Fuel Prices

[Phillyfanfrombirth]

Prices ran higher... aggregate demand dropped by up to 4% (which is stunning without an accompaning recession)... People were FORCED to conserve, not by law... but by necessity.

THIS is how markets work.... and they did, again.

Now, if you are saying that the price rise in oil was/is unwarranted... then we could agree on that. Just as housing markets that doubled in the past year are unwarranted (Where's the congressional hearing on that one?)... but that is also a function of the markets, speculative bubbles based on assumptions of no risk and tremendous rewards, pop.

We do need tremendous amounts of additional refining capacity... without a decade worth of red tape to get it started... I'll agree there, but we also need access, period.

I also love the argument, "yeah but that will take years".... had ANWR drilling been passed in 2001 when it was introduced, we'd be seeing production within the next 24 months... The delay tactics are part of the reason we are in this situation.

As far as gasoline... don't think it is going anywhere anytime soon.

Between coal gasification, Oil sands, and oil shale... all of which are profitable below $90/barrel... we have enough DOMESTIC capacity to fill our energy needs for the next 500 years.

As far as Exxon Mobil... check out their profit margins, or any major oil producer... you'll be surprised as what you'll find.

Also on that point... where was the contempt when oil was $10 a barrel after Russia and other Asian finances collapsed in 1998? Time and time again, people wish the government to do the work of the markets... and time and time again, the government screws it up. Check out the 1970s fixes, many of which are being bantied about now, and see how well they worked.

Then check out what happened in the early 1980s that changed that...

Its pretty clear.

[Unit 5302]

I agree, the red tape is ridiculous. That being said, nobody really knows how much fuel reserves we have. I don't necessarily think our current energy sources and production are the best we have to offer right now. How unstable is nuclear waste? Why can't we just blast the stuff into space? LOL. Sounds a little goofy, but you would think it wouldn't be all that expensive, plus so long as we don't have meltdowns, it's easier on the environment.

Exxon-Mobil's profit margins are not out of line with many companies. That being said, the profit is not being dictated by the market, it's being dictated by the oil companies, and it was approximately 2-3 times greater than what it had been. As far as the impact increasing the price had on consumption... the entire economy took a hit with the hurricane, and hundreds of thousands of people were not driving. To link the consumption drop directly to the increase in price is impossible.

Why are you asking me questions that you know the answer to? Where was the contempt when crude was $10 a barrel? People don't complain about things being too cheap, unless you're trying to sell a Mustang in Autumn or Winter, lol. Oil was too cheap, in all fairness. The oil companies were still making about $0.20/gallon profit on gasoline at that time, though. It's right about what they're making at the moment, by my calculations. OPEC finally got their act together and started cutting back production in unison. Though they were originally targetting no higher than $30/bbl I think they're liking the profits on the $50+/bbl so I don't think we'll see a signfiicant drop in price until demand falls greatly.

I'm not saying that the US government can fix the economy with legislation. I'm just saying that congress is doing what they are supposed to when they listen to the taxpayers complain. It certainly would have gone a lot smoother had the oil companies not basically flipped the bird at congress and the American people even though they had the right to do so.