Inflating the dollar is a big factor. That I agree with.
The war is one of the reasons we have inflation. That also is true. But there is a lot of oil there and we have no intention of leaving it.
They’re only following the business model pioneered by Enron when they were allowed to run California’s power grid.
You schedule outages at peak demand, turn off generators when they’re needed, refuse to build more plants, and force the grid to buy power from your out-of-state plants at huge mark-ups. They’d even reroute power out of state at a big profit to create shortages that required power to be imported.
They simply schedule outages of refineries during peak demand, refuse to build more, and charge as much as possible for the artificially scarce product.
I don’t think it’s too much to ask that the oil company executives be hunted down, soaked in their own product and burned. Only fair. Throw in ex-executives like Dubya and Cheney.
There is no shortage for oil, but the case can be made for a shortage of cheap oil (crude oil, the kind where you can just pump it out and throw it in a barrel). There’s huge stockpiles of oil mixed with other things that are not oil like rocks, dirt, sand, etc, at least a hundred years worth. So while we can prove oil companies are artificially rising prices a bit via OPEC agreements, I think the sheer volume of demand accounts for most of it.
Frankly, I’m all for rising gas prices if they would convince enough people to once and for all give up on the damn stuff.
Anybody have blueprints for turning a bicycle into an electric one?
But they aren’t breaking the law by doing that. They’re exploiting the rules of the system. A lot of Enron’s actions were not against the law. Sarbanes Oxely act (sp?) was created after to close some loopholes. I’d rather get mad at Washington DC for not tightening the loopholes, what is it they are doing over there?
The california power shortage was created by the California legislation when they opened up the market to competition but regulated the amounts that could be charged. The power companies were under no obligation to lose money and the end result was a predicted power shortage. You can thank Governor Grayout Davis for that mess.
This is a thought I had over the weekend.
Oil prices are up because of demand. OK, I under stand supply and demand.
The US military has two area’s in which they are currently operating, Iraq and Afghanistan. I believe the old saying goes that an army marches on it’s stomachs. And with a modern military being heavily dependent on vehicles for both supplies and operations, wouldn’t the military’s need for fuel increase?
So exactly how much of the increase in fuel demand is caused by our (and our allies) increased military activities overseas? Is it enough alone to raise the price of oil, or is it a drop in the bucket compared to the growing demand of foreign markets?
It’s a drop in the bucket. Figure that a good portion of that fuel would have been allocated for training anyway. When I was deployed we flew every day. When I’m home we have three flights a day, three days a week, along with anything going on over the weekend. For us that’s a reduction from deployment of around 50%, which is pretty substantial but is not universal throughout the military. The Army has their training regimen, which uses a lot of fuel. This is completely normal, so there has been a large increase in usage but not so much that it would drive the entire market.
Compare that to the report in a recent edition of the Economist, which asserts that 1,000 cars per day are being added to the streets of Beijing. It’s no contest. China, more than any other factor, is driving demand.
IANAEconomist, but…
$3.60/gallon (in our area right now – and I know it’s not the highest) is for lack of a better phrase HIGHWAY ROBBERY.
See, Jane Q. Public sees this and this and then contemplates the fact that her husband was laid off because the company must cut costs somewhere due to rising energy costs they can’t control, and becomes convinced that something is fucking wrong with this picture.
Please explain to me how record profits for oil companies and rising energy costs negatively impacting everyone else’s financial outlook is healthy for our economy, because I don’t see it.
Yeah, I do think the energy (gasoline, electricity, natural gas) racket needs to be regulated more. I’m now on a payment plan with my power company because I can’t afford my monthly bills (and I turn off lights and take short showers, goddamn it!) and it cost $82 to fill up my gas tank in my one vehicle. This is fucking ridiculous.
I didn’t consider that aspect of it. So overall the military’s use of fuel and oil has increased, but it still isn’t a big enough piece of the overall pie to influence oil prices. Thanks for that insight.
I wonder if there is a market for militarized Prius’s?
In 1996 Europe and America had over 400 million autos. !000 a day . No factor at all.You are grasping at statistics to buttress a preconception.
Well, not necessarily. It is also possible that the oil companies, acting in concert rather than in competition, are responsible for artificially limiting the supply, as often happens with cartelized commodities – OPEC managed to do it back in the '70s.
But I’m not seeing hard proof of that yet.
The problem is you are not looking at what alternatives we have. What do you want to do, have the government set prices? Then we’ll all be standing in gas lines again. The current situation might not be “healthy” for the economy, but I don’t see how any alternatives would be healthier.
Oil prices are set on the world market, and nothing the US is going to do can change that. If you want to tinker with the market system for gasoline in the US, just beware of the consequences will be.
We could break up the oligarchy that controls it and actually have competition.
Which oligarchy – the U.S. oil companies, or OPEC? Breaking up the latter would require a world war. (Doing it through a regional war has already been tried, and failed.)
International cartels, originally our corporations ,which have conglomerated into 5 companies that control the worlds resources. We can start there.
Some of this is correct, but its entirely misleading to leave out the effect of energy producers fraudulenty gaming the market
No, you can thank Pete Wilson, who’s administration passed the electricity deregulation laws, not Davis’s.
If the oil company decided to forgo all its profits, your gallon of gas would cost about $3.34. I don’t think oil company profits are the source of your problem.
Haven’t read the article, but the guy is a good car reviewer, and his “Backside of American History” segment is always a good listen.
How would we do that?
The best way to reduce gas prices is to lower your demand. The reason why oil prices have skyrocketed so much is because demand is so inelastic. If it was more elastic, prices would not have to rise so much to equalize the supply and the demand.