Thursday, April 20, 2006
What in the World is Going On?
Can anyone explain this to me? What is going on with freaking oil prices? I can understand how instability in oil production countries and uncertainty in the commodities market can drive up prices. However, can this level of elevated prices be justifiably sustained? Panic in 9-11 drove up prices. Then the GWOT drove up proces. Then the Iraq conflict drove up prices. Then Katrina drove up prices. Now events in Iran and Nigeria are blamed for driving up prices. It seems like it is just one excuse after another. Meanwhile, oil companies are posting RECORD profits. Not like they were losing money in the past, they are posting RECORD profits.
I've heard of Brazil's touted ethanol initiatives. They have received more and more attention lately as a direct result of oil prices. I have read articles where reporters ask why we haven't known about this. Brazil began these programs in the 1970s. How can we not have known about these programs? Was there someone suppressing research or efforts to start a similar program? Who knows?
The bottom line is: Are oil companies using fears of instability or uncertainty as an excuse to make money? When and if tensions die down, can we honestly expect oil companies to lower the prices? Now that they have seen that America is willing to pay $3.00 per gallon, what motivation would they have to lower prices? After all, after 9-11 paranoia dropped down to lower levels, I didn't see any reduction in gas prices. Can we expect any intervention from state or federal government to stop this escalation? Is there anyone there who will try?
posted by El Capitan at 10:21 PM
3 Comments:
Lindsay said...
Yes, the high prices will continue unless there is a huge drop in demand for crude (not gonna happen). The blame for high prices cannot be blamed solely on regional instabilities and the markets. There is a huge increase in demand from China and India...take a look at China's energy deals with Russia, Iran, and other Caspian nations...they are locking up energy resources like there's no tomorrow, and unlike the US, they are willing to deal with "unsavory" nations that have those resources. The producer nations simply can't keep up with this demand...OPEC is pumping at capacity...Iraq's infrastructure is nowhere near capable of producing enough oil to make a dent in prices.
So, are oil companies using fear as an excuse to make money? No, the price per barrel set on the world markets is largely out of their control. A majority of the world's oil reserves are controlled by state-owned companies (Aramco, Petroleos de Venezuela, etc), not companies like Chevron, Exxon, etc.
Intervention from state or the feds? Better to let the market decide, I think. The high prices will hopefully convince people to start using public transportation more frequently, and in turn force the government to finally invest money in our country's pathetic public transportation system. Sure, we could have had an ethanol initiative like Brazil, but when Carter preached conservation and alternative energies, people laughed at him and Reagan ripped the solar panels off the White House roof as soon as he got into office.
I think energy companies are unfairly blamed for high prices (and no, I'm not just saying that because they pay my salary)...there are simply way too many factors that are to blame for the high prices. High gas prices are here to stay, and Americans need to learn to adjust their consumption accordingly.
"Frankly Opinionated" said...
There was a time when I too was perplexed over high prices. I am more perplexed as to why people think that the government can or should "make" the oil companies lower their prices. Folks, if our government could make the oil companies lower the prices, they could also make you and I drive according to their wishes. This is a capitalist, consumer driven society. When we pull up to the pump to buy gas to go on a recreational venture; we are endorsing the price on the pump. Given, we must buy certain fuel regardless of price,(to drive to work, to heat, for commercial vehicles, etc); but any time we feel that we can buy "extra" gas, we are okaying continued high prices.
I am not a "green" thinker here, it is economics 101. Bill O'Reilly has suggested not buying gas on Sunday. While good in spirit, we would just buy our gas on Saturday or Monday.
The best solution I have seen would be for us to not buy any, yes, any, gas from Mobil/Exxon. Just boycott them, and do it with fervor; and when they aren't making sales, they'll have to lower their price. And then, don't go back 'cause they've lowered the price 8 cents or a dime. Make 'em suffer til they get to the price that you are comfortable with. Shell burns well, BP burns well, Phillips 66 is good gas. We Americans are just too damned lazy to pull this off, after all, our latte is in a store that sells Mobil/Exxon, how could we pick up our latte and then drive to another location for our gas. Waaaaaaaaaaah!!!!!!!!!!!!!! I don't like the high prices and have found other diversions for my recreation than those that require so much gas. It isn't the government- it isn['t even the fuel company! As Pogo sed: " We is the enemy here!"
I wouldn't mind the $3.00 a gallon if it were our own oil, and not have us suckling from the belly of the Islamofascists. Your lot and life is not George Bush's fault.
nuf sed
"Frankly Opinionated" said...
"Frankly Opinionated" said...
There was a time when I too was perplexed over high prices. I am more perplexed as to why people think that the government can or should "make" the oil companies lower their prices. Folks, if our government could make the oil companies lower the prices, they could also make you and I drive according to their wishes. This is a capitalist, consumer driven society. When we pull up to the pump to buy gas to go on a recreational venture; we are endorsing the price on the pump. Given, we must buy certain fuel regardless of price,(to drive to work, to heat, for commercial vehicles, etc); but any time we feel that we can buy "extra" gas, we are okaying continued high prices.
I am not a "green" thinker here, it is economics 101. Bill O'Reilly has suggested not buying gas on Sunday. While good in spirit, we would just buy our gas on Saturday or Monday.
The best solution I have seen would be for us to not buy any, yes, any, gas from Mobil/Exxon. Just boycott them, and do it with fervor; and when they aren't making sales, they'll have to lower their price. And then, don't go back 'cause they've lowered the price 8 cents or a dime. Make 'em suffer til they get to the price that you are comfortable with. Shell burns well, BP burns well, Phillips 66 is good gas. We Americans are just too damned lazy to pull this off, after all, our latte is in a store that sells Mobil/Exxon, how could we pick up our latte and then drive to another location for our gas. Waaaaaaaaaaah!!!!!!!!!!!!!! I don't like the high prices and have found other diversions for my recreation than those that require so much gas. It isn't the government- it isn['t even the fuel company! As Pogo sed: " We is the enemy here!"
I wouldn't mind the $3.00 a gallon if it were our own oil, and not have us suckling from the belly of the Islamofascists. Your lot and life is not George Bush's fault.
nuf sed