Posted on 11/30/2004 7:25:27 AM PST by Toddsterpatriot
It means that, contrary to the predictions of the doomsayers on the left (who have predicted shortages of everything from oil to copper and other metals), commodity prices, when adjusted for inflation, have remained steady or fallen over the past 30 years. In a reasonably free market, there is no "ripping off" of either party -- the buyer and seller agree on the price. A significant percentage of the absolute price increase over the past decade can be blamed on the government, due to higher gasoline taxes, and to environmental mandates requiring refineries to produce special formula gasolines for specific markets. Instead of mass-producing one type of regular unleaded, to be sold across the country, refineries must make smaller amounts of many special blends. This increases production costs, and also increases the risk of price spikes if there are facility problems at a refinery.
This is Non-Issue.
Be glad you live in this great country, with great, efficient corporations that provide goods and services at the lowest cost possible....
It was in the $10 range in the late '80s.
He could have told them that price gouging would not be tolerated. Set the Justice Dept to investigate this(instead of watching head shops), thereby causing second thoughts amongst the crooked enterprises. That would have gone a long way to keeping prices at least slightly lower, and would have been the miminum required.
I understand what your saying and agree with most of it; even though you haven't answered the question directly.
But if that's true, then why not a gradual shift in price?
When the price dropped to around $10 a barrel, the big boys just consolidated power. It is the same with the EPA regulations. They complain about them, while silently cheering. It chased out nearly all of the independent stations, as they could not afford to replace the tanks in the ground yet again.
A recent ForbesMag columnist calculated a ten dollar / barrel premium on the Guvment's buying spree for the Strategery Reserve, which will go on through early '04, apparently, when the tanks will be full. Just another IOU Dubya is paying for Clintoon. As oil falls, look for various other current hysterias to settle, including the dollar, inflation, etc.
DOMESTIC production, dummy.
Despite political promises to make us less dependent on imported energy,
domestic oil production has steadily declined from 9.2 million bbls/day in '73 to 5.4 million bbls/day in '04.
Imported oil, OTOH, has skyrocketed to over 10 million bbls/day, making us dependent on foreign nations for 2/3 of our supply.
(source)
You asked if, prior to the high prices, American consumers had been "ripping off" the oil companies. My answer was no, in a relatively free market, there is no such thing as "ripping off" the other party in the transaction. Buyer and seller agree on price.
But if that's true, then why not a gradual shift in price?
A few reasons. First, like the stock market, some of the price movement is due to the action of speculators. Second, an unexpected, temporary drop in supply (due, say, to a hurricane hitting an oil refinery) will cause a sudden spike in price. Also, in the gasoline market, there is a very tight balance between supply and demand. It is not as if people can stop buying gasoline entirely if the price increases. So it takes a proportionally higher increase in price in order to bring demand into line with the available supply.
Nice try Willie, here's what you said:
"You mean how globalism reduces productive capacity to drive up prices for those commodities?"
How does increasing oil production in a global market equal reduced productive capacity?
You really think we could produce 9.2 million bbls/day in the US now? Or 15.4 million bbls/day?
Oil is very near $50 and trending up.
Exactly what do you think the GW has to do with oil prices? If you want to blame someone, blame Clinton for allowing BP to sell Alaskan crude to Japan, ensuring that Alaskan crude trades on the world market. But even that is a difficult relationship to prove.
The best way to protect yourself from oil price increases is to buy stock in an oil company. Conoco-Phillips stock has more than doubled this year.
Reduced DOMESTIC productive capacity.
Increased global production undermines domestic sources which are subjected to more stringent environmental regulations.
I cited refinery closings, but Toddsterpatriot "wisdom" denies that refineries have anything to do with petroleum production.
You really think we could produce 9.2 million bbls/day in the US now? Or 15.4 million bbls/day?
I think we can produce more than we do by drilling offshore and in ANWR, though not enough to completely offset imports. However, we can also significantly reduce our consumption by constructing electricly powered mass transportation systems in our more densely populated regions and urban areas: light-rail, high-speed rail and Maglev. It is not a panacea, but constructed over a period of time, such technology WILL make our transportation infrastructure less dependent on imported oil.
Ok Willie, if domestic oil production drops 1 million bbls/day and world production increases by 3 million bbls/day and consumption remains the same, what happens to the price?
I cited refinery closings, but Toddsterpatriot "wisdom" denies that refineries have anything to do with petroleum production.
Willie, this sounds silly, even for you. Refineries have nothing, as in zero, to do with oil production. We could triple refining capacity in the US and that would add not one barrel to our domestic oil production.
I think we can produce more than we do by drilling offshore and in ANWR, though not enough to completely offset imports.
Whadda ya know, we agree. I don't agree with your train ideas but more nuclear wouldn't hurt either.
It increases because we've become less productive and the trade and budget deficits combine to devalue our currency.
Wow!! An extra 1 million bbls/day will cause our currency to be devalued? That will have a larger effect than an extra 2 million bbls/day sloshing around the world oil market? Interesting theory with no basis in fact.
How about if we produced all 16 million bbls a day we consume and then the Saudi Arabia's oilfields and pipelines were destroyed. What happens to the price of our oil?
It was custom designed to match the reality of your hypothesis.
I guess supply and demand is a bit over your head? Maybe you have a cute quote from Marx about that?
Not at all.
You just erroneously assume that I take your babblings seriously.
Our petro-dependence isn't a simple short-term issue of economic supply and demand.
Global depletion in a long-term issue with severe national security ramifications.
Check this out, Willie says globalism reduces productive capacity for a global product, then he says he meant domestic production.
Then he tries to claim refineries have something to do with oil production. He doesn't understand supply and demand. I'm getting worried about him. Always talking about trains....Isn't one of the symptoms of Alzheimer's reverting to childhood? I'll bet when he was a kid he had a nice Lionel set under the tree. What do you think?
Can we get a neighbor to check on him?
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