billvon 3,120 #1 March 19, 2004 A co-worker in Amy's clinic mentioned the other day that she couldn't afford to drive her Explorer to work herself any more, so she's going to start carpooling with her husband who works near her. So some good has been coming from high gas prices - at least in her case she'll use less gas and spend less money on commuting. And around here I've been getting a lot of questions about hybrids, how much they cost and how reliable they are. The toyota dealerships around here have a long waiting list for Priuses. Hopefully that will encourage other manufacturers to get involved - every car dealership out there wants a waiting list for their cars. Oil is both getting more scarce and demand is going up. China alone keeps exceeding all expectation on how much oil they use. And unfortunately, rising oil prices in Asia and the EU won't reduce demand in those places since the government taxes the heck out of gasoline, so a 10% rise in the price of oil corresponds to a 2-3% increase in gasoline prices. We have fairly low fuel taxes here in the US (fixed at around 42 cents a gallon, or ~20% of purchase price) so we don't have the same sort of buffering effect. Prices are probably going to hit $40 a barrel soon, and that means record gasoline prices. "Gas prices in the U.S. do stand a good risk of setting new records. How long these prices will stay high, no one knows" - Jan Stuart of FIMAT USA, a New York brokerage. The national average is around $1.72 now; around $2.20 in California. I've seen predictions for anywhere between $1.83 and $2.20 a gallon nationwide as the summer driving season starts. We may see $3 a gallon in CA by summer's end. About the only way (in terms of economics) of forcing oil prices back down is to reduce demand faster than supply diminishes. High prices are one way of causing that reduction in demand; it's painful but effective. High prices also allow economical exploitation of alternatives like tar sands, which adds to supply at the higher price and has a moderating effect. But I think the trend is pretty clear. Quote Share this post Link to post Share on other sites
ScubaSteve 0 #2 March 19, 2004 When will jump prices rise? Dont we all depend on oil to get us to altitude? Quote Share this post Link to post Share on other sites
ChasingBlueSky 0 #3 March 19, 2004 After telling all of my friends about how much I loved the Hybrid cars I test drove - they are all considering Hybrids for their next purchase! A couple are also considering the TDi line from VW. It didn't take much to convince them either - I showed most of them the savings calculator on Toyota's web site and it shocked most of them. Most are waiting until 2005 to see the new line of hybrids that are hitting the market._________________________________________ you can burn the land and boil the sea, but you can't take the sky from me.... I WILL fly again..... Quote Share this post Link to post Share on other sites
Guest #4 March 19, 2004 hehehe - So there is some good news, at last. Perhaps the US will soon wean itself from the teat of foreign oil, and then the whole Middle East can go collectively suck a big one... mh ."The mouse does not know life until it is in the mouth of the cat." Quote Share this post Link to post Share on other sites
Gawain 0 #5 March 19, 2004 This spike in prices has nothing to do with oil availability, it has to do with OPEC and their cuts in production.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
Gravitymaster 0 #6 March 19, 2004 Oh, great. Expect to pay more for all consumer goods as trucking and shipping companies raise their prices to offset increases in oil and gasoline. Expect to pay more for utilities. Oh, wait thats right, the govt will subsidise it for you the way they did a few years ago in the Northeast. So expect your taxes to increase. Oh, wait, thats a good thing too because the govt should only raise them on the rich. Expect to pay more for airline tickets, jump tickets, parachutes, anything imported etc. But hey, not to worry, you can offset it by driving your little Precis. Just don't cut me off in my Ford Expedition. Damn good thing the Iraqi war was fought for oil isn't it? Quote Share this post Link to post Share on other sites
lawrocket 3 #7 March 19, 2004 It also has to do with the formulation of summer fuels. Winter fuels and summer fuels are scarce in Cali right now, since the formulation is being given it 6 month flip. Also, the Shell refinery is Bakersfield is closing. This means higher prices for gasoline in Cali even if the oil was available. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
usedtajump 1 #8 March 19, 2004 Heard a radio discussion the other day relating that due to the continuing slippage of the US Dollar, OPEC is seriously considering basing the price of oil on the EURO instead of the Dollar. This would immediately increase the cost of importing foreign oil to the US by about 25%. Anyone else hear this?The older I get the less I care who I piss off. Quote Share this post Link to post Share on other sites
rehmwa 2 #9 March 19, 2004 QuoteIt also has to do with the formulation of summer fuels. Winter fuels and summer fuels . . . Summer and winter fuels? ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites
ChasingBlueSky 0 #10 March 19, 2004 QuoteThis spike in prices has nothing to do with oil availability, it has to do with OPEC and their cuts in production. BINGO!_________________________________________ you can burn the land and boil the sea, but you can't take the sky from me.... I WILL fly again..... Quote Share this post Link to post Share on other sites
Remster 30 #11 March 19, 2004 QuoteQuoteIt also has to do with the formulation of summer fuels. Winter fuels and summer fuels . . . Summer and winter fuels? In California? Remster Quote Share this post Link to post Share on other sites
Gawain 0 #12 March 19, 2004 QuoteQuoteIt also has to do with the formulation of summer fuels. Winter fuels and summer fuels . . . Summer and winter fuels? Parts of the country (New England, the mid-west) have laws that require reformulation of gasoline during cold winter months to reduce fuel-based emissions.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
Gawain 0 #13 March 19, 2004 QuoteQuoteThis spike in prices has nothing to do with oil availability, it has to do with OPEC and their cuts in production. BINGO! I might remind those too that it was OPEC's embargo in the 70s that caused the previous "big" recession.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
rehmwa 2 #14 March 19, 2004 QuoteQuoteQuoteIt also has to do with the formulation of summer fuels. Winter fuels and summer fuels . . . Summer and winter fuels? Parts of the country (New England, the mid-west) have laws that require reformulation of gasoline during cold winter months to reduce fuel-based emissions. But in California? they don't have laws that stifle supply just to satisfy special interest groups.... ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites
PhreeZone 20 #15 March 19, 2004 Not all of California is sun and surf... NorCal and the mountians get a health dose of winter too.Yesterday is history And tomorrow is a mystery Parachutemanuals.com Quote Share this post Link to post Share on other sites
rehmwa 2 #16 March 19, 2004 I wasn't coming at it from that direction, but nice point anyway. (I'd much rather mock the perceived need for multiple formulations of gasoline and the perceptions that drive this type of unnecessary expense. ie. well intentioned, but likely causes more harm than good). I'll still trade weather with you guys right now. ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites
Gawain 0 #17 March 19, 2004 QuoteQuoteParts of the country (New England, the mid-west) have laws that require reformulation of gasoline during cold winter months to reduce fuel-based emissions. But in California? they don't have laws that stifle supply just to satisfy special interest groups.... California is its own animal. The high-market prices are one factor, plus, CA's "rules" for fuel make it more expensive to refine, plus, it refines its own fuel, plus, out of the 13 refineries CA has, usually 3 or 4 are down for repairs/maintenance.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
headoverheels 334 #18 March 19, 2004 Quote Winter fuels and summer fuels are scarce in Cali right now, since the formulation is being given it 6 month flip. Yep, the oil companies flip us off at least twice a year. Quote Share this post Link to post Share on other sites
lummy 4 #19 March 19, 2004 Actually, California DOES reformulate their supply in the winter. IIRC, the winter supply is oxygenated to burn cleaner. That is supposedly why prices are so high in Ca, because the refinerys aren't making enough of the winter fuel.I promise not to TP Davis under canopy.. I promise not to TP Davis under canopy.. eat sushi, get smoochieTTK#1 Quote Share this post Link to post Share on other sites
billvon 3,120 #20 March 19, 2004 >Expect to pay more for all consumer goods . . . Definitely. On the plus side, the oil-futures investors are cleaning up. In the words of one analyst. "there's a lot of glee lately." >But hey, not to worry, you can offset it by driving your little Precis. >Just don't cut me off in my Ford Expedition. Don't worry, I wouldn't do that. Wouldn't want you to roll that thing . . . But what's a Precis? Quote Share this post Link to post Share on other sites
Gravitymaster 0 #21 March 19, 2004 Quote>Expect to pay more for all consumer goods . . . Definitely. On the plus side, the oil-futures investors are cleaning up. In the words of one analyst. "there's a lot of glee lately."Quote Yep, ain't life grand. Just gotta know where to invest. >But hey, not to worry, you can offset it by driving your little Precis. >Just don't cut me off in my Ford Expedition. Don't worry, I wouldn't do that. Wouldn't want you to roll that thing . . . But what's a Precis? My bad, I meant Priuses. You know, one of those little cars that are always getting stuck under my Expedition. Quote Share this post Link to post Share on other sites billvon 3,120 #22 March 19, 2004 >This spike in prices has nothing to do with oil availability, it has to do > with OPEC and their cuts in production. Which is like saying that grain harvests have nothing to do with food prices, it has to do with how supermarkets gouge you. And while supermarkets may sometimes do that, they cannot operate outside the bounds of the laws of economics. OPEC is just one step in the chain. We're another step in the chain. In a purely capitalistic sense, OPEC will set as high a price as the market will bear. If there were other sources, OPEC would be undercut and would make less money by raising prices. If we were willing to reduce demand by using less oil (and switching to domestic sources of energy) then OPEC would drop prices to make those sources of energy noncompetitive. But as far as I can tell we are unwilling to reduce our energy use unless forced to, so I have a feeling we will pay whatever OPEC asks (in the near future, anyway.) Quote Share this post Link to post Share on other sites bmcd308 0 #23 March 19, 2004 >>High prices are one way of causing that reduction in demand;<< Just to nitpick your word choice here - rising prices actually cause a reduction in quantity demanded - as price increases, there is a movement along the existing demand curve. Factors other than price, such as the existence of attractive hybrid vehicles, actually move the demand curve. This is an abuse of economics terms that appears in almost every news story, and even some economists do it, but it is a pet peeve of other economists (like me). ---------------------------------- www.jumpelvis.com Quote Share this post Link to post Share on other sites billvon 3,120 #24 March 19, 2004 >rising prices actually cause a reduction in quantity demanded . . . Sorry, you're right. It's been a long time since college economics courses. Quote Share this post Link to post Share on other sites bmcd308 0 #25 March 19, 2004 You know, there is a lot of truth to this. I have been rethinking my own vehicle choices lately due to high gas prices. I drive a big gas guzzler. I have always, with the exception of a brief sports car period, driven a big gas guzzler. Not a medium-sized gas guzzler, but the kind of gas guzzler that makes Honda Civics hit the ditch when I put my blinker on. Lately, it has been a real pain to fork over the $45 to fill up, and just today I was telling someone that my next vehicle would likely be something smaller. I doubt it will be a hybrid for the simple reason that I am very tall and do not fit comfortably in most small cars, but if I'm thinking that doubling my gas mileage would be a good thing, then surely others are, too. ---------------------------------- www.jumpelvis.com Quote Share this post Link to post Share on other sites Prev 1 2 Next Page 1 of 2 Join the conversation You can post now and register later. If you have an account, sign in now to post with your account. Note: Your post will require moderator approval before it will be visible. Reply to this topic... × Pasted as rich text. Paste as plain text instead Only 75 emoji are allowed. × Your link has been automatically embedded. Display as a link instead × Your previous content has been restored. Clear editor × You cannot paste images directly. Upload or insert images from URL. Insert image from URL × Desktop Tablet Phone Submit Reply 0
billvon 3,120 #22 March 19, 2004 >This spike in prices has nothing to do with oil availability, it has to do > with OPEC and their cuts in production. Which is like saying that grain harvests have nothing to do with food prices, it has to do with how supermarkets gouge you. And while supermarkets may sometimes do that, they cannot operate outside the bounds of the laws of economics. OPEC is just one step in the chain. We're another step in the chain. In a purely capitalistic sense, OPEC will set as high a price as the market will bear. If there were other sources, OPEC would be undercut and would make less money by raising prices. If we were willing to reduce demand by using less oil (and switching to domestic sources of energy) then OPEC would drop prices to make those sources of energy noncompetitive. But as far as I can tell we are unwilling to reduce our energy use unless forced to, so I have a feeling we will pay whatever OPEC asks (in the near future, anyway.) Quote Share this post Link to post Share on other sites
bmcd308 0 #23 March 19, 2004 >>High prices are one way of causing that reduction in demand;<< Just to nitpick your word choice here - rising prices actually cause a reduction in quantity demanded - as price increases, there is a movement along the existing demand curve. Factors other than price, such as the existence of attractive hybrid vehicles, actually move the demand curve. This is an abuse of economics terms that appears in almost every news story, and even some economists do it, but it is a pet peeve of other economists (like me). ---------------------------------- www.jumpelvis.com Quote Share this post Link to post Share on other sites
billvon 3,120 #24 March 19, 2004 >rising prices actually cause a reduction in quantity demanded . . . Sorry, you're right. It's been a long time since college economics courses. Quote Share this post Link to post Share on other sites
bmcd308 0 #25 March 19, 2004 You know, there is a lot of truth to this. I have been rethinking my own vehicle choices lately due to high gas prices. I drive a big gas guzzler. I have always, with the exception of a brief sports car period, driven a big gas guzzler. Not a medium-sized gas guzzler, but the kind of gas guzzler that makes Honda Civics hit the ditch when I put my blinker on. Lately, it has been a real pain to fork over the $45 to fill up, and just today I was telling someone that my next vehicle would likely be something smaller. I doubt it will be a hybrid for the simple reason that I am very tall and do not fit comfortably in most small cars, but if I'm thinking that doubling my gas mileage would be a good thing, then surely others are, too. ---------------------------------- www.jumpelvis.com Quote Share this post Link to post Share on other sites
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