Posted on 04/26/2006 6:35:00 PM PDT by Blood of Tyrants
Yes. There's only so much available at a time, now and in the future. Refiners need the crude. They'll bid what they think it takes to assure their supply w/o overbidding. Others are also in the market. The key to price rises is the futures market. The bidding is done on speculative grounds of what the future holds. Right now folks vision of the future is rather fuzzy.
"The Arabs sound like they control the price of crude...I read yesterday that the Saudi's don't want the oil to go below 60 dollars a barrel?"
I'd like to set my own hours and fill in the amount on my paycheck also. It don't work that way. Other folks won't go along. They'll move on to other sources and apply other pressures like not buying enough to keep up the income and cash flow of the lower price crude. Others will be there to take up the slack.
In this case demand is rising and that's a sound basis for rising prices. Demand means there's an essentially permanent global rise in the total amount of crude folks want. This is a steady rise in a background of volatile incidents effecting supply and seasonal changes.
Ayn Rand warned us against this.
Why for instance isn't there screaming and gnashing of teeth over supermarkets. My grocery bill goes up about 10% every year - with increases in meat, dairy, and produce. Damn greedy supermarket chains. We need a Congressional investigation!
This is one of Bill's pet peeves. Bill needs a crash course in economics 101.
I've taken economics classes, and read up on it.
I also know that a lot of economics isn't science, it's opinion.
If you have a point to make about economics, make it.
Otherwise go back to school your own self.
The good news is that the President is relaxing these requirements.
True; however my post was actually a reference to Bill's penchant for going straight down the middle of an argument: no matter how absurd one side may be, Bill goes halfway there.
What the market will pay IS the demand.
That it has nothing to do with supply and demand, and everything to do with charging whatever the market will bear.
"Supply and demand" and "charging whatever the market will bear" are quite literally the exact same thing! Your statement that they somehow have nothing to do with each other was the most ridiculous thing I've read in quite awhile.
What the market will pay IS the demand.
And "charging" is the supply.
"What the market will pay IS the demand."
Then the actual supply doesn't really matter, does it?
Actually, $3 a gallon is cheap, compared to what we are really paying for our oil. If we truly factored in the costs of the war in Iraq, and possibly Iran next, rather than throwing it off to the next generation, then we'd get a more complete economic picture. Does anyone else find it ironic to see a guy in a two-ton pickup on the news complaining about gas prices, even while he sports a "support our troops" bumper sticker?
Yes it does. At $75 per barrel for oil, there is supply that will not be produced at $10 a barrel.
Just keep in mind that supply and demand are not fixed curves. New technology like horizontal drilling, supply curve shifts. New development in India and China that consumes more barrels, demand curve shifts. New EPA regulations that causes rework in the refineries, supply curve shifts the other way.
How about simple math?
If the price is up many times what the demand is that equals market manipulation, and price fixing.
Okay, what does demand elasticity mean?
Those are accounting terms, which should be familiar to anyone talking about economics.
I'll take simple math over doubletalk any day.
His education may give him an edge...
The war isn't about oil. The war's about maintaining/attaining a free world. Irraq had oil to sell before. The country was in the hands of a criminal enterprise that back jihadi interests. Their interests were in getitng WMDs to exert their criminal power on the free world. The criminal enterprise that posed the threat to the free world was eliminated. Iran poses the same danger as criminal jihadists with nukes. Oil is irrelevant. Jihadi conquest is not. Jihadi conquest through threat, terrorism and any other form of intimidation is what our action opposes. We're not there to get oil.
"Does anyone else find it ironic to see a guy in a two-ton pickup on the news complaining about gas prices, even while he sports a "support our troops" bumper sticker?"
Feel good propaganda really tuggs at the liberal heartstrings. I suppose the WWs, the Cold war(WWIII), Korea and Nam were just for a few big business interests. Like this one is for big redneck and oil.
Uh...charging whatever the market will bear is supply and demand.
$3 per gallon gasoline is not cheap.
+$70 per barrel oil is ridiculous.
There is no oil shortage.
We might run out of oil someday, but not today.
There's actually an oil glut.
The record high prices are due to speculation and market manipulation.
At this point, I'd be looking to short oil, because there's plenty of supply to meet demand.
By the way, I don't drive a truck, I drive an Oldsmobile. I do support the troops, and I'll complain about the too high gas prices as much as I feel like it.
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