Oil was up over a dollar a barrel today breaking the $70 barrier. Gas will crack $3.00 a [edit] gallon next week and then may go higher.
I don't understand supply and demand. I'm an economics idiot. (I still remember my brother - as we were standing in line at 5:00 a.m. to buy Journey tickets - telling me in 1981 that it was important that I understand the "law of diminishing returns". I didn't then. I don't now. )
"Supply" should only be a factor if there are shortages. About 15 years ago there was a shortage of lumber - you had to wait to get it - and prices went through the roof. There is no shortage of oil.
"Demand" makes a little more sense. Prices are set at what the market will support. A star athlete is paid $5 million a year because someone is willing to pay it. With that being said, over the last 10 years most Americans would have paid more than the standard $1.50 - $1.70 a gallon because they had to have it. Yet prices remained low. So why the sudden rise in prices now?
I don't understand what is going on.
.jpg)
4.17.2006
But I'd Pay $10 For Good Salsa
Oil was up over a dollar a barrel today breaking the $70 barrier. Gas will crack $3.00 a [edit] gallon next week and then may go higher.
I don't understand supply and demand. I'm an economics idiot. (I still remember my brother - as we were standing in line at 5:00 a.m. to buy Journey tickets - telling me in 1981 that it was important that I understand the "law of diminishing returns". I didn't then. I don't now. )
"Supply" should only be a factor if there are shortages. About 15 years ago there was a shortage of lumber - you had to wait to get it - and prices went through the roof. There is no shortage of oil.
"Demand" makes a little more sense. Prices are set at what the market will support. A star athlete is paid $5 million a year because someone is willing to pay it. With that being said, over the last 10 years most Americans would have paid more than the standard $1.50 - $1.70 a gallon because they had to have it. Yet prices remained low. So why the sudden rise in prices now?
I don't understand what is going on.
Subscribe to:
Post Comments (Atom)
7 comments:
There is a shortage of light, sweet crude. Saudi Arabia oil fields are pumping at capacity and having to inject more and more water to keep extracting at current levels. When you do that, an oil field is in decline. When a field hits its peak, it is not a gradual decline, it is a steep decent.
They are also pumping more heavier crude. It is more difficult to refine into gasoline.
It is true that we will most likely never run out of oil. We will run out of easily extractable oil. It will always be around, but the price will continue to rise.
Ok, so the oil companies say that they are not profiting from the rise in gas prices but are posting record profits during record gas prices. Here is what really gets me, Oil goes up 1.00 a barrel, the cost of the materials just went up 1.8 cents per gallon. When I was younger and Granddad had oil wells south of Lubbock, we could not wait for Oil to cross that 30$ threshold when he made cash, and we had a nice Christmas. So the cost of Oil has gone up 40$, thats a 72 cent increase per gallon, I paid less than a 1$ a gallon when it was 30$ a barrel, where is the other 1.30 $ going.......
Barry, We would be very happy to pay $3.00 for a barrel of gas.
IT'S CALLED GOUGING!!!!!
You would think that if you just received a $400 mill retirement settlement that you could at least have your teeth fixed.
Actually, Barry, I just paid 15.95 for a gallon of Salsa from Casa Torres!!!!!! Best salsa ever!
I think our problem in the US has been having leaders with no vision. Our energy policies have not changed a whole lot over the last twenty years or so. We should perhaps look to Brazil as an example. They are predicting that they will be totally energy independent this year. They have done it by producing cheap ethanol using sugar. They have converted their cars to run on it etc. Even the gasoline is 25% ethanol.
Big change from 1973 when they were 80% dependent on foreign oil. The changes in the middle east at that time forced their economy into a recession and that's when they had leadership that started changes. And now look at them. Our leadership over the last 20 years have done nothing to make us less dependent on foreign oil.
Post a Comment