Rising price of oil

[shiarua]

I heard u liek mudkips


Oil prices are rising because companies are greedy assholes who want to exploit the market as much as they can before people realize this shit doesn't cost anything significant.

true dat. I actually remember reading on reddit a while back some oil company employee saying price of gas was going hit $5 by this (2011) summer. Many people didn't believe him, but sure enough, at this rate, it's going to hit that.

[kuronosan]

I'm amazed that people widely accept this is normal despite oil companies reporting billions of dollars in pure profit when gas was still $2.20 a gallon.

Oil companies were reporting these same profits back when I first got my driver's license, when gas was still $0.97 a gallon.

[Demosthenes11]

I got an invite on facebook about April 14th being "Don't buy gas day" but I believe resistance is futile.

I loved the response group to that. "Don't buy a Ferrari day! If we all don't buy a Ferrari for one day, they MUST drop the price!!!!"

Dumbest logic on that gas thing I have ever seen.

[Kuya]

Because they did that in the 70's and it caused widespread shortages.

Are you talking about 1973?

Also, i don't think an oil crisis over oil prices is that much more preferable over an oil crisis over a shortage given that the end result is the same. If speculation is going to arbitrarily raise prices even though there is no actual change in supply, then there should be regulation (assuming there isn't) in order to decrease the chances of crisis happening.

I don't like high oil prices because of speculation; regulate it.

[Jememy]

I go several days without buying gas.

Seems to not do shit.

My license was suspended 6 months and gas went up like 1.00/gallon if my math is right. I'm convinced taking public transit fucked the entire continent.

[Gwynplaine]

Speculation isn't "arbitrary". Speculators invest depending upon real facts and situations. If they don't they lose their money. Like I said earlier speculation isn't a primary cause, it's a secondary effect so your dislike is misplaced. If every piece of computer hardware were fried tomorrow with a remaining stock of 20 functioning computers guess what, their value is going to rise. It's a cold hard fact that won't care about any regulations or your personal feelings.

[Kuya]

The argument is, that no actual shortage of oil exists thus the speculation that its price will rise is unfounded, and coincidentally also harmful because of the sorts of panics and forms of instability it can cause. It is absolutely something to worry about and something that i believe necessitates regulation. Because ultimately, speculation should serve what benefits societies, and if it so happens that speculation runs counter to global stability, then it needs to be regulated.

[Kuya]

And calling speculation a hard fact when based on rumours and supositions is pretty funny in a diabolical way. And then to state that it does not matter what i feel as if the actual troubles it causes people to have gas prices so high were somehow irrelevant and not enough reason to justify an intervention. What are you some sort of neoliberal? (don't answer that)

[*Shinzon*]

If we as American's invested more in diesel tech like the rest of the world for the short term, we'd be getting better gas mileage and wouldn't be as dependent or could at least start to ween off. American's still aren't buying into diesel for whatever reason. Diesel prices have been a bit more stable than gas and might help relieve some of the speculation.

[Gwynplaine]

The argument is, that no actual shortage of oil exists thus the speculation that its price will rise is unfounded, and coincidentally also harmful because of the sorts of panics and forms of instability it can cause. It is absolutely something to worry about and something that i believe necessitates regulation. Because ultimately, speculation should serve what benefits societies, and if it so happens that speculation runs counter to global stability, then it needs to be regulated.

While there's not a shortage, demand is increasing and as everyone can see the situation in the Middle East is extremely uncertain. And so the expectation is that oil will cost more in the future. I mean duh, does anybody really not think oil will cost more in the short term?

What does it even mean for speculation to "serve society" and run counter to "global stability"?

And calling speculation a hard fact when based on rumours and supositions is pretty funny in a diabolical way. And then to state that it does not matter what i feel as if the actual troubles it causes people to have gas prices so high were somehow irrelevant and not enough reason to justify an intervention. What are you some sort of neoliberal? (don't answer that)

Instability in the Middle East, increasingly modern emerging nations, inflation, and not enough new production to meet demands are not rumors and supposition. They're the prime cause.

I'm not saying I don't care people have to deal with it, of course it sucks, no one wants to pay for expensive gas. I'm saying it's not useful as an argument because the supply is gonna be what its gonna be regardless.

[Kuya]

You seem to have a disconnect here, and i believe you seem to reflexively assume that if speculators cause the rising of a price (you will insist on disagreing that they cause it, no doubt, even though they directly cause it) then it must mean that the reasons respond much the same way as supply and demand.

What i'm trying to tell you is that: unless instability in the middle east, increasingly modern emerging nations, inflation directly causes this rise in price then the reason why the price is rising is because of suppossition by speculators that these factors will effect the supply (and demand) of oil. This is what speculation means.

Everyone can see that the situation in parts of the Middle East is volatile, and they suppose this might affect oil supply; yes, this is part of the process of speculation. People PERCEIVE that the supply might be affected, and this also might effect the demand. But did the supply actually change? I understand that it did not. And what does it mean for speculation to serve society? I'm not sure myself. I understand that financial markets are supposed to quickly deliver investment towards projects and therefore increasing market efficiency and the products available in markets. How speculation benefits us is not something i'm unaware of. And global stability means people not flipping out over prices and demanding their politicians do something about it.

But i'm starting to get the feeling that this argument over whether speculators directly cause rises in the price of oil or not is irrelevant, since whether they do or not, governments should probably still regulate it if it means decreasing all this agony over gas price.

[kuronosan]

Speculation isn't "arbitrary". Speculators invest depending upon real facts and situations. If they don't they lose their money. Like I said earlier speculation isn't a primary cause, it's a secondary effect so your dislike is misplaced. If every piece of computer hardware were fried tomorrow with a remaining stock of 20 functioning computers guess what, their value is going to rise. It's a cold hard fact that won't care about any regulations or your personal feelings.

There's a difference between that remaining stock of 20 computers and the current oil situation, which is akin to the "supposed" shortage of PS3s and Wiis. It's artificial demand, which creates dangerous situations for the sake of money.

If we as American's invested more in diesel tech like the rest of the world for the short term, we'd be getting better gas mileage and wouldn't be as dependent or could at least start to ween off. American's still aren't buying into diesel for whatever reason. Diesel prices have been a bit more stable than gas and might help relieve some of the speculation.

Because there's no money in Diesel as 90% of the country is capable of making its own Bio-Fuel.

[Delenn]

Here's a relevant/compelling/recent article:
http://www.cpeterson.org/2011/03/10/...its-not-libya/

It's long, but I found it to be a good read.

I'd search for 'briefly recap' and read that section first, then the conclusion, then the bold sections if interested, then read the whole article if still interested.

[Vuitton]

I just wanted to toss these stats into the thread and throw out my opinion:

http://www.eia.doe.gov/tools/faqs/faq.cfm?id=36&t=6

How much oil does the United States import?

The U.S. imported approximately 11.7 billion barrels per day of petroleum in 2009 which accounted for 51% of petroleum consumed in the United States. "Petroleum" includes crude oil and petroleum products. Petroleum products and their relative share of total U.S. petroleum consumption in 2009 were gasoline (48%) and diesel (17%).

In 2009, the top five source countries of U.S. petroleum imports were Canada, Mexico, Venezuela, Saudi Arabia, and Nigeria.

So, in 2009 of the petroleum the US imports, 17% of the imports came from the Persian Gulf countries. 48% came from OPEC countries. Libya, Saudi Arabia, Algeria, Qatar, UAE, Iraq, and Kuwait are considered OPEC countries according to the below list. This list does not break down who the Persian Gulf countries are but logically it should include Saudi Arabia, Qatar, UAE, Kuwait, and Iraq. This list also breaks down how much we import from each country current to January of this year. We don't import much from Libya. The top three are Saudi Arabia, Algeria, and Iraq.

http://www.eia.doe.gov/dnav/pet/pet_...im0_mbbl_m.htm

Based on the fact that the US imports roughly half of its oil, and of this imported oil, roughly half comes from OPEC, then I find it reasonable to believe that the current unrest in north africa and the persian gulf are the cause of the increase in gas prices due to both instability of the flow of oil and also speculation. I believe most of it is from speculation as the only country to have disrupted oil production is Libya, and we don't import very much from Libya.

Edit:

tables didn't copy over right. please see the first link for the break down of the US's net imports. the second link is a breakdown of every country.

[Gwynplaine]

You seem to have a disconnect here, and i believe you seem to reflexively assume that if speculators cause the rising of a price (you will insist on disagreing that they cause it, no doubt, even though they directly cause it) then it must mean that the reasons respond much the same way as supply and demand.

I don't disagree that speculators actions move to raise the prices of things like oil (their actions are also responsible for the prices lowering but that never seems to make headline news). I'm saying that they're not the most basic cause, which is the changing economic/political situations that could have big impacts on future prices. They do so because they understand that lower supply in the future means the same or more demand chasing less goods.

What i'm trying to tell you is that: unless instability in the middle east, increasingly modern emerging nations, inflation directly causes this rise in price then the reason why the price is rising is because of suppossition by speculators that these factors will effect the supply (and demand) of oil. This is what speculation means.

Everyone can see that the situation in parts of the Middle East is volatile, and they suppose this might affect oil supply; yes, this is part of the process of speculation. People PERCEIVE that the supply might be affected, and this also might effect the demand. But did the supply actually change? I understand that it did not.

The fact that there's such great potential and uncertainty for the future is enough to cause speculators to suspect there will be. Gaddafi could set fire to oil fields potentially at any moment for example, or civil unrest could upend Saudi Arabia having huge impacts. It's no different than decisions people make everyday to try and figure out how to plan for the future. In fact, if you personally suspect oil will be more expensive today than tomorrow, or at this gas stop versus downtown, you're effectively speculating about the future. Hoping to make the right judgements so you can plan effectively.

And what does it mean for speculation to serve society? I'm not sure myself. I understand that financial markets are supposed to quickly deliver investment towards projects and therefore increasing market efficiency and the products available in markets. How speculation benefits us is not something i'm unaware of. And global stability means people not flipping out over prices and demanding their politicians do something about it.

Without investors such as speculators to help reveal the actual quantifiable value of a good, then the good would be over or undervalued. Imagine if oil were actually worth $200 a barrel but no one was interested in pointing it out, so it remained at $50. Yay cheap gas! Except that when something is undervalued and demand remains the product gets consumed much faster. And then you get shortages, just like Nixon's 70's oil price controls.

The reason some people flip out over oil prices is because they just dun like it and want a scapegoat. But if they understand how things functioned maybe they would appreciate speculation more and flip out over regulations and price controls instead. You can outlaw gravity all you want, but reality doesn't care and it's gonna continue persisting.

[Kuya]

I understand how speculation works, and i want oil speculation regulated. So it seems your hopes are unfounded. And i still find it funny how you insist on equating speculation to some sort of fait accompli/natural order of the universe sort of thing. No doubt you mean to imply that it's something we cannot change and we should accept, and no doubt you're also a free marketeer (or close to it).

The whole 'the market is a natural phenomenon' is part of the free marketeer trope and also their justification for why regulations should not exist. Except that certain marketeers, especially neo-liberals, like to take it a step further and imply that playing with money is also some sort of natural order, which i imagine even libertarians find suspect.

[Dimmauk]

I read that we are buying less gas as a nation, and the price of gas is still climbing. Kinda scary.

Also, the fuel lines for the diesel trucks at my wife's work were cut, and the gas was stolen.

Its only a matter of time till we are running around in Hockey masks and ass-less chaps.

[Headspace]

Kuya, you Just dont understand. Speculation helps lower prices.

K-ROLD

[Anton]

Couple separate points:

-Nothing pisses me off more than pump price changes because of "the tensions in the Middle East". There's always tension in the MidEast. Just because it starts making the news doesn't mean your distribution is gonna be boned, or reserves are dried up, or anything. The price hike at the pump is 100% spec-driven cash grab while the getting is good. Fuck that.

Besides, the US gets the bulk of its oil from Canada and Mexico. Libya is such a small amount of US imports that it should make absolutely no difference, yet my gas is up 6 cents a litre. FUUUUUUUCK That.

-Diesel in Europe is cheaper than gas. My guess is the bulk of the gas is shipped to North America while the bulk of the diesel is shipped to Europe IE. pre-existing trade agreements causes it to be so. Hence, more diesel cars in Europe. Who'd have guessed that gas engines hoover fuel compared to diesel counterparts?

-The last time Canada tried oil regulation was under Trudeau in the 1970's. The end result was hour-long pump lines all over toronto because, at the gov't mandated price, oil companies weren't going to sell at every gas station or in the same quantity. So regulated prices are dumb.

-It's worth noting that natural gas(not gas "oline", not oil) is available in such stupidly high quantities that the market has been flat for the last 2 years. Do you remember the Shell commercial with the guy in the diner watching his kid suck the last bit of milkshake with the bend-y straw? Well somebody designed a gas drill that can do the same thing, basically reopening every old natural gas well and finding a retarded amount on the sides of the drill well. We're gonna have natural gas for a looooong time.

[Melchiah]

My solution doesn't fix prices, it only makes it more difficult to create an artificial shortage to exploit.