PDA

View Full Version : How are Gas Prices affecting you?



Rich Konopka
07-06-2008, 8:17 AM
I have to fill up today my car today and I dreading shelling out $60 bucks. The prices gere in CT are all over the place from $4.20 up to $4.50 / gallon. I filled up in NJ earlier this week for $4.08 a gallon and they pump it for you in NJ per state law.

This morning I read an article about truck owners and tuck hobbyist getting hit hard

http://www.nytimes.com/2008/07/06/business/06tank.html?_r=1&oref=slogin&ref=todayspaper&pagewanted=print (http://www.nytimes.com/2008/07/06/business/06tank.html?_r=1&oref=slogin&ref=todayspaper&pagewanted=print)

I personally own a F-150 which does not get much mileage. It is 3 years old and has less than 5000 miles.

Jim Becker
07-06-2008, 9:29 AM
Since I drive so little, it's not really affected me too much outside of the need to grumble. But with the summer in full swing, I am driving every morning to drop off Nastia at horse camp...even driving a hybrid, I'm paying a lot more attention to speed and "how" I drive. (I'm naturally a relatively fuel-efficient driver, but getting more anal about it anyway)

But I surely am a fan of "cheap" New Jersey gasoline! LOL Paid $3.92 last week near the train station in Trenton...while watching some obvious drug deals going down...oy!

Rich Konopka
07-06-2008, 9:52 AM
Since I drive so little, it's not really affected me too much outside of the need to grumble. But with the summer in full swing, I am driving every morning to drop off Nastia at horse camp...even driving a hybrid, I'm paying a lot more attention to speed and "how" I drive. (I'm naturally a relatively fuel-efficient driver, but getting more anal about it anyway)

But I surely am a fan of "cheap" New Jersey gasoline! LOL Paid $3.92 last week near the train station in Trenton...while watching some obvious drug deals going down...oy!


I drove a brand new Camry Hybrid last week in Canada and although it was better on gas there is still along way to go. I can see in the near future where you can drive a hybrid using the electric under 40 before the legacy gas engine kicks in. I have been looking at new cars and of course the Hybrids are on the list. I was wondering what the maintenance cost of replacing the batteries are? How long have you had your Highlander Hybrid?

Mitchell Andrus
07-06-2008, 10:00 AM
The pity is that gas has risen too quickly to a price that it should have slowly climbed to anyway - creating a jolt to the system. Maybe we needed this to get off dead center. Anyone buy a new car for $6,500.00 lately? Is your house worth 2X or 3X it's value of 20 years ago? Anyone (reading this) still making $7.50/hr?

So why would anyone think gas would stay at $1.69/gallon forever?

The good news is that alternatives are finally not so much more costly by comparison, so we'll see faster more spirited development of yet another battery type and solar cells that don't consume more energy during manufacture than they return during their lifetime.


BTW - has anyone heard of any legal battles over taking down trees to get a residential solar field more sunlight?

Lee DeRaud
07-06-2008, 10:30 AM
Since I drive so little, it's not really affected me too much outside of the need to grumble.What he said: I buy gas about once a month whether I need to or not. :cool:

Despite living in Greater Spawltopia, I find that my life is fairly compact. Even before I retired, work was only a 10-minute surface-street micro-commute away, although I guess in one sense I've been amortizing my gas over the decades by paying more for my close-in house.

(Completely unrelated factoid: I did a trip to the Grand Canyon in May, total of about 1500 miles including all the side trips. Car did waaay better than its EPA highway rating, even though it spent almost all of the trip pushing 80. What's up with that?)

Jim Becker
07-06-2008, 10:34 AM
Rich, replacing the batteries isn't something you really need to worry about...they are warranted for 8 years or 100K miles but will likely last longer time-wise. The '09 Highlander has an electric only mode for city driving and folks with the '04-'08 Prius can get an aftermarket mod from Coastal to provide that feature. (I have it for Professor Dr. SWMBO's '08 Prius, but haven't had the chance to install it yet)

My Highlander is an '06 and was purchased in December '05. I just broke 30K miles three weeks ago and get about 27 mpg "running around". Last weekend, I got 51 mpg in the Prius while driving down and back for a family event just south of Washington DC. Our '02 Prius, which was traded on the '08 a few months ago, never gave us any problem, although it was not nearly as good on gas as the '08 is. The Camry hybrid is really nice and owners I've spoken to have reported excellent fuel economy. And the "hybrid financial nut" is less for the Camry than it is for the Highlander...only a few grand. (I wanted Professor Dr. SWMBO to go with the Camry hybrid, but she felt much more comfortable in the Prius, preferring the smaller exterior. But the interior of the Prius is surprisingly large...much like the previous generation of the Camry) Of course, right now it's very hard to buy a hybrid without waiting. Prius is backlogged at least 3 months due to demand and the factories running at maximum capacity.

You should have the choice of a "plug-in" hybrid in the next few years from at least Toyota and GM.

David G Baker
07-06-2008, 10:43 AM
Imagine the "Baby Boomers" reaching retirement age trying to live on a fixed income.
My gas 6 cylinder 2000 Camry LE gets right around 30 mpg but costs over $60 to fill with fuel.

Matt Ocel
07-06-2008, 11:18 AM
Just filled my F-150.
$108.22.
That was my parents mortgage payment when I was growing up.

Steve Clardy
07-06-2008, 11:39 AM
I don't go to town for misc. stuff like I used to.
If I can put it off till several things build up that I need to go to town for, that's what I do.

Mitchell Andrus
07-06-2008, 12:55 PM
Rich, replacing the batteries isn't something you really need to worry about...they are warranted for 8 years or 100K miles but will likely last longer time-wise.

Last a long time and remain effectively useful a long time are two different things. If they go down to say... 70% efficient do you get a new battery, or just burn more gas til they 'quit'? What's the trigger?

Butch Edwards
07-06-2008, 1:32 PM
I've noticed a lot less traffic during "off hours"..we're still bumper to bumper during "work" hours on the local roads.
the price has hurt many young folk just starting out. it's also hurting those over extended with debt,as their disposable income (what there was) has been eaten up by fuel-related expenses. this isn't over,by a long shot. and you can't give a SUV away these days..the local car dealers won't take 'em in on trade.
as far as the $7.50/hr goes, many around here are minimum wage workers....many aren't, but they're the ones that got caught up in the Real estate bubble,too.

Michael Wetzel
07-06-2008, 1:32 PM
I am learning to do one stop shopping or make one large trip for everything I need. The days of running for one item are over. My F250 has a 38g tank and it gets about 10-17MPG (city/highway) at best. So I am not overly happy about the fuel pricing.

Reed Wells
07-06-2008, 1:36 PM
I don't drive more than a hundred miles a month, so that is not a burden, BUT, I ship my furniture all over the U.S. and Canada and the freight charge is killing me and others like me, who depend on our transportation system. God, that is what made this country so strong, it's mobility. I can't see any relief soon and I can't keep raising prices to recover some of the transportation costs. In a slow economy furniture is one of the last things a middle class family will spend money on. OK, my confused mind will take a go slow pill and let it work itself out, I hope.

Kurt Johansson
07-06-2008, 1:56 PM
Congratulations to you Americans, your gas price is just about half of ours here in Sweden.
Kurt Johansson

Jeffrey Makiel
07-06-2008, 2:09 PM
I hear a lot of folks with pickup trucks complain about their gas mileage now. However, a reasonable pickup is still economical if you really have a need for a pickup. For instance, my 97 Ford F-150 pickup gets 20 mpg combined highway/city. Here's why:

1. Small V8...4.6L vs. 5.4L or diesel

2. Two wheel drive vs four wheel drive

3. Truck was lowered 4" to a 'normal' height. Handles better too.

4. Not an extended cab...but fits 3. Used predominantly as a single person commuter vehicle.

5. Has a short bed with hard tonneau cover for improved aerodynamics and secure, dry storage.

I chose this truck 11 years ago based upon personal preference which did not include gas mileage at that time. But 20 mpg ain't bad now. And, I can still haul my junk around. :)

-Jeff :)

Eddie Simmons
07-06-2008, 2:47 PM
I work as a Facility manager and I have 22 site that we visited each month. It is costing me about 600.00 dollars a month. Hope that we can come up with something soon.:(

Rich Konopka
07-06-2008, 3:53 PM
Congratulations to you Americans, your gas price is just about half of ours here in Sweden.
Kurt Johansson

Kurt, I think it is more of a congratulations for not having the taxes on gas that you have in Sweeden. On the other hand we should congratulate Sweeden for having one of the best living standards in the WORLD.

Joe Chritz
07-06-2008, 4:49 PM
I got a new assignment which includes a G ride (state owned) and a gas card. The wife is going back to work (county transportation) and will have a bus here at the house. We now only drive when we go somewhere on personal business so I am actually spending a lot less on fuel than this time last year.

If we both still had to drive into work it would have hurt a fair amount.

Joe

Bruce Page
07-06-2008, 5:48 PM
My foot has gotten lighter.

John Keeton
07-06-2008, 5:58 PM
As Reed noted, shipping cost is hurting many sectors of the economy. We live in an area that is not serviced by rail by any great extent, and we are not on a waterway. Everything we buy comes in by truck from somewhere. In reality, fuel prices are hurting our local economy in so many ways in addition to the price to fill up our vehicles. Personally, we don't drive very much anyway, so our fuel cost year to date is only $1500. But, we are paying a lot more for food, etc. The wife and I now drive at 65 mph and it makes a significant difference.

Last December, in large part because we saw this coming, we shut down and liquidated a business we had owned for a little over a decade that was a "discretionary spending" business - guns and archery. I have talked to so many of our former customers that tell us we got out just in time. They have cut back their purchases dramatically because they no longer have that extra $50/week to spend on "toys." We were very fortunate to successfully liquidate over $400,000 in inventory when gas was "only" $3/gal. I really feel for others that may not be as fortunate.

Jason Roehl
07-06-2008, 8:01 PM
Fortune would have it that my '93 F250 (~10mpg) developed a tranny issue, so I parked it due to the expense of having it fixed. I may fix it myself later, but in the meantime, I needed work wheels. A friend/former neighbor had an '89 Mazda B2200 pickup with 91k miles on it and in fairly good condition. I have been bugging him for years to sell it to me, and when he heard of my plight, he did just that. I am getting close to finishing off my first full tank, so I'll know mileage here in a couple days, but it's looking like about 20 mpg in town. I just have to get used to the much smaller cab and cargo area.

Oh, and my wife and I started to change our driving habits a couple years ago--since then we've ratcheted down our trips and speed even more.

Nancy Laird
07-06-2008, 8:16 PM
To borrow a phrase from Bruce, my foot has also gotten lighter. I just arrived in Phoenix after a 425-mile drive from Albuquerque - on 3/4 of a tank in my Windstar, with the A/C ON most of the way. I just set the cruise to just a hair under 70 and did fine. I paid $3.829 yesterday for gas at Sam's, and saw gas in Holbrook, AZ, (right off the freeway) for $4.399. I haven't seen any gas stations here in Phoenix yet, but the stations I saw on the way were hovering around $4 to $4.10. Not bad, I guess? My little Windstar just got about 25mpg on the trip.

When I'm in Albq., I don't drive every day because I don't need to, but I've started consolidating my trips so I kill several birds with one stone, about twice a week. No more "run to the grocery for a quart of milk" trips.

Andrew Derhammer
07-06-2008, 8:16 PM
I'll have my permit next february. I'm considering getting a scooter! Our neighbors have one. He fills the 2 gallon tank once a month:eek:

Keith Outten
07-06-2008, 9:08 PM
I have adjusted my shopping habits. Whether I need lumber or hardware or whatever I don't make any more trips to the store unless I am traveling to our from work. I plan my weekend needs for projects, once I roll in the driveway thats all she wrote.

Since I have so much grass to cut I now wait until I have to cut rather than cutting every Saturday. At work last week several people noted that evening traffic on our roads is noticeably lighter than it has been in thirty years. Shopping centers that normally have packed parking lots here have plenty of empty parking spaces.

The price of everything is rising based on fuel costs, major lifestyle adjustments are inevitable for working class people.

.

Jeffrey Makiel
07-06-2008, 9:22 PM
The price of everything is rising based on fuel costs, major lifestyle adjustments are inevitable for working class people.

That about sums it up. In my area, other required things, like property tax and health insurance, have been on the rapid rise for many years now. They have been escalating about as quickly as gas and heating oil.

It's not easy to put a happy face after my name anymore.

-Jeff :)

Tom Godley
07-06-2008, 10:05 PM
I thankfully, am not required to do much driving -- years ago I did over 30k a year. Now it is just weekend trips.

I do most of my work in front of a computer - so my commute is short :)

Last week after coming back from a trip my fuel light came on - 25 gallons of premium will get your attention!

I do feel sorry for those who recently purchased homes out in distant suburbs - the value of their houses are down and the commuting cost are killing them.

Both of my primary cars are rather poor in the mileage department - so I am lucky that I do not have a long commute.

Bryan Rocker
07-06-2008, 10:10 PM
I love my 2004 4Runner, I already have over 75K on it, I just replaced the original brakes this weekend. It is in great shape except for the gas mileage. If it weren't for the fact that I start driving 50 miles each way to work tomorrow I wouldn't sweat 18 mpg on average. However, driving 100 miles a day, 26K a year 18 MPG will not cut it. We are looking very hard at the Honda Civic and Toyota Corolla, both rated at 36 MPG or better, a hybrid would be nice but I am not sure I have the patience to wait that long. Around here they are saying 6 months or better before you can get one IF you put money down ahead of time. For me its dollars and cents, I can spend $18K for a econo box and save $3K a year at least.

Greg Peterson
07-07-2008, 12:15 AM
It is indeed interesting times we live in. I'm not sure when or where the breaking point may be, but I've got to think that we are closer to it than ever before.

Some of the effects of these prices will take awhile to show up in tangible ways that all of us will notice. I think most people are still trying to make what they hope to be temporary adjustments.

It is relatively painless to curtail discretionary spending for a while. Hard to say what the general mood becomes if we end up with gas prices permanently pinned above $4/gallon.

Heating oil and diesel fuel have even less wiggle room. At least with gas, people usually have options (walk, bike, mass transit, car pool, maximize trips). People need oil for heat and farmers, truckers and railroads need diesel in order to put food on our tables.

I'm hoping for the best, but expecting the worst. And I fear my over active imagination can not fully appreciate just how interesting the times could get.

Dennis Peacock
07-07-2008, 12:36 AM
We drive as little as possible any more as well as consolidating our trips for shopping.

I'm now riding motorcycle to work each day and my fuel cost fo the month of June 2008 wasy just under $25....as compared to $260 in fuel for the previous month of driving "my car" to / from work.

Latest stats is that by the end of July 2008, Texas will have over 60,000 new motorcycle/scooter owners/riders. Here in Conway, the trooper stated that they are licensing 10-15 motorcyclists per day of class. For a town of around 50,000 people, that's a lot of new bikers/scooter riders on the road each week.

glenn bradley
07-07-2008, 2:41 AM
Before I will drive to Rockler to use an in-store coupon, I make sure the discount will cover the gas.

Lee Schierer
07-07-2008, 9:23 AM
My foot has gotten lighter.
My son was just relating on his blog, that he has discovered that he can get 15% better mileage by driving the speed limit, limiting acceleration to nominal increases and anticipating stops by letting his foot off the gas a couple of seconds sooner and not speeding up to the stop light or sign. He also noted that he generally has a string of cars behind him waiting to pass at every opportunity. I've been doing the same and have also noted increased mileage between fillups. Still it is shocking to put over $40 into my '95 Miata when I used to fill it for under $20.

For some reason several stations in our area have elected not to cross the $4 per gallon mark and have stayed just below that for two weeks now! The stations that advertise their gas is all American is higher priced.

Joe Pelonio
07-07-2008, 9:50 AM
I'm happy to report that our gas has actually dropped some, was up to $4.46 and yesterday was $4.39. I'm so glad I moved the shop to the house, the commute was 25 minutes in the morning, over an hour coming home (11 miles) sitting in stop-go traffic wasting gas. I do still make deliveries and pick up materials but combine trips and rarely go more than 1-2 times a week,
avoiding commute times, which is saving me a lot of gas. Normally we drive down to Portland 3-4 times a year, this year we have yet to go and may not.

Lee DeRaud
07-07-2008, 9:50 AM
Latest stats is that by the end of July 2008, Texas will have over 60,000 new motorcycle/scooter owners/riders. Here in Conway, the trooper stated that they are licensing 10-15 motorcyclists per day of class. For a town of around 50,000 people, that's a lot of new bikers/scooter riders on the road each week.Be afraid. Be very afraid. :eek:

(Yeah, I know: everybody was a newbie once. But I remember the same thing happened around here in '79, and it wasn't pretty.)

Butch Edwards
07-07-2008, 9:52 AM
It is indeed interesting times we live in. I'm not sure when or where the breaking point may be, but I've got to think that we are closer to it than ever before.

Some of the effects of these prices will take awhile to show up in tangible ways that all of us will notice. I think most people are still trying to make what they hope to be temporary adjustments.

It is relatively painless to curtail discretionary spending for a while. Hard to say what the general mood becomes if we end up with gas prices permanently pinned above $4/gallon.

Heating oil and diesel fuel have even less wiggle room. At least with gas, people usually have options (walk, bike, mass transit, car pool, maximize trips). People need oil for heat and farmers, truckers and railroads need diesel in order to put food on our tables.

I'm hoping for the best, but expecting the worst. And I fear my over active imagination can not fully appreciate just how interesting the times could get.

I agree with this post... times WILL be getting tougher...WAAAAAY tougher. and no candidate can stop the snowball effect...like my GrandDaddy used to say" if ya wanna dance, ya gotta pay the fiddler"....and the fiddler has his hand out.

Rob Russell
07-07-2008, 10:26 AM
I get pretty good gas mileage on this, especially if the baked beans for last night's supper had chili. My commute is 8-9 miles (different routes in vs. going home). I can't ride every day, but it does make a difference in how often I have to fill up.

Tim Thomas
07-07-2008, 12:46 PM
I was spending the equivalent of a new car payment every month to keep gas in my 1984 Dodge Ram pickup, so about a month ago I bought a Honda Civic. Now my pickup sits in the driveway and only gets driven for woodworking/home improvement related shopping trips. (Thankfully that is not often, nor very far to go when I do.) Of course, my wife is driving the new Civic and I'm in the Mitsubishi Endeavor, but overall we are still saving enough on gas that it is basically paying for the Civic. Fortunately the pickup is owned outright and the insurance and taxes on it are very low, so it isn't costing me much to have 3 cars when I really only need 2. I feel bad for anybody that is stuck with a big new truck or SUV and either can't get out of it or needs it for work. I just don't see anything on the horizon that would help gas prices to trend back downward in a significant way.

Michael Schumacher
07-07-2008, 3:34 PM
We've changed things. I drive a 2002 Dodge Diesel truck - so the price is worse, but comparable to some of those on either coast. Anyway, I'm 4.2 miles from work, so I ride my bicycle as much as possible, but the last 3 weeks, I've been fighting a bad cough, so driving to work I had to do. Going home to my in-laws or my folks, we've dropped 10mpg below the speed limit on the interstate (60 and 65) and get passed quite often, but I think many have quit speeding. My wife and I try to get things all done in a trip and combine things together - we still need to work on that, but we are getting better. In my truck, I've developed a VERY light foot. Another thing I've done is coasting down hills, I pop it out of gear and just coast as much as possible. By doing this, I've added 1.6mpg to the current tank I've got - which is a significant increase if you figure I normally get 16-18mpg around town. I'm not really looking forward to winter - I think things are going to get really hard this winter. All prices are going up - the water/gas bill came and it's double of what I thought it would be...winter is going to be TOUGH...unless we can burn wood in the fireplace this year.

Michael

Tyler Howell
07-07-2008, 8:00 PM
There are so many changes in my life style lately it is hard to determin impact.
The biggest would be the automatic pucker that takes places when the meter hits $80.00:eek:

Rich Konopka
07-07-2008, 8:40 PM
There are so many changes in my life style lately it is hard to determin impact.
The biggest would be the automatic pucker that takes places when the meter hits $80.00:eek:

Tyler,

The consensus from the poll is that it is hitting everyone. The "Lucky" few who have not felt it with the gas fillups are feeling it other areas. For those of us who heat our homes with heating oil are going to feel the double whammy this winter. We checked with our oil company and we used 820 gallons of heating oil in the past year and it went from 2.69 gallon to 4.89 gallon. That is going cost us an additional $2000 this year and not to mention that our property taxes went up another $800 bucks. Ok I am done ranting.

Greg Peterson
07-07-2008, 11:40 PM
Riddle me this: Why is heating oil and diesel fuel are more expensive than the refinery intensive process of producing gasoline?

I'm staying tuned to this same Bat Channel, awaiting an official Bat answer!

I feel sorry for the folks that are going to have to make some very hard choices this fall and winter.

Mitchell Andrus
07-08-2008, 12:08 AM
Riddle me this: Why is heating oil and diesel fuel are more expensive than the refinery intensive process of producing gasoline?

I'm staying tuned to this same Bat Channel, awaiting an official Bat answer!

I feel sorry for the folks that are going to have to make some very hard choices this fall and winter.


Diesel, road use taxes. #2 oil, 'cause they can.

John Schreiber
07-08-2008, 1:23 AM
It is indeed interesting times we live in. I'm not sure when or where the breaking point may be, but I've got to think that we are closer to it than ever before.
. . .
I'm hoping for the best, but expecting the worst. And I fear my over active imagination can not fully appreciate just how interesting the times could get.
Very well put.

I think those of us alive now have lived in a unique period of human history. It has never been and probably never will be so easy to travel.

It makes me sad. We will spend more time in our couches and less in the big busy world and we will be different because of it.

Tom Godley
07-08-2008, 3:00 AM
Europe has moved away from gasoline in favor of diesel (#2) as a road fuel - they actually have an excess supply of gasoline from the refineries. All last year much of this was being shipped to the USA.

The reverse is now the case with #2. With the USA now producing low sulfur #2 it has opened up opportunities to ship this product to Europe. Germany is a huge market for #2 for heating. This product, prior to the new refining process had a limited marked - so it stayed in the USA.

supply/ demand mixed with fear will drive this market -- until it doesn't :)

Rod Sheridan
07-08-2008, 4:21 PM
Fuel prices have also risen in Canada, in Toronto I'm paying aproximately $1.39/litre.

I reduce consumption through better planning, and avoiding unnecessary trips.

I also ride my motorcycle March through October so that reduces consumption also.

I know many people are hurting due to high fuel prices, however in North America, we're basically energy pigs.

If we are to reduce consumption and clean up the environment, we have to get used to further increases in prices, as well as fuel costs that actually include the cost of environmental damages.

Fuel costs that are twice their current level, are probably realistic.

regards, Rod.

John Sanford
07-08-2008, 4:53 PM
The increase in gasoline prices have had only a modest impact on me thus far, okay, that's not exactly true. Still, the heat (oh no, global warming :eek:, that or it could just be summertime in the Mojave desert :cool:) has had far more impact on my willingness to go tooling about than gas prices.

I'm sick and tired of all the doom and gloom and whining about gas prices in the media. :mad: That's been the impact. I'm getting 35-45 mpg, run premium. I've been looking to get a new motorcycle for my daughter to use and also as a backup for my current ride. Unfortunately, "entry-level" motorcycles are very popular right now, so the bike I want can't even be found within 500 miles of me. Now, there's likely a downstream upside to this, but it'll be a year or more before many of the folks who are jumping onto motorcycles right now discover that they are not riders at heart, and the market becomes flooded with late model used motorcycles.

For those of you who are saddled with long solo commutes and large vehicles, you have my sympathy. Enjoy your A/C and tunes, and take heart in the fact that gasoline is still less expensive than Evian, Perrier, Deft, Minwax, and Budweiser and Jack!

Butch Edwards
07-08-2008, 7:35 PM
The increase in gasoline prices have had only a modest impact on me thus far, okay, that's not exactly true. Still, the heat (oh no, global warming :eek:, that or it could just be summertime in the Mojave desert :cool:) has had far more impact on my willingness to go tooling about than gas prices.

I'm sick and tired of all the doom and gloom and whining about gas prices in the media. :mad: That's been the impact. I'm getting 35-45 mpg, run premium. I've been looking to get a new motorcycle for my daughter to use and also as a backup for my current ride. Unfortunately, "entry-level" motorcycles are very popular right now, so the bike I want can't even be found within 500 miles of me. Now, there's likely a downstream upside to this, but it'll be a year or more before many of the folks who are jumping onto motorcycles right now discover that they are not riders at heart, and the market becomes flooded with late model used motorcycles.

For those of you who are saddled with long solo commutes and large vehicles, you have my sympathy. Enjoy your A/C and tunes, and take heart in the fact that gasoline is still less expensive than Evian, Perrier, Deft, Minwax, and Budweiser and Jack!

I'm bettin' the cost of ALL motorcycles/scooters will rise dramatically in the coming months.... I already see more 2 wheelers on the road, and just like high MPG mini-cars,they'll be caught in the Supply/demand chain....

Art Mulder
07-08-2008, 9:18 PM
My foot has gotten lighter.
This.

I noticed this a year or so back. When driving 120kph(74.5mph) on the Highway, my gas gauge would go down a LOT faster than when I cut back to 110/115kph (68/71mph).


The price of everything is rising based on fuel costs, major lifestyle adjustments are inevitable for working class people.

True. Very true. I wonder if people are going to notice that imported stuff (ie: fruit from South America) is rising more than local stuff. That actually could be a good thing.


I get pretty good gas mileage on this, ... I can't ride every day, but it does make a difference in how often I have to fill up.
Yay, Rob!

10 years ago when we moved here we purposefully chose a house within biking distance of my work. It has saved my wife and I a ton of money -- we've stayed a one car family for all that time. I tell folks that this has been like giving myself a $10,000 a year raise.

This year I'm cycling even more, since I'm training for a 2 week charity bike ride this summer (see my signature). And it's really opened my eyes to how many places in town are really not that far on a bike. Especially since it seems to me that in the car I get stopped more by stop-and-go traffic than when biking. My friends and I have noticed far more people cycling (out in the countryside, on long distance rides, that is) as well, but I can't tell yet if that is also translating into more people cycling inside the city.

I have no idea about bus ridership. I really don't care for the bus system around here.

John Keeton
07-08-2008, 9:27 PM
Butch, I agree with you in the short run on the price of 2 wheelers. Actually, I think prices generally will continue to increase because the petroleum issue permeates all facets of our economy.

I think Detroit has finally (the hard way) gotten the message on this issue and will shortly be revamping their designs to address the demand. Hopefully, in a couple of years, if we can last that long and GM doesn't fold up, there will be new and much more efficient vehicles available, and the current demand for 2 wheelers may ease some.

And, as the poll reflects, I think we are changing our thinking. What has surprised me though, is that we apparently have not yet reached the "pain" point. I still see a lot of cars left running while the driver goes inside a store for a moment, and notice a lot of vehicles occupied by only the driver. And, while it seems a lot more people are in the right lane on the Interstate going 65, I still get passed by people in tanks going 80+ mph.

Things will never return to "the good 'ol days." High fuel prices are going to be a part of our future simply because the US is no longer a major force in world markets. If we don't produce our own energy, we will be bidding against China. Their demand is increasing exponentially, and they will ultimately suck up all available resources on the global market. In 2007 we imported 59% of our petroleum needs. For some scary insight into this issue check out http://www.eia.doe.gov/basics/quickoil.html

According to some media reports, we currently are importing 70%. We either find new energy sources, and/or get serious about drilling and refining our own HUGE resources, or get used to paying higher prices for everything! It is really that simple.

Joe Mioux
07-08-2008, 9:28 PM
I have switched to E85 in my Ply Voyager. Gas mileage drops about 4 miles per gallon in the city.

However, the other day, I drove into STL and got just shy of 22 mpg with E85. granted the day was 80 degrees and low humidity and no wind, but that is still really good.

Fuel is costing me about $1000 per month. That hurts.

joe

wyman autry
07-08-2008, 10:28 PM
i understand the demand for more fuel, through out the world. i understand that the u.s.of a. doesn't call the shots in the world any longer. also that oil will some day play out. i under stand these things, but i do not understand the obscene profits that these oil companies are racking up. i know they are entitled to make money. i know that they have drilling cost, exploration cost, etc. but they have always had these cost, without bankrupting the economy. these profits are way out line. what these companies could use is a lesson on morals and ethics. thats just my opinion, and i'm stickin to it.

Greg Peterson
07-08-2008, 11:12 PM
"...get serious about drilling and refining our own HUGE resources, or get used to paying higher prices for everything! It is really that simple."

It's even simpler than that.

Lets pretend that we are now pumping oil out of ANWAR. A barrel of ANWAR oil on today's market (7/8/2008) would sell for, get ready........$136.24.

When the US only has approximately 3% of the known oil reserves in the world, drilling isn't a realistic option. Our own government recently released a report on the impact of ANWAR oil on the US market. Two to three cents per gallon of gas is what we would see. Meanwhile, Alaska would enjoy crazy money, the oil companies would enjoy crazy money, and the rest of us would continue suffering.

The only ones that stand to gain from domestic drilling are the oil companies. Period. And will anyone speak as to the quality of the oil? Is it as 'sweet' as Arab oil? I've heard that it is not.

The oil companies are getting back into Iraq after having been evicted by Hussein when he nationalized the oil industry in Iraq. Some Iraqi's will get a percentage of the sale of each barrel of oil. Meanwhile, oil companies will be plenty busy drilling oil over there.

Clifford Mescher
07-08-2008, 11:33 PM
More drilling equals more supply for the world. More supply will bring down prices. Clifford

Dennis Peacock
07-08-2008, 11:44 PM
More drilling equals more supply for the world. More supply will bring down prices. Clifford

Only if congress will put a stop to the "speculators". ;)

Dennis Peacock
07-08-2008, 11:48 PM
What I'm really surprised about?

The Poll status reflects that we as the public in general are still "not feeling the pain" of the higher fuel costs.

What about common food market prices that are higher than ever before?
What about the many of us that struggle every month just to afford a way to/from work?

Could it be that we make so much money that we don't really feel the pain of the increased expense of just "living" or "surviving".??? What about those that have had to reduce 3 meals a day down to 2 so they can still survive?

I could go on and on, but I won't. It only upsets me even more.

Greg Peterson
07-09-2008, 1:57 AM
More drilling equals more supply for the world. More supply will bring down prices. Clifford

There isn't a shortage Clifford. Where is there a gas station that doesn't have gasoline? Where is there one, single, solitary news report about a fuel shortage?

Supply/Demand are pretty much neck and neck. Granted there isn't much wiggle room, but currently the global supply is slightly greater than demand.

Pumping oil from our measly 3% reserves doesn't add up to a hill of beans on the international market.

Like I said, a barrel of ANWAR oil will sell at whatever the prevailing international market will bear. And there is no way we can drill enough and pump enough oil to seriously impact the international oil market.

The oil companies want to drill off shore because oil is selling for $136 barrel today. There's money to be made. Big money. But you and I will not see a lower price at the pump because they're drilling off the coast of Florida, or ANWAR. Not going to happen.

Sorry to burst your bubble. But the drilling argument is a red herring, pure and simple.

Clifford Mescher
07-09-2008, 6:22 AM
There isn't a shortage Clifford. Where is there a gas station that doesn't have gasoline? Where is there one, single, solitary news report about a fuel shortage?

Supply/Demand are pretty much neck and neck. Granted there isn't much wiggle room, but currently the global supply is slightly greater than demand.

Pumping oil from our measly 3% reserves doesn't add up to a hill of beans on the international market.

Like I said, a barrel of ANWAR oil will sell at whatever the prevailing international market will bear. And there is no way we can drill enough and pump enough oil to seriously impact the international oil market.

The oil companies want to drill off shore because oil is selling for $136 barrel today. There's money to be made. Big money. But you and I will not see a lower price at the pump because they're drilling off the coast of Florida, or ANWAR. Not going to happen.

Sorry to burst your bubble. But the drilling argument is a red herring, pure and simple.
Beg to differ. Growing economies like China demand more oil. Still supply and demand. Nuclear power in USA would help solve energy problem. Clifford.

John Keeton
07-09-2008, 6:57 AM
Clifford, you and I are in agreement on nuclear power. But, the petroleum issue is not just about burning it for fuel/heat. Everything you use, pretty much, has a petroleum factor. So many things derive from petroleum, asphalt, lubricants, industrial compounds, fabrics, etc. Unfortunately, it seems we will always need oil. If we change our tariff structure, encourage domestic production, find other transportation and heating sources, and use our oil for non-fuel purposes, we could gain some independence from foreign oil. Sounds a little to simple and utopian, I guess. For an interesting video check this out http://www.youtube.com/watch?v=ZPch2k63uj4

Mitchell Andrus
07-09-2008, 8:04 AM
i understand the demand for more fuel, through out the world. i understand that the u.s.of a. doesn't call the shots in the world any longer. also that oil will some day play out. i under stand these things, but i do not understand the obscene profits that these oil companies are racking up. i know they are entitled to make money. i know that they have drilling cost, exploration cost, etc. but they have always had these cost, without bankrupting the economy. these profits are way out line. what these companies could use is a lesson on morals and ethics. thats just my opinion, and i'm stickin to it.


You and me are the oil companies. Anyone with a well diversified 401K owns oil company stock. The oil companies are us... and my mom, grandmother and the teacher's union's pension fund.

You can give some back if you'd like, I'm keeping mine.

Dollar for dollar, when I go to work, I make a better margin than the big oils do...

Lee DeRaud
07-09-2008, 10:25 AM
What I'm really surprised about?

The Poll status reflects that we as the public in general are still "not feeling the pain" of the higher fuel costs.

What about common food market prices that are higher than ever before?
What about the many of us that struggle every month just to afford a way to/from work?

Could it be that we make so much money that we don't really feel the pain of the increased expense of just "living" or "surviving".??? What about those that have had to reduce 3 meals a day down to 2 so they can still survive?

I could go on and on, but I won't. It only upsets me even more.I hear what you're saying, but there's no reason to be surprised at the poll results.

It's a self-selecting poll: by definition, everyone "voting" has enough discretionary income to buy a computer and pay for internet access, and enough spare time to screw around on a woodworking forum. Dunno about you, but personally, gasoline is far enough down the budget list that by the time it really becomes painful, my cable/internet connection and this laptop will be long gone.

Montgomery Scott
07-09-2008, 12:07 PM
The author of this article from the Wall Street Journal would disagree with your opinion.

Although most experts agree that financial speculation was not responsible for the surge in the global prices of food and energy, many people remain puzzled about the source of these remarkable price rises. Economics offers a simple supply-and-demand explanation and reason for optimism about the future of commodity prices. In the case of oil, economics also suggests how policy changes today that affect the future could quickly lower the current price of oil.
We all know that rising incomes in China, India and the Gulf states have increased the demand for oil and many other commodities. But how could the modest, one-year rise of these demands lead to 100% increases in the prices of oil and other commodities? Let's take a look first at perishable agricultural commodities.

In the short run, there is little scope for increasing the supply of corn in response to a global increase in demand. For demand and supply to balance for the market to clear the price of corn must rise.
If the demand for corn were very price-sensitive, a relatively small increase in price would reduce global demand by enough to offset the initial rise in demand. However, since demand is actually quite insensitive to price in the short run, it takes a very large price rise to bring global demand into line with supply.


Here is a simplified picture of what happened in the past year. The quantity of corn demanded by high-growth countries rose gradually, increasing eventually by an amount equal to, say, 10% of the previous total global level of corn consumption. Since the supply of corn did not increase, the price had to increase enough to reduce corn consumption in other countries by 10%. If it takes a 10% increase in the price to reduce the quantity of corn demanded in the first year by just 1%, it would take a 100% increase in the price of corn to offset the initial 10% rise in the quantity of corn demanded.


In reality, the picture is complicated by the substitution in both supply and demand among different agricultural commodities, and by the role of the corn ethanol program. But the basic explanation holds: With a very low short-run price sensitivity of demand and little scope to raise supply in the short run, even a relatively small increase in corn demand by the high-growth economies can lead to a very large short-run rise in the price of corn.


Fortunately, the price sensitivity of both demand and supply will increase with time. This implies that the rising demand from China and other countries may eventually be accommodated with a price lower than today's level.


The situation for oil is more complex, but the outcome for prices is potentially more favorable.


Unlike perishable agricultural products, oil can be stored in the ground. So when will an owner of oil reduce production or increase inventories instead of selling his oil and converting the proceeds into investible cash? A simplified answer is that he will keep the oil in the ground if its price is expected to rise faster than the interest rate that could be earned on the money obtained from selling the oil. The actual price of oil may rise faster or slower than is expected, but the decision to sell (or hold) the oil depends on the expected price rise.


There are of course considerations of risk, and of the impact of price changes on long-term consumer behavior, that complicate the oil owner's decision and therefore the behavior of prices. The Organization of Petroleum Exporting Countries (the OPEC cartel), with its strong pricing power, still plays a role. But the fundamental insight is that owners of oil will adjust their production and inventories until the price of oil is expected to rise at the rate of interest, appropriately adjusted for risk. If the price of oil is expected to rise faster, they'll keep the oil in the ground. In contrast, if the price of oil is not expected to rise as fast as the rate of interest, the owners will extract more and invest the proceeds.


The relationship between future and current oil prices implies that an expected change in the future price of oil will have an immediate impact on the current price of oil.


Thus, when oil producers concluded that the demand for oil in China and some other countries will grow more rapidly in future years than they had previously expected, they inferred that the future price of oil would be higher than they had previously believed. They responded by reducing supply and raising the spot price enough to bring the expected price rise back to its initial rate.


Hence, with no change in the current demand for oil, the expectation of a greater future demand and a higher future price caused the current price to rise. Similarly, credible reports about the future decline of oil production in Russia and in Mexico implied a higher future global price of oil and that also required an increase in the current oil price to maintain the initial expected rate of increase in the price of oil.
Once this relation is understood, it is easy to see how news stories, rumors and industry reports can cause substantial fluctuations in current prices all without anything happening to current demand or supply.


Of course, a rise in the spot price of oil triggered by a change in expectations about future prices will cause a decline in the current quantity of oil that consumers demand. If current supply and demand were initially in balance, the OPEC countries and other oil producers would respond by reducing sales to bring supply into line with the temporary reduction in demand. A rise in the expected future demand for oil thus causes a current decline in the amount of oil being supplied. This is what happened as the Saudis and others cut supply in 2007.


Now here is the good news. Any policy that causes the expected future oil price to fall can cause the current price to fall, or to rise less than it would otherwise do. In other words, it is possible to bring down today's price of oil with policies that will have their physical impact on oil demand or supply only in the future.


For example, increases in government subsidies to develop technology that will make future cars more efficient, or tighter standards that gradually improve the gas mileage of the stock of cars, would lower the future demand for oil and therefore the price of oil today.


Similarly, increasing the expected future supply of oil would also reduce today's price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.


Any steps that can be taken now to increase the future supply of oil, or reduce the future demand for oil in the U.S. or elsewhere, can therefore lead both to lower prices and increased consumption today.

Clifford Mescher
07-09-2008, 12:12 PM
Clifford, you and I are in agreement on nuclear power. But, the petroleum issue is not just about burning it for fuel/heat. Everything you use, pretty much, has a petroleum factor. So many things derive from petroleum, asphalt, lubricants, industrial compounds, fabrics, etc. Unfortunately, it seems we will always need oil. If we change our tariff structure, encourage domestic production, find other transportation and heating sources, and use our oil for non-fuel purposes, we could gain some independence from foreign oil. Sounds a little to simple and utopian, I guess. For an interesting video check this out http://www.youtube.com/watch?v=ZPch2k63uj4
There are alot of exciting energy solutions that will do us good in the future. Short term (50-100 years) calls for oil exploration, drilling, building new refineries, and building more nuclear plants. The people that told us it won't work for 7-10 years are the same short-sighted people who said the same things in the 70's. Think where we would be today if we had done those things 30 years ago instead of being held hostage by special interest groups. Clifford

Joe Mioux
07-09-2008, 12:40 PM
Only if congress will put a stop to the "speculators". ;)

I used to be one,

No, Congress should stay out of that. The futures markets work pretty well. All those speculators, commodities futures traders, hedgers, whether in the pits or online provide liquidity, ration supply and manage profit.

Commodities Futures trading provides a means for businesses to protect themselves from rising costs or dwindling profit. It is called hedging.

For Example I could hedge my Natural Gas needs for next Winter's heating season. If for example the price of Feb Natural Gas contract is selling at a price that I find affordable, I could buy a contract and lock in my NG at that price. Come January, I would sell back that contract. During the spot month, the futures price and the cash price merge together.

What you look at is the spread between futures and cash price.. That is fairly consistent.

Speculators serve a valuable purpose. They provide liquidity for the commodity.

John Keeton
07-09-2008, 12:52 PM
Guys, I think we are on our way to solving this energy crisis thing! Give this thread a few more days, and we could have a viable solution. Now, somebody needs to step forward and volunteer to put it together for Washington - use simple language so they can understand! I can see the headlines now - "World energy crisis solved by woodworkers!" Hummmm???!!

In all seriousness, it has been a good exchange and informative. There is a lot of insight and wisdom amongst this group!!

Dennis Peacock
07-09-2008, 2:09 PM
Guys, I think we are on our way to solving this energy crisis thing! Give this thread a few more days, and we could have a viable solution. Now, somebody needs to step forward and volunteer to put it together for Washington - use simple language so they can understand! I can see the headlines now - "World energy crisis solved by woodworkers!" Hummmm???!!

In all seriousness, it has been a good exchange and informative. There is a lot of insight and wisdom amongst this group!!

You are exactly correct John....lots of stuff I've learned and been exposed to here in this thread. Been good so far.

John Schreiber
07-09-2008, 2:43 PM
. . . We either find new energy sources, and/or get serious about drilling and refining our own HUGE resources, or . . . .
The facts I can find indicate that the USA has between 1.5 and 3% of the world's oil reserves. I really don't want to drain what is left of our reserves first, then still be totally dependent on other countries.

I'd rather that we import 100% now. Then in 50 years we will be in a relative position of strength with a larger percentage of what is left. Even though I don't support further exploration/drilling in the USA now, in 50 years, things might be different.

The real solutions will involve massive, culturally difficult, changes in fuel use. We have just begun to scratch the surface in the stretch toward efficiency. Alternative sources of energy will be important, but we will never find sources as cheap as coal and gas. Completely new alternatives are possible, but I'm not going to hang my hope on them.

Jeffrey Makiel
07-09-2008, 2:58 PM
I used to be one,

No, Congress should stay out of that. The futures markets work pretty well. All those speculators, commodities futures traders, hedgers, whether in the pits or online provide liquidity, ration supply and manage profit.

Commodities Futures trading provides a means for businesses to protect themselves from rising costs or dwindling profit. It is called hedging.

For Example I could hedge my Natural Gas needs for next Winter's heating season. If for example the price of Feb Natural Gas contract is selling at a price that I find affordable, I could buy a contract and lock in my NG at that price. Come January, I would sell back that contract. During the spot month, the futures price and the cash price merge together.

What you look at is the spread between futures and cash price.. That is fairly consistent.

Speculators serve a valuable purpose. They provide liquidity for the commodity.

The new billionares of America are now hedge fund managers. Apparently, there's a lot of money in betting against Americans.

But what did they actually do to improve the product in a tangible and realistic sense? In the natural gas example, did they improve the caloric energy content of natural gas?

Perhaps this explains why the USA is producing fewer and fewer engineers, physicists and scientist. Who needs them?

-Jeff :)

Cliff Rohrabacher
07-09-2008, 3:20 PM
Gas is still among the cheapest things going.

Adjusted for inflation it's only about twice as much as it was in the 1960's

I'm waiting for it to hit $12 a gallon. Then I'll let someone pay me to take away their fancy schmancy Hummer and turn it into a 2 seat-er to make room for all the Lithium Ion batteries it'll take to make it go on NukUUler elektrikal

John Sanford
07-09-2008, 3:55 PM
Alternative sources of energy will be important.

Oil is an "alternative source of energy". As for the doom and gloom about how "we'll never see gas prices this low again", so what? Do you have any idea how much a gallon of whale oil goes for today?! Yet, oddly enough, it doesn't matter much, does it? Human ingenuity will, unless derailed by massive external application of human stupidity, come up with sources of energy that are even cheaper than oil and gas, once the "hump" of the development costs are affordable compared to oil and gas.

Part of me is looking forward to the whole fuel cell cars swooshing silently around the highways thing, but it sure is gonna be boring without the throaty growl of a big block V-8 or the wail of an inline 4 revving at 14,000 rpm. Maybe its time to start sound sampling the great engines of our age so we have a good library of sounds to sell to the retro-tuners of the fuel cell age!

Lee DeRaud
07-09-2008, 4:22 PM
Commodities Futures trading provides a means for businesses to protect themselves from rising costs or dwindling profit. It is called hedging.

For Example I could hedge my Natural Gas needs for next Winter's heating season. If for example the price of Feb Natural Gas contract is selling at a price that I find affordable, I could buy a contract and lock in my NG at that price. Come January, I would sell back that contract. During the spot month, the futures price and the cash price merge together.That model of commodity futures trading works quite well indeed, but it's based on the assumption that most of the people doing the hedging/speculation/whatever are (eventually) consumers of the commodity at some level. In other words, the assumption is that, next January, you will exchange those futures for natural gas, hopefully at a better net rate. But when pension funds start treating the commodity futures themselves as long-term investment vehicles (as opposed to a way to stabilize future needs for the underlying commodity), it effectively removes that amount of the commodity from future consumption, reducing tradable supply: come next January, if the price is still headed up, they have zero incentive to sell because they have no use for the actual commodity. And that, in itself, exerts upward pressure on the price. (In engineering terms, that's called "positive feedback", and it's not a good idea if what you're aiming for is a stable system.)

Another (much less verbose) way of looking at it: at sufficiently high investment levels, "hedging" is indistinguishable from "hoarding".

Rick Gooden
07-09-2008, 4:49 PM
Let's just put our heads in the sand...........and do nothing!

Mitchell Andrus
07-09-2008, 5:57 PM
Let's just put our heads in the sand...........and do nothing!

Well, part right. "WE" can't do anything but buy the products that are brought to market. Profitable, and ONLY profitable technology will make it to the marketplace, SOOOOOO.... watch your wallets. Today's gas may seem cheap 10 or 20 years from now.

Would anyone like to foot the bill to place charging stations in one of the apartment complexes in YOUR town???

Greg Peterson
07-09-2008, 6:10 PM
Nuk-lear energy is fine and dandy. We had a nuk-lear reactor out here. It was decommissioned and the cooling tower was imploded.

The spent fuel rods? They are still laying in the bottom of a nearby swimming pool.

Hanford, just a short jaunt up the Columbia from here, is packed with radioactive waste in below ground holding tanks. Some leakage is already detected.

Out here in earthquake country, we're only a healthy jolt away from complete disaster. Hanford would contaminate the Columbia river all the way to the Pacific ocean. And where it would go from there is any ones guess.

I'm all for nuk-lear power. But not until we can build a repository to store the spent fuel rods. Talk about short sighted.

There is no way to drill our way out of this. It's impossible to produce enough oil from our own reserves to have an effect on what is an international commodity.

And there is no shortage. Supply still exceeds demand. Look it up. If there were a shortage, no matter how slight, trust me, it would be headline news. Garaunteed.

When was the last time gas was rationed? Been at least thirty years to the best of my knowledge. But back then we did have a shortage.

Jason Roehl
07-09-2008, 6:33 PM
Now here is the good news. Any policy that causes the expected future oil price to fall can cause the current price to fall, or to rise less than it would otherwise do. In other words, it is possible to bring down today's price of oil with policies that will have their physical impact on oil demand or supply only in the future.


For example, increases in government subsidies to develop technology that will make future cars more efficient, or tighter standards that gradually improve the gas mileage of the stock of cars, would lower the future demand for oil and therefore the price of oil today.


Similarly, increasing the expected future supply of oil would also reduce today's price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.


Any steps that can be taken now to increase the future supply of oil, or reduce the future demand for oil in the U.S. or elsewhere, can therefore lead both to lower prices and increased consumption today.

Pity that not many in the media (or Congress) understand these few short paragraphs. It doesn't matter that drilling off our coast or in ANWR wouldn't likely yield oil for another 5-10 years. Just getting the ball rolling would affect the price of oil--either push it down, or keep it from rising quickly.

That's why I'm for some amount of research in alternative fuels, NUCLEAR power, more drilling and exploration, but axing the incredibly stupid corn-ethanol subsidy, starting with the "splash and dash", where tankers from another country can stop at our shores, mix in enough ethanol to qualify for the subsidy, then ship out to a different overseas country to sell the product, at a huge profit for the oil company, plus they get the subsidy (I heard something in the neighborhood of $9 million per tanker...!). In other words, I don't think we should put all our eggs in one basket. Let the market sift out what will work after some start-up help.

Joe Mioux
07-09-2008, 7:28 PM
That model of commodity futures trading works quite well indeed, but it's based on the assumption that most of the people doing the hedging/speculation/whatever are (eventually) consumers of the commodity at some level. In other words, the assumption is that, next January, you will exchange those futures for natural gas, hopefully at a better net rate. But when pension funds start treating the commodity futures themselves as long-term investment vehicles (as opposed to a way to stabilize future needs for the underlying commodity), it effectively removes that amount of the commodity from future consumption, reducing tradable supply: come next January, if the price is still headed up, they have zero incentive to sell because they have no use for the actual commodity. And that, in itself, exerts upward pressure on the price. (In engineering terms, that's called "positive feedback", and it's not a good idea if what you're aiming for is a stable system.)

Another (much less verbose) way of looking at it: at sufficiently high investment levels, "hedging" is indistinguishable from "hoarding".

Nope.

There is no set quantity of futures contracts. More speculation provides better liquidity. Lee, remember for every buyer there is a seller and vice versa. Long-term vs short term investors is irrelevant. What is relevant is having a large population of both speculators and hedgers.

Joe

P.S. And for traders what is important are the commissions charged. One of my good friends is a trader. Cheap commissions for the traders make the markets liquid. EX: 5000 bu Corn contract's minimum price change is 1/4ct or $12.50. My buddy's commission on that trade is $2.50. he can sit there all day long and buy and sell OR sell and buy and in some instances he doesn't care where the price is as long as the price is moving.

When I was a broker my commissions on ag contracts were $82 per contract. The market had to move 2 cts for my clients to breakeven. That is easier said than done.

Thinking about: that is what speculators do.. they dont' care if if the price of oil is $50 a barrel or $150 barrell. It is irelevant to their profit goals.

Rick Gooden
07-09-2008, 7:46 PM
Well, part right. "WE" can't do anything but buy the products that are brought to market. Profitable, and ONLY profitable technology will make it to the marketplace, SOOOOOO.... watch your wallets. Today's gas may seem cheap 10 or 20 years from now.

Would anyone like to foot the bill to place charging stations in one of the apartment complexes in YOUR town???

Today's gas may seem cheap 1 year from now. How soon will alternatives be on the market at a reasonable price for the masses to afford and in sufficient quantities to allow us to reduce oil consumption? Also, who's figures are we to believe? They seem to be all over the map. I hear that the speculators are the bad guys. Isn't anyone who buys futures a speculator? Should we also limit the profit margin that all companies make and say that 8% is the most you can make? As you can see, I don't have answers, just questions.