My appologies. Thought this was a retorical question on your part and the prelude to a new revelation.
-XT
Isn’t that be the question congress and all Americans should be asking?
Silly question. Money flows as it always has, into the hands of the wise and deserving, who are best fitted to attend to it.
It’s $64million a day rather than $640billion.
If it’s all the same to you, we won’t let you do the math anymoresince you were off by a factor of 10,000
my bad…640 million
better?
64
sixty-four millions
1.6 x 40 = 64
Where on my resume do I put wise and deserving?
No one loves a smart-ass, Simon. Trust me on this.
The hoary wisdom of one whose credentials in this matter proceed him speaking for themselves.
It’d be and I’d be wiser that I listened.
If I meet any smart-asses, I’ll let them know.
What would be even better is if you took the difference between the old price, say $30 and the new price of $40.
1.6e6 * $10 = $16 million a day.
While everyone’s correcting math in this thread, I’ll point out that “up 80%” doesn’t mean that 80% of $5.5 billion is this new activity. It means that $5.5 billion represents 1.8 times what they earned in the first quarter last year, so the new activity accounts for $5.5*0.8/1.8 = $2.4 billion. [I.e., they earned $3.1 billion last year it it went up to $2.4 billion to $5.5 billion this year.]
That said, if you project this out at the same rate, you arrive at something just a little shy of $10 billion for the year, which is certainly nothing to sneeze at! Boy, is it ever nice to have friends in high places!
Of course, correcting math is no reason to fuck up on the English. That should read “[I.e., they earned $3.1 billion last year and it went up by $2.4 billion to $5.5 billion this year.]”
I’m still here. And I’m still angry about being lied to. But you know what? That doesn’t mean that I can’t ask a reasonable question. My question isn’t quite unjustified, I’m sure you’d agree. Or maybe you don’t agree. After all, you’re coming at me with all of this vitriol, and all I did was ask a simple question that doesn’t touch on the “Hate Bush” party line that I guess you think I should be toeing.
What did you think I was gonna do, throw my medals away? Use more of your head and less of your knee the next time. In spite of my stated intent to vote for Kerry, I am still a registered independent and admitted conservative. Nothing has changed. And your reactionary sputtering above proves that far better than anything that I could ever say or do.
Don’t i?
Then explain to me how crude oil prices are at the same levels they are in 1990, yet prices at the pump are at least 50% greater than 14 years ago. When the price of crude oil rises, gas prices skyrocket, when the price of crude oil decreases, gas prices slowly rise. This is not the work of a free market.
A fair question. I’ll need to dso a bit of research to give a coherent answer. I’ll presume you’ve already followed the links in post #35.
For now, I have to be somewhere; I’ll try to discuss this further tonight.
OK, here’s the best I can do for now.
Well, I’ll take your word for this, although I have no data in front of me that says this is so. But what is the effect of inflation over that period? Is not a significant amount of this apparent rise due to inflation?
Well, I’ll have to disagree. The perception you refer to in your second point is a common one, but it appears to be only a perception rather than factual.
I am satisfied that retail gasoline prices rise and fall mostly in concert with the commodities prices for both crude and refined product, with adjustments for inflation. The commodities market, however, operates somewhat like a stock market: some swings in prices are clearly irrational, and not supported by fundamentals. This appears to be one of those times.
OPEC has been limiting production for the past several months, causing refiners to draw down existing crude stocks; crude prices go up as refiners make spot purchases to fill in supply shortfalls. At the same time, purchasers of both crude and refined products are apparently scared that the current poor security situation in the Middle East (and btw, Nigeria, which is dancing perilously close to civil war) may result in interruptions to supply in the next few months They are, therefore, bidding up both spot and futures contracts for refined products to lock down as much of the available supplies as possible for the summer driving season.
That this fear is probably not supported by fundamentals can be seen by the apparent fact that refining margins (the difference between the price of crude and the wholesale price of refined product) are at historic highs. So, if you want culprits, I guess you could say it’s the refiners, wholesalers who are willingly paying irrationally high prices for product, and to a lesser extent OPEC. OPEC has within the past few days announced that they intend to ramp up crude deliveries; this should cause crude prices to relax (if, that is, purchasers do not remain panicked over the ME security situation) with a knock-on effect of reducing prices at the refined product end.
According to the chart about halfway down the page at this link, during the admittedly short time period shown, there does not seem to be any pattern at all that I can discern wherein retail prices are maintained at an artificially high level after prices for crude or spot-purchased refined products fall, nor is there an indication that retail gasoline prices rise independently of either crude or wholesale refined prices. As you’ll note, btw, this chart is part of a 2001 FAQ entitled “Why are gasoline prices falling so rapidly?”
I realize the above may not be satisfactory to you, and I will not rule out the possibility of some price gouging of wholesalers by some refiners, or consumers by some wholesalers. But in the absence of a cartel arrangement (and OPEC aside, there is no domestic oil cartel that know of) and without more data, I cannot accept that there is some sort of conspiracy to run up gasoline prices simply to gouge the end user. On the other hand, if refiners and wholesale gasoline purchasers suddenly find they are paying absurdly high prices for product, are they going to just eat their losses? Fat chance. The higher costs will be passed on to the consumer, as they always are.
I really can’t spend endless amounts of time on this, so I must stop here. If you wish to believe that there is an oil price conspiracy directed at the consumer, I won’t stop you, but I’m afraid I just don’t see it.
Perhaps you may want to think about one more thing: Whoelsale milk prices have risen to historically high levels over the past three or four weeks, yet hardly anyone seems to be yelling about a conspiracy to run up milk prices artificially. Why might that be?
Sorry for the length, but hey, it’s a complex subject.
I’ve read a number of stories in the past month or so about the U.S. running short on refining capacity. I did a search on CNN-Money using “gasoline refining shortage” as my terms, and while it wouldn’t let me link to the actual articles, it ran a couple of them in April:
I’m not a student of the energy industry, so I don’t know what the truth is about our refining capacity, but the price of crude isn’t the only place between the wellhead and the pump where supply-and-demand can play out. If here in the USA we have more people who want to buy more gallons of gasoline at $1.80/gallon than the refineries can produce, then the price of gasoline will go up. Or we can cap the price of gasoline and have gas lines, like we did in 1973-4.
And if we had a lick of sense as a nation, we’d get those high prices by taxing gasoline.
Say the price of gasoline needs to be at $2.50 a gallon before supply and demand come into balance. (If we’re lucky, that’s all it will take.) They’re now just under $2 here in southern Maryland. If the market takes the price up to that level, some of the difference will go to the oil producers (mostly overseas), and some of it will go to the refiners and resellers.
If we get there by a 50-cent tax per gallon, the consumer experiences exactly the same thing, only we achieve some benefit by reducing the deficit by tens of billions of dollars annually. Or we could just give it right back. And that’s my wild-ass idea: we give it back to the people, in advance. Just like with the tax rebate back in 2001, we send everybody a check.
We figure out where, say, the 90th percentile is in terms of gasoline consumption: if, hypothetically, 90% of adults go through 1000 gallons or fewer of gasoline in a year, then we base the tax on that amount. Then we multiply the per-gallon amount of the tax by 1000, and send everyone a check to pay in advance for the gasoline tax over the next year. Since 90% Americans would consume less than that amount, they’d actually be getting a slight tax cut. And the people who weren’t getting a tax cut, well, they could bring their consumption down so that they were.
But we, the people, would be coming out way ahead of where we’d be if we just let “the market” take care of it.