confused about oil prices...

[nynor]

the folks in the know are predicting oil at <$25/barrel. it was just at $145/barrel. i understand that the economy is rough (i can't tell much difference personally, it seems that there are just as many people driving cars around...). stuff still has to be shipped and people are still flying in airplanes. is there less oil being used by the military? what gives?

[fingpilot]

In the big cities, there doesn't seem to be much difference in driving (probably because of a lack of alternatives), but in rural and suburban areas, driving miles are down. Good friend delivers gasoline for a distribtor, and his gallons are cut by 40%.

Saw a stat last month on available seats on all airlines out of LAX. 170,000 seats per month down from same time last year. That's a lot of kerosene not being burned.

I would suspect demand spurs price (think that's an axiom in a freemarket economy, which we no longer are, but that's another thread....).

[M.D. Holloway]

what gives is that the folks that burn fuel (consumers) decided that they didn't have to drive as much (5% less) which shot chills down the backs of the greedy oil guys - mass jumping started and before you knew it deals were being done, then more deals and pretty soon the asking price drops in hopes that some sales can be had.

The whole thing is a huge scam...

[nynor]

down 40%.... damn. five months ago i was paying about $4.50 for premium. the other day it was $1.859.

i just flew to hawaii from LAX. my plane, both ways was FULL. down 170,000 passengers seems like a lot, but i wonder what the actual percentage is.


i agree it is a huge scam, driven by a bubble market and shielded by our gov't, perhaps. i guess that 5% globally would be HUGE.

[pwd72s]

Originally Posted by LubeMaster77

what gives is that the folks that burn fuel (consumers) decided that they didn't have to drive as much (5% less) which shot chills down the backs of the greedy oil guys - mass jumping started and before you knew it deals were being done, then more deals and pretty soon the asking price drops in hopes that some sales can be had.

The whole thing is a huge scam...

I think you nailed it...after all, very few folks drive for the pleasure of driving. Once some, like myself, learned to reduce miles driven as they go about their routine, they will hang on to the new driving patterns, irregardless of gas price.

At least I will...it's been quite some time since I considered driving to be fun.

[looneybin]

Originally Posted by nynor

the folks in the know are predicting oil at <$25/barrel. it was just at $145/barrel.

yes, these are the same "experts" that were saying gas was going to be $8.00 per gallon & $250 per bbl

[Rot 911]

I wonder if it has less to do with consumption and more to do with speculators cashing in and moving on.

[widebody911]

Originally Posted by kurt v

i wonder if it has less to do with consumption and more to do with speculators cashing in and moving on.

+1

[Pazuzu]

I don't see 40% reduction in driving around here...I don't think i see 5%! The only time I saw a reduction for for the week after the hurricane.

[M.D. Holloway]

Mike - us in Tejas are put near resession proof. We really don't feel the pain of the rest of the country. Poor democratic fools....

[nynor]

Originally Posted by looneybin

yes, these are the same "experts" that were saying gas was going to be $8.00 per gallon & $250 per bbl

uh... its already down to $45/barrel, and gas prices here are down to about $1.59/gallon for regular unleaded. i can't even remember when gas was that cheap. 2000?

[strupgolf]

It seemed to be not too many years that gas around here was .99/gallon. Maybe 2003/4 ??

[idontknow]

Blame Bush!

[RichMink76]

Wasn't there some regulation put in place recently that stopped Wall Street from speculating the price of oil. I think that is the reason that the prices have come down.

[nynor]

Originally Posted by strupgolf

It seemed to be not too many years that gas around here was .99/gallon. Maybe 2003/4 ??

i don't know where you are, but those were the prices around here when i started driving in 1985. per http://geology.utah.gov/emp/energydata/oildata.htm#prices , prices haven't been below a dollar here, except for a very short time in 1993, since 1989.

[nynor]

Originally Posted by RichMink76

Wasn't there some regulation put in place recently that stopped Wall Street from speculating the price of oil. I think that is the reason that the prices have come down.

i heard some talk, but i don't know what happened. i do know that under reagan speculation on oil pricing was regulated/forbidden in the US.

[sammyg2]

It's all about speculation.
The demand is off a little but not that much. The supply hasn't changed much, the difference between $145 and $45 is the investors who were gobbling up the futures in order to drive the price up further, which they did for a while.

Oil producers ramped up a little overt the last year, demand fell a little, which was enough to convince the investors to go elsewhere. With no speculators around to artificially drive the price up, it fell. It fell so much in fact that is scared everyone away from that market and now it's artificially lower than it should be. It will stabilize at around $75 eventually.
The damger is that the refineries are selling gas significantly cheaper than it costs to make it right now. If that continues, they will start going away. Then when the summer driving season starts up and people increase the demand, there won't be enough capacity to keep up. It takes a long time to re-commission a moth-balled refinery and staff up with qualified people.
Temporary supply shortages, skyrocketing prices, rationing, not what our economy needs.

[dentist90]

The ijuts that tell us to invest into the stock market "for the long run" are the same goofs who always need to make lots of quick money right now and drive the markets up and down like a yo-yo. Buy, hold, prosper. Riiiiiiggghhhht. Repeat after me: Tech bubble. Dot-com bubble. Mortgage bubble. Energy bubble. This is stable investment?? Fark...