I’m one of those that snickers at the DOE. Somehow I see them now as a PR extension of big oil, not a gov agency serving the public that is really in touch with the world as it exists.
I can say only what I’ve seen. Global demand isn’t going to necessarily increase so very dramatically for oil as some “investment advisors” are claiming. Brazil and China - They are both moving away from oil so fast it makes my head spin. China, ok, also burns a lot of coal. With the US dollar shrinking dramatically gas prices may stay high indefinitely (when has it ever really gone down??), but the price of oil per barrel is right now teetering on the tip of a speculative pyramid that I don’t believe can balance the load much longer. I believe in cycles, but I believe in getting out before the downturn. With electricity somewhere below 3cents per killowatt in China and Brazil, I wouldn’t count on the growth in oil demand. We seem to have this mentallity as of late in the US, that downturns are fictional and people just keep speculating away. I don’t get it. It’s happened at least once a year for the last 8 years where a major player in some hot industry just fell down, the bottom fell out of the market they were manipulating. Gee, wonder why that is??
I agree that $4-5 per gallon gasoline is a good thing, but I think the person who started this stream was complaining about why is diesel fuel shooting up in price. I saw another stream about this on Cartalk Central. I’ll have to read it. I too, don’t understand why diesel has suddenly shot up.
As the US goes into recesssion? I think the US is in full fledged recession. And I don’t blame it all on the price of oil. With a dollar worth 20% less than a year a go (internationally) and the real estate market in shambles, and what was possibly one of the big 5 brokerage firms just reduced to rubble, I’d call that recession, maybe even worse, and not a fault of the rise in oil prices.
Why the sudden PANIC everyone? Cheaper, better resources have been available for over 100yrs. now. The question is, when is America going to get caught up w/the rest of the WORLD. The Romans consumed a lot of resources to without much concern. The Middle East and surrounding counrty’s have been paying 4.00-5.00/gallon for Petrol for over a decade.
There is a bigger picture here and maybe you are right about a separate website. Maybe enough Americans would care. Really, look at the old “hot rods.” Bigger is better. Really? We are all paying for it now.
I hope ya’ll have enjoyed your bigger cars. What were you thinking?
“I disagree with you that gas prices will actually go down; they may stop going up and reach an expensive plateau of about $5-6/gallon which will change the car market for good and spur development in diesel hybrids, plug-in hybrids and bring back very small commuter cars.” I think you are correct in this…
We are at “peak oil” you might want to Google that term… If a global recession leads to reduced demand, OPEC will simply reduce supply to prevent a price collapse. They can no longer INCREASE production, but they can quickly reduce it. The days of cheap oil are OVER.
The OP talked of a boycott…Good luck. At the refinery level, the oil companies all trade product, they don’t CARE what “brand” you choose or avoid. All the majors also market under many different street names so boycotting one brand makes no difference to them. The major oil companies are getting out of the retail business, selling their stations to big distributers who can brand them any way they want…The big money is made at the production and refinery level, not retail street trade…
There are few “American Oil Companies”. They are all multi-nationals who do business all over the world. They sell their #2 oil to the highest bidder. It that bidder is in Germany, that’s where the product goes. If that means the price of diesel fuel goes up in Buffalo, N.Y. that’s just the free market at work…You will have to bid more than that guy in Germany, using your rapidly fading dollars…
Remember when Ross Perot ran for President?? We should have listened to him because everything he said is coming to pass…
On the futures markets, gasoline went up .11 cents today and diesel .13…
I do understand ecomics thank you (referring back a page), and I do understand global economics. We as Americans tend to focus on the US much too much. Speculation in the US has driven up the price of oil as much as anything has globally. Stoppping speculation isn’t a hard thing to do. And I for one, would be for it on food and fuel commodities, two areas that I don’t think speculators should profit on. And before you all start calling me names again, a little government control in the right areas is good thing. Just keep them out of our homes. Any of you short Japanese stocks??? No, it’s not allowed. Cut the greedy out of the equation and let the rest of us get on with life. We are all relatively happy right? We just need to educate those who are wasteful with energy (good luck, they see it as confrontation, not eductioni), and put a little fear of consumers back into the equation. I really agree with the person who said we in the US fear our goverment, and governments in Europe typically fear their citzens. Corruption has been around forever. It’s the citizens that make the difference. Hold those who are in control accountable and change will come. And get on with life. And those of you who think personally insulting others in a blog or chat is quite ok, get a grip. It’s not. Educate, don’t insult.
I have to confess I get sick of this kind of thinking. Do I enjoy paying $4 for gasoline? No, of course not. However, I don’t place the blame on evil oil companies, either. I place the blame on myself and my fellow Americans for not driving the most fuel efficient vehicles possible. Yes, I’m talking to you who drive the 4WD Tahoe, Suburban, Hummer, or other insanely large SUV. I’m no tree hugger, but I am for reasonable consumption. We have this mentality in this country of being somehow “entitled” to cheap everything, and that only encourages waste. All of the high fuel prices right now are basic supply and demand. We can get all the fuel we want (demand), but the supply is constrained right now (only so much oil coming out of the ground). Therefore the price goes up. If we would all reduce our demand, the prices would go down.
I also want to comment on the so called evil oil companies and their record profits. Anyone with even a basic knowledge of corporate finance can understand the concept of rate of return on invested capital. ExxonMobil and all of the other oil companies, despite their efforts to be touchy feeley and concerned about the environment, have zero real obligation to us as consumers. They work for the shareholders, who demand Exxon provide a maximized rate of return. Exxon happnes to have access to and expertise in locating and refining oil products into gasoline, etc. They make a certain rate of return on that. However, if tomorrow Exxon found out it could send that oil into outer space for aliens to consume and make more money (higher return) on doing so, I bet you they would at least consider it. That explains why they haven’t invested in new refineries, etc. or any other so called “consumer friendly” improvements in the past 30 years. They can make more of a return on investment on what they are currently doing.
The proposed windfall profits tax, which is only a feel good means to stick it to what we citizens perceive as the source of high fuel prices, will only serve to limit oil supplies. We saw this in the 1970s. If an oil company is only “allowed” to make a certain profit off providing gasoline, why would they consider producing any more above that amount? They would literally lose money producing what the market demands if it generates “unreasonable profits”. And just who determines what profits are “unreasonable?” Would we even care about oil company profits if gas was still $2 a gallon? I doubt it.
Sorry for the rant. I just feel we have a real dearth of financial and economic knowledge in this country, and I get sick of reading this kind of stuff. We are part of a larger global economy with larger forces at work than our Congress can solve immediately. We Americans have to learn to accept that and go on. This is part of the price we pay for our cheap Chinese-made widgets from Wal-Mart.
Bravo! My sentiments exactly…another thing encouraging waste is the prolific extension of credit and the abuse of it, but that’s another issue altogether.
Americans(second Roman Empire) have been fat, dumb, happy, and complacent for too long. These (now) reasonable gas prices will perhaps stir our brains/ingenuity again to diversify the sources of our energy needs. The old adage of not keeping all of your eggs in one basket is so true! Let’s get off of this fossil fuel dependency once and for all and catch up with the rest of the world. I’m sick of the blame game also…
We are at “peak oil” you might want to Google that term… If a global recession leads to reduced demand, OPEC will simply reduce supply to prevent a price collapse. They can no longer INCREASE production, but they can quickly reduce it. The days of cheap oil are OVER.
And how long with that recession last?? 1-2 years TOPS. Then we’ll start to see rises again…And with India and China experiencing major economic growth they’ll be the biggest buyers of oil within 10 years…And you can expect to see gas prices really start to rise…$10-$15/gal is NOT out of the question.
Agree that the Roman Empire did not collapse because of a lack of resources. It just became dumb, fat and happy, and apathy instead of vigilance caused its demise.
The US is curiously in the same position; although vigilant in some aspects, its citizens by and large want it all without effort. It used to be that just aggressive trade unions bahaved that way; now nearly everyone, including government employees expect this level of unearned entitlement. Maybe adults should watch reruns of “Little House on the Prairie” for a reality check.
A luncheon speaker (an authority of energy matters) the other day showed a combination of bar chats and photographs of citizens in the developing world, some riding a bike, next a motorcycle, then a small car, then a larger car. The total population of these countries was about 3 billion! Over 8 times the US population.
The driver in oil and gasoline prices is not just the US consumer. Gasoline consumption in the developed world (US, Canada, Europe, Japan, etc.) will stagnate in the next 10 years according to our speaker, as higher prices reduce driving and smaller cars take a hold. But these other 3 billion will still want our lifestyle. Even with a frugal minicar, they will eventually try to consume 3 times the gasoline the US uses right now!
Over the last year our family bought $4586 worth of goods from China alone, excuding food items. Multiply that by 100 million families and you get $458.6 billion of imports, which allows the Chinese to improve their living standard, and many to buy their first car.
I’m not suggesting we boycott Chinese goods, but the Chinese know exactly how Japan, Hong Kong, Singapore and Taiwan got rich, and they are determined to follow their example, only faster!
Thanks to lively discussions and considerable differences of opinion, I believe the quality and information of these forums has improved a great deal. A year ago a very large number of posts denied there was anything approaching and oil shortage, and the US could easily be self-sufficient in a year or two. They also believed the Middle East was to blame for high prices, since they saw it as the source of most imports.
Many also believed it was their democratic right to burn as much gas as they wished, but the price should stay low! Many also believed small cars were death traps, in spite of watching pint size Formula 1 cars crash at over 100mph with the driver walking away.
The concept of commodities, including oil, being global is now more accepted as well. The low opinion of Japanese cars has improved as well, and we now recognize that US car companies no longer run the show.
Thanks all for the contributions and informative ideas!
Very good logic and an excellent rant, except for one thing I don’t understand? Greed fuels speculation, right? Is there one economist you’ve read that disagrees with the concept that speculation is a large part of the current oil prices, and that big oil also is profiting like never before? Have you read their earning reports? Evil oil companies? Evil maybe was a bit over the top, maybe not. I don’t think they are acting in our nations self-interest or in our interest as citizens or customers, or in a nation of small businesses interest. Corporate morality? I thought I rememembered that phrase from my youth? Did that phrase disappear with our constitution? It’s ok to be as greedy as one can be? Is that the mentality we are supposed to look up to for direction?? Greed is ok, if the stockholder make money, even for near molonopolies? Granted we need to drastically cut our usage of energy as a nation. BUT, some corporate behavoir has gone awry. Was the tobacco industry justified in the profits they made for their stockholders? I don’t think so. And I don’t think oil companies are justified either. They gave away that right when they were approved as near monopolies. There is still right and wrong behavoir. And we need to communicate and open our minds to new ideas when necessary, not spout economics from the 8th grade (not you, but others). The world has changed. We have not. Let’s try and catch up. It might require some creative thinking. Don’t nail me to a cross for suggesting possible change that might just educate people a bit if nothing else.
The oil companies are reaping record profits because of the sheer volume of product they sell, without having to build more refineries, pipelines, etc. The profit margin as a percentage of outlay is fairly modest, however. Their only obligation is to turn a profit for their shareholders. They do not, and should not, conduct foreign policy on behalf of our government.
We, the consumers, can only vote with our wallets.
I started this stream and I should be the one to end it Doc.
1.) Japanese car quality improved 30 years ago, lately (the last 4 years), their quality is slipping again.
2.) US Auto companies have been out of the loop for 40 years, and I think the ninth round bell has rung a while back. It’s long over.
I believe it is others rights to burn as much fuel as they want as long as they pay for it and they can afford it. I conserve as much as I can. I don’t think we as citizens should be looking to limit each other. That said, I think it’s about time as a nation of citizens we start looking to improve our goverment and our corporation’s behavoirs. We are quickly isolating ourselves as a nation of the uninformed and out of touch. Let’s all work to communicate and educate each other. Rampant corporate greed is not ok if left unchecked.
I also believe that speculation on commodities such as fuel oil and food is immoral. It only hurts the poorest people.
Let’s all do our part. Get involved, educate the ignorant. Stimulate the apathetic. Learn, learn, learn. To change with the times!
So it’s ok for our goverment to conduct foreign policy based on behalf of our oil companies? Just asking your opinion.
We the CITIZENS can vote in many ways, not just with our wallets. We still have the right to speak, organize, and effect change. And we still can vote in elections.
No, I think it’s appalling the way our government panders to the interests of Big Business, to the apparent detriment of the nation as a whole.
I wasn’t speaking of political action, only consumerism. When it comes to dealing with large corporations especially, money talks…well, you know the rest!
If I heard correctly on the world news tonight, any “change” that America does to try to get away from oil isn’t going to affect the price of oil. We’re not the only country using it.