Does the president of United States really drive the vehicle on how much a gallon of gas cost. Also I believe a commodity of necessity like gas or beef where there are few competitors can work together to make a political party look bad on the short term…… but then again what do I know I just drive a bulldozer but I’m interested in other thoughts, Thanx for any Contribution to this.
He can sometimes make or promote policies that affect the price, such as tariffs, etc. And sometimes he can do things that have a long-term effect on supply, such as encouraging or restricting domestic drilling, for example. But as far as day-to-day fluctuations in price are concerned, the president is powerless.
Gasoline is nearly unique among products, in that the effect of supply and demand has much less power on the price than many other products. For gas, the balance between supply and demand can be temporarily swamped by other factors, such as a war or terrorist attack in a particular place. There are many aspects of the price that simply cannot be controlled by any one person or even nation.
To me, gas and beef are not necessities.
Do you mean that they’re not necessary to you, or that you personally don’t think of them as necessities? I think it’s fair to call something (like gas) a necessity as long as it is needed by a substantial number of people and/or by our society as a whole. I don’t need prescription drugs, but I wouldn’t argue with anyone who called them necessities—they’re certainly not luxuries.
And even if you don’t buy gas yourself, the price of gas can affect you by affecting transportation costs for the goods you do buy.
You are right. Though many people don’t eat meat.
Yeah, it’s harder to make the case for beef being a necessity. Though it would cause serious disruption for certain businesses if it weren’t available.
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Does the president of United States really drive the vehicle on how much a gallon of gas cost. Also I believe a commodity of necessity like gas or beef where there are few competitors can work together to make a
When Trump made the CEO of Exxon his secretary of state I would like to think the other companies bent over backwards to work on his behalf and likewise if in a ministration was not friendly with their needs they can work against him as they control the taps
The president can (and has in the past) released oil from the US strategic petroleum reserves. This has the effect of increasing supply and lowering prices.
From November 23, 2021:
50 million barrels is chump change. Americans use, on average, 18-20 million barrels per day. Any positive effect from releasing petroleum reserves is minuscule and very short lived.
I think the benefit from releasing some barrels from the strategic reserve is more psychological than anything else. Which is not useless (psychology is important) but doesn’t really do much for supply or prices.
So per your own post it doesn’t really do anything but it’s important the President plays some kind of mind game.
What exactly is the psychological benefit of doing something that has no effect on gasoline supply or prices, and why is it important that something pointless is performed for this alleged psychological benefit?
Sorry but that just sounds ridiculous to me.
That’s not what she said and you know it.
The size of the release of oil to the market compared to the total market is a factor ,but how much oil is added compared to the difference in supply and demand and the availability of that additional supply in a given time frame is probably more significant.
So if the demand is 100 and supply is only 98, the price is going to go up, a lot , so releasing just 2% of total demand, whilst only a drop , can prevent some serious price spikes.
The converse is true and as we saw when the futures price went negative a short while ago, it was only a small number of futures contracts being traded back and forth with an ever decreasing price. There was no available storage for the oil that had to be taken, so no one wanted to be left holding the bag when the contract came due. The spot price remained unchanged , the next months contract prices were all positive, just a very small imbalance in supply and demand even relative to the total market can lead to some crazy short term prices, which get people very excited.
Also as the market knows that oil will be available to smooth out any short term supply issues , that gets priced in and removes uncertainty, so although short term spikes are avoided , it brings a longer term stability to at least the local ( US) market prices as traders can reduce some of the risk in volatility that also makes for price swings .
They most certainly did. They posted that releasing the reserves doesn’t do much for supply and demand but theres some kind of psychological effect.
How exactly do psych trips and “feel good” maneuvers help the overall situation?
Read Precambrianmollusc’s explanation.
Your characterization shows that you don’t understand the markets with inelastic demand. Or your just trying to score political points even if you know your argument has no merit.
I can point at history. When Clinton released 30 million barrels it had little to no effect. Theories abound but it’s little more than than a token gesture. And most economists and speculators agree with that.
It has nothing to do with my politics as much as it has to do with the Presidents. He’s trying to look decisive and look like he’s doing something. What he is doing will neither help (and in all honesty on my part) nor hurt the situation.
It can help forestall things like panic buying. By reassuring that there will be SOME supply it calms the more frantic. Also what others have said about moderating price spikes.
It’s rather like when FDR reassured a nervous nation during the Depression that “we have nothing to fear but fear itself”. Mind set does make a difference for many people because people are driven by emotion, often more so than by logic.
Good God I would be ecstatic to have Person of FDR’s character lead are country again . We are relegated to carpet baggers ,PT Barnums & Professional boot licker ! Mention onFDR brought a smile to my face!