Friday, April 22, 2011

Passing The Blame on Gas Prices

Since I don't have Internet today, I've been web surfing on my iPhone.  I was reading this article on NPR about the cause of rising gas prices; I can't link it because iPhone won't do that but it said:

It's tempting to blame speculators for the price run-up. In March, U.S. Attorney General Eric Holder established a task force to investigate potential fraud in energy markets.

So far, it's "clear that there are lawful reasons for increases in gas prices, given supply and demand," Holder says in a statement.

It's also tempting to blame the falling value of the dollar for rising oil prices. After all, oil trades in dollars and since January the U.S. currency is down about 10 percent against the euro.

But Tom Kloza, chief oil analyst with the Oil Price Information Service, says it's more complicated than just that. Trouble in the Middle East is still spooking markets, and investors want to buy oil.

Not a single word about the drilling moratorium or lack of domestic drilling.  Not a single mention that any hopes of domestic production are just ridiculous.

But, it is NPR.


Charlene said...

If NPR had said anything, if you wrote about it, you wouldn't be for it, IMHO. Oil prices go up because the people selling oil can do it and we cannot do a thing about it except start walking, doubling up, organizing our lives so we don't make trips for just 1 thing, etc.

Cut demand 5% and watch the prices go down. Cut anoher 10% they go down more. Supply and demand; you control that you got control.

Tony said...

The fraction of oil supplied to the world market by the United States is the proverbial "drop in the bucket". So it's not surprising that (a) such a "reason" is omitted, or (b) that you think that prices wuld be below $2.00/gallon if the moratorium was never implemented. Factor in the price of the wars that maintain our presence at the "Oil Bazaar", and we ought to be paying $14.00/gallon at the pump.

Laurence L. said...

So easily forgotten is the concept of futures. Factor that OPEC, the oil companies that produce and sell it (name every brand their is) learned long ago that price gouging is the way, and all they need is some justification real or imagined. Plenty of those to go around. It happens every spring. Driving season in America.

It also helps them when the 'solution' being fostered is the myth of 'renewable energy' and that there are people who really believe that.

We are a captive market. The real solution is abundance of supply, easily done but not as profitable in the short term.

OPEC supplies the US with about 6% of our requirement, and most of that comes from Canada. Inside of a year we can start producing almost 60% more ourselves in the US and self sustain.

I don't have a car and know the highways so I can be regulated about where and when I decide to drive around by the government or the EPA, or the people next door.

Instugator said...

Pat, Which iPhone do you have? I think the newer ones have the ability to create a Wifi hotspot.

MikeAT said...

No Charlene, you don’t have a good understanding of the laws of Supply and Demand, IMHO.

Let me explain them to you. A widget is manufactured and in demand, then the producer can charge pretty much what he wants until the consumer says “I’ll live without it.” Now the demand caused by this will encourage others to get into the business and then as they push more widget sources to the consumer, the competition forces the prices down.

Now if something causes the supply to remain tight relative to the demand then the price will of course stay higher. Let’s see with things like that...

- Cutting off our access to oil in the Dakotas, Alaska, the entire seaboard of the United States (while the Chinese and Vietnamese err drilling in the Gulf of Mexico).

- Using the bureaucracy to stop oil companies from refining fuel by stopping the production of new refineries or the expansion of older refineries in the United States.

Now you suggestion of cutting off use of fuel 5-10% is absurd. I hate to shock you but if you do that others will buy the oil and use it. If you could cut worldwide demand for oil that would drive prices down....that won’t happen. China and India are screaming for oil and there are countries that will provide it. If the oil is not purchased by us it bought by someone else.

I don’t know if you were around in 1981 but one of the first things Reagan did for energy was to deregulate the oil industry. Guess what happened? Prices rose...for about 4 months. Then they fell again as competition and the ability to make an honest dollar brought more supply on the market

I just paid over 100 dollars to fill the tank of my truck...and every time I do I have one thought....”Thanks Obama.” And it will continue that way until we get the incompetent man-child out of the Oval Office and get someone who doesn’t want his ‘boot on the neck” of our critical energy sources.

Laurence L. said...

Dreams of the Founders: The day Obama is sent packing back to the south side of Chicago. We're obviously not finished clearing out the House and the Senate yet either.

Then the ICC and the EPA must be eliminated.
Bottom line is this government must be removed and replaced and the original Constitution restored. The Declaration of Independence requires it and maps the method, and anything short of that won't be enough.