Posted on 04/18/2006 8:09:46 AM PDT by ex-Texan
WASHINGTON (Reuters) - President George W. Bush said on Tuesday he is "concerned" about high gasoline prices, and pledged that the U.S. government will keep a close watch out for profiteering.
"I'm concerned about higher gasoline prices," Bush said at a Rose Garden news conference to name new staff appointments.
"The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that," Bush said in unprompted remarks about energy prices.
U.S. crude oil futures hit a record of $70.88 a barrel on Tuesday on fears of supply disruptions in Iran stemming from its nuclear standoff with the West, as well as lingering outages in Nigeria.
U.S. retail gasoline prices rose 10 cents last week to average $2.78 a gallon, up 29 cents over the last three weeks and 55 cents higher than a year ago, the government said on Monday.
Bush said high crude oil prices, rising summer driving demand and a switch to new motor gasoline standards is keeping gasoline prices high.
"It's tight supply worldwide and we've got increasing demand from countries like India and China, which means that any disruption of supply ... (is) going to cause the price of crude to go up," Bush said.
More drivers will take to the road this summer, which will also boost demand, he said.
"At this time of year people are beginning to drive more, getting out on the highways, taking a little time off," Bush said. "That increasing demand is also part of the reason the price of gasoline is going up."
Prices move in relation to supply and demand, not just supply.
The only way that gouging can be accomplished is collusion by all competitors in a market. If that's not happening, then there's no gouging.
Bush is as concerned about the price gouging as he is with the unsecured southern border.
Yeah, we've heard that several times now..........
Regulation is, of course, a lousy idea. But regulatory curbs on commodity price gouging can be invited by companies that are heedless to societal dependence.
And there is no comparison to food, clothing, and housing. Unless, of course, you are contending that these three generic categories of otherwise widely variable goods are mined, refined, and distributed by only a handful of producers with the expertise and enormous capital necessary to do so.
I am more interested in price gouging for bottled water.
Those are all good ideas but I'd add that we have plenty of proven oil reserves right off our own coasts that are locked up by the enviros and NIMBYS. What I really hope comes from all this is a realization that America cannot depend on foreign energy supplies. That's been apparent since 1973 but we simply don't seem to get the message.
When a tinpot terrorist like Ahminejad can realistically threaten our way of life by jawboning about sinking a few ships in the Strait of Hormuz, we're the problem, not him. We simply have to bite the bullet and pay whatever it costs to transition from dependence on enemy-owned oil to our own resources: oil shale, biomass, ethanol, whatever. We have the ingenuity and resources to do it. All we lack is the unity and willingness to put up with some temporary discomfort.
We don't live in never-never land.
Reality is what it is.
Prices go up when demand exceeds supply.
Period.
The limiting factor in gas supply right now is refining capacity, and that ain't going to get better for a long time, because nobody wants a refinery in their backyard, even though they all want gas.
A rise in price causes demand to decrease to the point it matches supply: when gas prices go up, people buy cars with better gas mileage and start car-pooling, which decreases demand.
Artificially depressing price causes demand to chronically exceed supply, which eventually results in shortages. Shortages lead to rationing. Rationing leads to corruption.
Bottom line is, what do you trust more? The free market system, or government bureaucracy?
Government bureaucracy has caused health care costs to increase from 1% of GDP to 15% of GDP in the last fifty years.
Government bureaucracy has created dangerous inner-city public school systems that resemble prisons rather than places of learning and cost $10,000 per year per student, half of whom are functionally illiterate at graduation.
The choice is up to you.
I'm not against it, at some point...When the line from profits from doing business and robbery becomes blurred, I'm for regulation...
Thank you for a voice of sanity instead of the Old media pretending to be the consumer friend. Look to China and India, the new big and growing consumers of oil. If you really want lower prices then do something to keep these countries from increasing their consumption at a rate that far exceeds our own. Solution--stop buying products made in China and India.
There isn't much little 'ol me can do about the market, is there. Maybe if I had Soros' money... As I said, I'm sure my broker is managing my porfolio well. He has never let me down yet. From what I hear, it's not a good time to sell, prices are probably going to go even higher in the June market. Traditionally, prices fall during the winter and climb for the summer. There is no reason to expect this trend to change.
Markets have collective memories. The participants therein invariably argue as follows: the last time event X, or something like it, occurred, supply did Y and prices did Z. Here we have the potential for another X event (or the event itself), but now worldwide excess production capacity is one-quarter of what it was the last time X occurred. Therefore, if I need future supply, I had better buy it today, just in case the situation is worse than I think it is.
The market participants will reason in this fashion every single time. And they will be correct to do so. The result is (and always will be, and price controls will not have the slightest effect on it) a huge push-forward of demand which will entail the obvious result -- an enormous price rise.
The key factor in crude, right now this minute, hasn't been mentioned in 150+ posts on this thread, except indirectly, and it is this:
If you want lower prices, the worldwide EXCESS production capacity must increase. This and this alone will ameliorate or eliminate the fear factor.
There is nothing artificial about fear, m'friend. When it exists, prices are and always have been disproportionately affected (a far worse case, btw, was the natural gas market after Katrina), and will also be in future. Here's a friendly tip for you, which you can make quite a good thing of if you think about it for a bit:
Any time you think you're smarter than the market, you lose.
Now, I don't mind if you lose, but I **do** mind if you take me down with you. Price controls -- so popular with some on this board -- are a direct statement that someone (typically the geniuses in the gov't) thinks he/she/they are smarter than the market.
As I remarked to IowaProf above: ''Price controls are the economic illiterate's version of perpetual motion.'' You can take it from there.
Another voice of reason on this issue and welcome aboard.
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