interesting perspective on the alleged "gas shortage"

[Stephen Edwards]

Here's an article that I read online in Business Week today that sheds some light on why gas prices are so high right now:

http://www.businessweek.com/lifestyle/content/apr2008/bw2008041_945564.htm

Perhaps some of you will find it interesting, as I did.

[Chris Padilla]

Lest we dive into politics, it is difficult to comment on the article but I did find it very interesting yet not one bit surprising.

[Stephen Edwards]

Hey Chris,

Glad you found it interesting. I'm sorta new here at SMC but what little common sense I have led me to believe that this off topic forum would be the appropriate place to post this. If there are any specific rules for what is or isn't allowed in the off topic forum please let me know. Thanks!

[Greg Peterson]

Difficult to parse the political component from the article and still have much of a discussion.

Someone's making out like a champ and no one is the least bit concerned about safe guarding the average person's interests. Free market will settle things out.

[Belinda Barfield]

Hey Chris,

If there are any specific rules for what is or isn't allowed in the off topic forum please let me know. Thanks!

Not trying to step on Chris' toes, but basically, if the thread is in any way political, or can spark a political discussion, it is best left unposted. We tend to be a right opinionated bunch around here, and it makes the Mod's jobs a lot easier if they don't constantly have to police us. :)

[Steve Clardy]

Good article

[Greg Peterson]

We tend to be a right opinionated bunch around here

Cleverly put. :D

[Joe Chritz]

My $.02 - non political.

When people stop paying $3.50 a gallon they will stop charging it.

Supply and demand is only part of the pricing equation. I'm not sure it is something we want big brother sticking his overly large nose in to deep.

Joe

[Jim Becker]

Glad you found it interesting. I'm sorta new here at SMC but what little common sense I have led me to believe that this off topic forum would be the appropriate place to post this. If there are any specific rules for what is or isn't allowed in the off topic forum please let me know. Thanks!

The Terms of Service at SMC prohibit discussion of political issues, religious issues, etc., even in the OT Forum. There is no harm in posting the link to the (very interesting) article, but the tone of the text in that piece is going to be difficult for folks to get around without treading on the political trail. That's pretty much what Chris was referring to.

'Careful folks... ;)

Jim
SMC Moderator

[Stephen Edwards]

The Terms of Service at SMC prohibit discussion of political issues, religious issues, etc., even in the OT Forum. There is no harm in posting the link to the (very interesting) article, but the tone of the text in that piece is going to be difficult for folks to get around without treading on the political trail. That's pretty much what Chris was referring to.

'Careful folks... ;)

Jim
SMC Moderator

I understand and thank you for the heads up on the TOS.

[Greg Funk]

If the author believes that oil prices are artificially high right now, due mainly to speculation, then he should be shorting oil and oil stocks.

It seems that he is looking at oil prices from US perspective only. While the US demand for oil and gas may be flat China and India are steadily increasing demand and that coupled with unrest in the middle east create enough uncertainty to keep prices high.

Oil prices are no different than stock prices; speculators can play a role in amplifying price swings but they can't change the fundamental economics. Long term investments in energy related companies still look attractive to me.

Greg

[Ben Rafael]

What all these so called "experts" seem to never mention is that the dollar's lower value has had a huge effect on gas prices, something like 20%.

[Joe Pelonio]

I just had to gas up and found the cheapest name brand to be $3.63 here, but since I have been driving like there was an egg between my foot and the accelerator pedal, I managed 19.7 on my 4.0 V6 Ranger.

I felt sorry for the guy in the diesel pickup across from me, he had to pay $4.46.

[Chris Padilla]

How many of us are too quick to believe some numbers tossed out in an article? Do you believe any of the numbers you hear about anything anymore? I'm sure 10 different people could come up with 10 significantly different statistics to either support or blast this article or write their own.

What do you believe anymore? Is everyone an expert online?

[Cliff Rohrabacher]

It doesn't help that the largest supplier group ( OPEC) is absolutely immune from price fixing regulations. they can meet and hike costs any time they please.


And of course they can always play with the price of oil to see how much the market will bear.

"Ohh hey guys lets see if the chumps will pay $125.00 this week."

Oh please give me nuclear power.

[Bob Moyer]

Personally, I believe a part of the problem is when the oil companies raised the gas prices significantly after Katrina; and there was a minimal uproar; I believe the beancounters (I am one but not oil related) recognized the profit and we are where we are because of it.

[Lee Schierer]

It seems that he is looking at oil prices from US perspective only. While the US demand for oil and gas may be flat China and India are steadily increasing demand and that coupled with unrest in the middle east create enough uncertainty to keep prices high.
Greg

I read an article the other day that stated that Honk Kong was adding 1,000 cars per day to their highways with no end in site. If just 1/4 of the 1.3 billion people in China buy cars, they will have 325 million cars on the road currently the US has about 150 million. Think of what that will do to gas prices.

[Lee DeRaud]

How many of us are too quick to believe some numbers tossed out in an article? Do you believe any of the numbers you hear about anything anymore? I'm sure 10 different people could come up with 10 significantly different statistics to either support or blast this article or write their own.Probably just a coincidence, but it was published on April 1...make of that what you will.

(If it were my name on the byline, I would strongly resist having material on a serious subject come out on that date.)

[Pat Germain]

What all these so called "experts" seem to never mention is that the dollar's lower value has had a huge effect on gas prices, something like 20%.

Isn't petroleum traded in US dollars?

[Lee DeRaud]

Isn't petroleum traded in US dollars?Nominally. But that doesn't mean the oil producing countries are willing to take a profit hit just because the dollar takes a dive.

[Pat Germain]

Saudi Arabia is currently taking major financial hits because their currency is pegged to the US dollar. Since they import everything, mostly from Europe, things are mighty expensive for the average Saudi. (They're not all rich oil folks.)

Things are getting so bad the Saudis have been talking about breaking the connection of their currency to the US dollar.

Contrary to what many people believe, the US does not get most of its petroleum from Saudi Arabia or even the Middle East. We get the vast majority of it from Canada and Mexico who aren't OPEC members. Venezuela is probably still up there as well and they are an OPEC member.

As painful as high gas prices are, all these conspiracy theories we hear about are just frustrated nonsense. Everybody quickly forgets about this when gasoline prices go down.