again with the gas prices..., http://www.dailynews.com/Stories/0,1413, Options

[mikester]

http://www.dailynews.com/Stories/0,1413,20...2119362,00.html

What we have here...is someone making a profit...who decides when you're charging too much for something?

Well - these guys are capitalists and they will CHARGE WHATEVER THE MARKET WILL BEAR.

So the only solution is to find some other way to work making fuel in less demand than it is right now.

I say we start a pool - winner gets a 914 hat or something...

Guess what the highest $ per gallon will be on labor day (end of summer).

I'm just saying...

[Bruce Allert]

It'll go up for awhile then drop down...
I'll guess it will end at $2.03 for reg-lar. (shit! that's still too high tho) (IMG:style_emoticons/default/fighting19.gif) Basterds


..........b

[Randal]

People… Does everyone understand how a Monopoly works? Talking about this gas question is just a waste of time.

The gas companies have a license to steal and that is exactly what they are doing. The government is giving them a pass.

As so is Bill O’Reilly who won’t address the Monopoly question. Wonder what’s in it for him?

[mikester]

How is it a monopoly if there is more than one oil company selling and refining oil?

[lapuwali]

I think the word Randal is grasping for is "cartel", not monopoly. There is most certainly a well - known cartel of oil producers setting the price of the raw material: OPEC. They declared MONTHS ago they were going to reduce production to raise the price of oil, and whadda know, the price of oil went up. Exactly who and why those strings are being pulled, I leave to the conspiracy theorists. Plain desire for money on the part of the OPEC nations is enough for me. I don't need any actions from our government to explain it.

Unrest in the world's key oil producing areas (y'know, those terrorists blowing themselves up in Saudi Arabia, you do watch the news, don't you?) is also making enough people nervous fearing that this is going to somehow impact their supply of oil that they're raising prices ahead of that. Something any resonsible business person would do. Again, no spooky government intervention required (well, I suppose the whole Iraq thing, but...) to explain this.

[mikester]

I think the word Randal is grasping for is "cartel", not monopoly. There is most certainly a well - known cartel of oil producers setting the price of the raw material: OPEC. They declared MONTHS ago they were going to reduce production to raise the price of oil, and whadda know, the price of oil went up. Exactly who and why those strings are being pulled, I leave to the conspiracy theorists. Plain desire for money on the part of the OPEC nations is enough for me. I don't need any actions from our government to explain it.

Unrest in the world's key oil producing areas (y'know, those terrorists blowing themselves up in Saudi Arabia, you do watch the news, don't you?) is also making enough people nervous fearing that this is going to somehow impact their supply of oil that they're raising prices ahead of that. Something any resonsible business person would do. Again, no spooky government intervention required (well, I suppose the whole Iraq thing, but...) to explain this.

I'll accept the word "cartel" to describe this situation.

While it isn't a monopoly - the collusion of sellers agreeing to sell a product at a given price rather than competing in the free and open market IS illegal.

For example - the recent Grocery work strike here in CA brought Ralph’s, Vons and Albertsons together to share profits so that during the strike they could minimize their suffering while maximizing their ability to endure. THAT was illegal collusion and an investigation was ordered - the results of which I have not been able to find.

This collusion of the oil companies is not legal so why it is continually allowed I do not understand other than to say - the government doesn't want to jeopardize our ability to get oil from overseas. However if they DID subject the oil companies to the same standards of law as everyone else our prices would ultimately be lower.

Now I've got to go do some reading...

[morph]

It was $2.20 up until monday, filled up this morning on the way to work at $2.23 figured that I better do so before gas prices go up again, by the time I went home it was as high as $2.40. My guess it will top off at $2.75 gallon here in Oregon, then will lower to $2.20 gallon this fall.

[lapuwali]

OPEC is not a body of oil COMPANIES. It's a body of oil producing NATIONS. You can't file an anti-trust action against a whole country, or an organization of countries, so OPEC continues to exist and does whatever it wants, irrespective of the laws in the US, the EU, or any other country or organization that deems cartels illegal.

OPEC can't and won't raise prices enough to make alternative forms of energy attractive, which sets an upper bound on how high is high at any given time. Right now, they feel they can get away with $40 and change a barrel. A few years ago, they didn't dare raise them above $35/barrel, as rising oil prices DO damage economies, which could end up with reduced oil sales, and thus less demand, and thus fewer dollars in their pockets.

[Randal]

Monopoly is the correct term.

Joseph Alioto, the ex-major of San Francisco, has been saying for months that there are only two oil powers in the US; these two corporations own all the others, directly or indirectly.

Granted, technically a monopoly is a single corporation controlling the market, but these two corporations are clearly happy to “control” this market. It is pretty simple to watch each other when the prices are being pushed up or down.

Secondly, our friend Saudi Arabia is treating us like the typical 15-year-old kid rebelling against his/her parents. Where do you think Saudi Arabia would be if it weren’t for our “protection?” And just how many people do you think are controlling Saudi Arabia and potentially putting our economy in the tank like they did last time?

Bottom line is that Saudi prices oil just about anywhere they want. OPEC, which must be very loosely referred to as a cartel, is their mechanism that they control behind the curtain.

When they want to appease the rest of the Middle East they gouge price the big users of oil, i.e., read that as the USA and Europe.

And if you don’t believe the US oil companies are having fun with the price increases, then you probably haven’t seen them lately reporting huge profits allowing them to re-purchase their own stock.

[lapuwali]

I'm quite certain the US oil companies are having a grand time with oil prices as they are. That doesn't mean they're controlling those prices. As far as I'm concerned, US companies are nearly irrelevant in setting oil prices. They are very much material in setting gasoline prices, but since there hasn't been an increase in gasoline prices that can't be directly correlated with an increase in oil prices, I'd say you can't reasonably blame the oil companies for the increase in the price of gasoline.

I believe I also stated that OPEC does indeed to exactly what it wants, within realistic limitations. They can't set the price so high that the economies of the industrialized world would be so harmed that demand fell, nor do they wish to price it so high that sources of energy outside their control become attractive, such as US-based oil supplies, which were not cost-effective at $30/barrel, but may be at $45. The US is not a member of OPEC, the US oil companies would LOVE for the price of oil to be high enough that they could start pumping it out of the ground in Texas and Oklahoma again economically, so long as the price also doesn't choke off demand (people suddenly realize maybe mass-transit IS a good idea, or move closer to work, or start buying home windmills and solar panels in huge quantities, or alcohol fuels start to take off, or...).

Rail against the gummit or Big Corporate America all you like, but real-world forces are what set the prices of most things. You can't just ask any old price you like for something if there's even a ghost of an alternative that costs the same or less. Oil is no different.

[bondo]

The problem I see with gas prices is that the normal process of supply and demand don't fully apply. Sure, when gas prices go up we may not go on trips as often. Some people can bus or bike or carpool to work. But for the rest of us, we have to pay whatever they charge, or we lose our jobs. Only at the point where it's cheaper to not go to work would it be economically feasible for me to just not buy gas. As for the gas companies, I know they're trying to rip us off any way they can. Here on the central coast of CA I've seen differences of 20-30 cents between gas stations of the same brand, off the same highway. The only difference is that one looks like it's the only gas station for miles, and the other is closer to a town. It can't possibly cost 20-30 cents more a gallon to transport the gas 2 exits down, and you know the overhead is lower when it's further from the town.

Ahh, that was a nice rant.
--Royce

[lapuwali]

The laws of supply and demand DO work, they're just fairly elastic. If gas prices permanently rose to, say, $5/gallon, would you buy a more fuel efficient car? Or move closer to work? Or consider taking the bus instead? Most people would do one or all of those things. All of those things, if enough people did them, would reduce demand, thus nullifying the price increase from the point of view of the supplier. This is why gas only costs what it does here, and not $5/gallon.

People have to eat, too, and yet food prices don't spiral up out of control because of that. There's been a huge consolidation in the food business over the last 100 years, but food hasn't gotten hugely more expensive (in real terms). There's still enough competition to keep prices low, and keep grocery store margins down below 2%.

Increasing gas prices indirectly affect the price of nearly everything else, since nearly everything you buy has built-in transportation costs, of the goods themselves, and the materials used to make those goods. Drastically increasing the price of gas would also raise the price of food, clothing, etc. This would cause serious price inflation, which would eventually cause wage inflation, and pretty soon it's 1972 again (for all you young 'uns, that was the first major "oil shock" caused by OPEC, which caused an inflation rate of better than 10% in the US, rather than the 2% it's been for the last 10 years). This sort of economic damage puts a lot of noses out of joint, and OPEC hasn't dared do that again since. Countries do eventually go to war over such things. The Nixon administration introduced price controls, and for awhile things looked pretty dicey. Had such a thing happened today, post-Cold War, I have no doubt there would have been a lot more saber rattling on our part to force OPEC to back down again. As it stood, there was instead a sudden surge in the construction of nuclear power plants, fuel efficient Japanese cars suddenly became popular, and OPEC saw the possibility of reduced demand. An little incident in Harrisburg PA put the nukes on hold, everyone started to buy SUVs with half the mileage of the Accords they used to love, and now demand is high again. Until the next time the cycle repeats.

I note that falling oil prices have hurt the US economy (or portions of it) in the past, too. The US oil bidness used to be pretty healthy, with plenty of economical reserves in Texas the and Gulf Coast. Falling oil prices in the late 70s nearly killed that industry, and a lot of Texans found themselves out of work as a result. None of those jobs have returned, although some of them would if the world price for oil rose enough for those reserves to become economical again.