this mess. You are still right about how Joe six pack will react when it costs a fortune to fill up the Monster truck to drive to work by himself.
Confession I often drive my F150 from Middleburg to my office in Murry Hill.
While we whine about $4, in Europe they are paying the equivalent of $8 and the economies of the Scandinavian countries and Germany are doing fine.
Hint: They don't drive pickup trucks or drive to work.
They use high taxes on fuel to build and support fantastic public transportation systems.
Quote from: Dog Walker on February 24, 2012, 08:05:12 AM
While we whine about $4, in Europe they are paying the equivalent of $8 and the economies of the Scandinavian countries and Germany are doing fine.
Hint: They don't drive pickup trucks or drive to work.
They use high taxes on fuel to build and support fantastic public transportation systems.
I like where you are going with this however prices going up too fast causes lots of hardships. I did love backpacking Europe from train to train taking you places where pedestrians are welcome.
Quote from: jerry cornwell on February 23, 2012, 10:51:55 AM
If gas prices go very high, the president will lose the election.
why....because we shouldn't let markets do for themselves and instead encourage government intervention?
maybe he will tap the strategic reserve again... like last year... >:(
http://www.forbes.com/sites/energysource/2011/06/23/obama-taps-strategic-petroleum-reserve-without-good-reason/
Quote from: buckethead on February 23, 2012, 07:43:18 AM
Secondly and perhaps more importantly, One might consider whether the value of oil has gone up in real terms, or if the value of Federal Reserve Notes (petrodollars) has gone down. (Again, in REAL terms)
Bingo.
It now takes literally more than three times as many dollars ($1,779 as of this morning) to buy an ounce of gold as it did in 2005 ($510-$530).
Ouch.
Quote from: Dog Walker on February 24, 2012, 08:05:12 AM
While we whine about $4, in Europe they are paying the equivalent of $8 and the economies of the Scandinavian countries and Germany are doing fine.
Hint: They don't drive pickup trucks or drive to work.
They use high taxes on fuel to build and support fantastic public transportation systems.
They pay around the same base rate we do, their taxes however make up the bulk of the difference.
Take the UK for example:
They pay almost $3.50 in duty taxes on a gallon of gas. VAT is also included, which is 20%, so take that away, and you are near what americans pay.
Germans pay around 3.25$ a gallon in taxes.
Swedens pay around 4$ a gallon in taxes.
Americans pay around $0.50 cents a gallon in federal and state taxes on average. Georgia's is on of the lowest in the country, hence why gas is cheaper there.
A liter of gas in the UK is around $2.15 American (or @ 3.78 liters per gallon means 8$ a gallon), minus duties and VAT, its barely more than what we pay, and would still be under 4$ a gallon.
You want cheap gas? Libya and Venezuela subsidize their gas. Venezuelans pay around 12 cents a gallon US dollars.
Quote from: tufsu1 on February 24, 2012, 09:18:09 AM
Quote from: jerry cornwell on February 23, 2012, 10:51:55 AM
If gas prices go very high, the president will lose the election.
why....because we shouldn't let markets do for themselves and instead encourage government intervention?
The republicans will be able to blame him for it. And voters will believe it.
I believe a real reason for price increases is intense consumption from China ect.
I think that the world has grown really dependent on oil and consumption, though there are more things which use lesser oil, the resources we have still can't keep up with the heavy demand we pose off. I mean, in the process of coming up with something green, there still is the use of fuel. And I would like to think that for something to really be considered green, it should use lesser oil right from the get go.
^Well, its not just oil, but consumption like you said. Our entire economy has been based on consumption & growth, not just with oil/energy, but with debt from mortgages, automobiles, student loans, credit of all forms, etc. It really runs our society now & none of it is real.
Eventually we'll have to stop, but that process would wreck a lot of industry & the economy in general in many ways because we've simply let it go on too long & aren't set up to handle anything different. Which is probably why we've been trying to prop it up for so long & keep the old ways of doing things in the forefront. It won't work for much longer because the breaking point is nearing as everyone's pretty much tapped out, especially the middle class. The poor are poor, so they aren't really contributors anyway. And the rich will likely always be rich. The middle class are really the driving force behind a lot of this stuff & bear the brunt.
But like I said, that will have to end one way or another. Its like a drug abuser that has to face reality & eventually go through detox hell. But the fight with the establishments behind the scenes who don't want that to happen will be a battle for sure.
But its clear that the system isn't working in the interest of the common person. So the Dem vs Rep arguments are stupid in a lot of ways & a way to just distract from the bigger picture. All you guys arguing which team is better are missing the point. Just my opinion, but thats the way I see it.
The other reason for the high price of oil is that the easy oil has been used up. Remember the old movies of "gushers", oil that sprayed up by itself? The oil being extracted now is harder and harder to get at. There is a reason BP was drilling in 5000' of water and why the Canadians are extracting oil from tar sands.
Harder to get at means higher prices. Get used to it.