We're expecting fuel prices to top $1.50/L over the weekend (our long weekend). An increase of $.30/L overnight. Supply and demmand, come on. Must take special powers to pre-determine the demmand before the weekend's even here. Our summer travel plans have just been put in serious jeopardy. At $170.00 a fill, a person can only take so much.
All I can say is feel lucky you are not paying close to the $10,00 a gal mark in Europe. I travel quite a bit on business and still notice that people must not be hurting as much as they claim. They still drive big gas guzzlers with one person in the vehicle and cruise at least 5 over the posted speed limit. When they go to smaller vehicles, and pack three or four people in and drive 5 under the posted speed, that is when I will know people are hurting.
In a recent speech, Sen. Bingaman (US senator, chair of the natural resources and energy committee) talked about energy prices.
In the speech -- a fairly long one -- Bingaman examined the components of pricing. (Like everything else, the price that we see at the pump comes from multiple sources, and each source or component requires examination.)
I think you'll find the speech fairly informative, especially those parts that consider factors outside of supply and demand. Here's a link to the full text of the speech:
I'll take a look at the speech when I have a few minutes to kill, however, I'm sure I won't place much stock in it. Unless the source is independent, it means very little to me. The government is one of the players in this mess, milking it for all it's worth.
Like it or not supply and demand does play into it. We are spoiled in this country by cheap oil. Unfortunately while we have been sitting around the rest of the world has caught up and want the same things we have had. The Chinese aren't content to be riding bikes and pulling rickshaws anymore, they are buying cars. One of the largest car manufacturers in the world is Tata Motors based in India. Indonesia also has a booming car market, etc.
The ironic thing is that when we go to the local store and buy something made in China the money that flows to them is turned around and used to outbid us on the world oil market.
As long as we depend on foreign oil and OPEC doesn't increase production a substantial amount the prices are not going down because the worldwide demand will continue to rise.
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According to a report this morning on CNN (a very similar finding in the Bingaman report I linked to earlier), some 30% to 60% of the price we pay at the pump can now be attributed to speculation in the oil market. The remainder of the cost% can be attributed to supply and demand. (Speculation is defined as folks who buy/sell shares in oil, but who do not themselves consume or use that oil.)
Lynn
eubank wrote: According to a report this morning on CNN (a very similar finding in the Bingaman report I linked to earlier), some 30% to 60% of the price we pay at the pump can now be attributed to speculation in the oil market. The remainder of the cost% can be attributed to supply and demand. (Speculation is defined as folks who buy/sell shares in oil, but who do not themselves consume or use that oil.)
Lynn
Very similar to investors buying up houses and condominiums with no intention of living in them creating a false high demand and the resulting ultra high prices anticipating selling these uninhabited units at the inflated price.
Difference being we're all to willing to pay the artificially inflated price for gas and diesel.
Hannibal wrote: (quoting eubank) Very similar to investors buying up houses and condominiums with no intention of living in them creating a false high demand and the resulting ultra high prices anticipating selling these uninhabited units at the inflated price.
Difference being we're all to willing to pay the artificially inflated price for gas and diesel.
Yes, indeed. It's not as if we could turn to the speculator's competition and buy at a lower price. (I guess the only good news is that Bingaman is trying to focus some attention on the speculative marketplace.)
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