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Post by strat on May 6, 2008 1:44:40 GMT -5
BrianB, normally I would agree with you but simple economics must include competition. There is no competition in oil, therefore the rules go out the window. When you are the only game in town you get what you want regardless of economics. If demand for oil dropped prices would go to make up for lost revenue. Oil companies have reported record profits for 13 to14 months now(if memory serves). Why is it that any other group reduces price with an increase in volume? Competition. If demand is up and climbing price should come down. It doesn't because they don't have to.
On a side note I would like to thank everyone who posts on here. I think you are all intelligent, good and compelling folks. You all make me think! THANKS!
James
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Post by bradwisconsin on May 6, 2008 9:21:08 GMT -5
I'd agree that much of it has to do with the lack of up-to-date refineries. Despite what the bigwigs want to say, and I'd include a number of Republicans, it's NOT the supply of oil. I'd venture a huge contributing factor to the high oil prices is the speculative nature of investors. What happens when a hurricance is going to hit the Gulf or oil lines are attacked, the price shoots up. I'd also venture a guess that it goes up sharper when a refinery has to shut down for an extended period.
Ultimately it's all a get rich quick game. I read or heard somewhere that at some point the oil bubble will burst, it's a question of when. And when it does the oil price is apparently going to plummet big time. Perhaps that's why there's the interest rate cuts. To keep lining the pockets of oil investors. While also reducing the value of saving - though the argument is it improves borrowing. And isn't excess borrowing what got us into this mess?
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Post by brianb on May 6, 2008 9:31:25 GMT -5
I agree with you that competition is a component that is removed, but we've created that ourselves by not allowing exploration. Refiners are not making record profits. The exploration companies are making record profits. And, do you know where they are drilling that oil to make those record profits....well it ain't here. If we would allow even the few companies that remain that do explore to drill where we know large reservoirs of oil exist, that would increase the global production pool, thereby reduce the value of a single barrel.
Now, refineries are another piece of the puzzle. Back in the day, there were multitudes of small independent refiners, before government became involved and regulated them out of business. Refiners do not make much more than 7 to 8% profit year to year. That's not what I would call "record" profits. But, because we have squeezed down the number of refineries that can operate in this country if there is anything that upsets even a single refinery's operations, not matter the cause weather, fire, earthquake..etc..there is a ripple effect throught the retail market because the supply/demand ratio is that tight. It shouldn't be.
I didn't want to get into the intricacies of what happened in the 70s and how price fixing in the use on a barrel of crude cause the fuel shortages here, and the effect of those kinds government involvement and screw-ups.
But, it still comes down to the simplest of economic axioms. When supply is less than demand, the price goes up. When the supply exceeds demand, the price goes down. We can talk about the intricate nuances of regulated competition and subsidization vs. full on free market competition if you want. I'm a free market guy. And, I fully believe the government should quit subsidizing energy at any level and let the market work. But, I also believe that the government needs to get out of the way in the short term and let the guys that do...do.
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Post by brianb on May 6, 2008 9:39:54 GMT -5
brad, The days of $20/barrel are over forever. It won't ever drop that low again. Now, there are a number of factors at work right now for why the oil prices remain above $115/barrel. One of those is the Fed rate cuts which weakens the US dollar. All oil contracts until about a month ago were bought and sold in US dollars. That is now changing. There are some contracts that are being transacted in Euros. TINFOIL HAT MOMENT!!!!!! ACK!! ok...whew..escaped that without going down the rabbit hole. Global production is about dead even with global demand, and unless we start going after our own oil to push the OPEC countries to increase their production then they will contitue to set the price where they want to set it by limiting and or increasing production at their whim. I do know this. The US economy cannot survive crude prices at these levels....TINFOIL HAT MOMENT!!!!!  Ok..time for me to go sit in my faraday cage for a little while until the bad voices go away. |
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Post by dieseldog06 on May 6, 2008 10:01:59 GMT -5
BrianB-Wouldn't you also apply your same rationale to farm subdies. If the government would stop subsidizing the big corn ethanol growers, they would dry up overnight or be forced to switch back to growing food, corn, wheat, soybeans and etc. That would immediately take care of the rapidly rising food prices for the world.
I read an interesting take on oil. Since we are supposed to be the major exporter of food to oil producing countries (and others), cut way back on the exports of food unless they cut their prices on oil exports to the US. It would be kinda like "Food for Oil" ;D
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Post by brianb on May 6, 2008 12:13:28 GMT -5
Exactly D Dog. It's simple economics. If something is in demand and the supply is scarce it's more valuable. The farm subsidies are no different than the oil or energy subsidies. I believe that every subsidy on the book should be stricken. If you can't get it done on your own, the you shouldn't be doing it.
Only one problem with the oil for food take, we aren't growing food for food any more, and we aren't exporting as much as we did to those countries and because we aren't the price of food even for them is going up. Kinda crazy what a viscious circle it is..ain't it.
Happens when government gets involved in industry.
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Post by dieseldog06 on May 6, 2008 13:10:36 GMT -5
BrianB- I know you are correct in that we are not growing the food we once did because of the ethanol mandates. I am trying to find some hope in the food lobbyists going against the farmers lobbyists. I posted somewhere else on here the fact that some big names are involved like Coca-Cola, Kraft and etc. The ethanol mandates are cutting into their profits. While no sane person could ever accuse me of being on the side of lobbyists (they have too much control over our government), I see the food lobyists as being useful in this case. For me, I see the ethanol mandates as being the worst blunder this administration has made as it is so far reaching and involves so many areas.
I am still considering checking myself into a mental institution for voting for Bush, however, I stop when I consider what a Gore Presidency would have been ;D
BTW, the idea is "Food for Oil" not the UN's "Oil for Food" with Iraq ;D
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Post by creationist on May 6, 2008 14:54:04 GMT -5
I am still considering checking myself into a mental institution for voting for Bush, however, I stop when I consider what a Gore Presidency would have been ;D You'd probably BE insane when mental institutions get through with you, D Dog! I've heard enough about how they dumb you down with pills that have detrimental side effects. And I'm still considering keeping my mouth shut (or keeping my keyboard from typing words ;D) to rude Republicans when it comes to McCain. But if we say nothing, nothing will get done! Which reminds me of the title of this thread . . . I think we need a change in strategy, though. The convention is in the first days of September--it's been nearly four months since Fred quit campaigning, and now it'll be four months before the convention. Isn't there SOMETHING we can do more effectively? We need to discuss this at the "FOCUS" thread (in the "General" section). |
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Post by dieseldog06 on May 10, 2008 8:31:30 GMT -5
This is a great story that other countries are returning to "conservatism." I just wonder what Mr. Medved means by them adoting our policies and values. Which ones would they be, the liberal values or the conservative values  michaelmedved.townhall.com/blog/g/1581727f-d8ba-459e-a956-1acf1383ffa7On a positive note, maybe our voters, that pay attention to the news, will see that these countries are moving away from sociliasm whch is what the dumbocrats are pushing. The dumbocrats are always a day late and a dollar short  |
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Post by rinoHUNTER on May 10, 2008 9:12:15 GMT -5
Ha! Let us never forget the DUMBOCRATS are SICK IN THE MIND!!!
AND, the "neo-cons" are too!!! Folks, this still boils down to one thing,
THIS IS A WAR OF THE SICK VERSUS THE WELL... And it will never end,
LIBERTY IS THE ULTIMATE RESPONSIBILITY, AND FREEDOM AIN'T FREE...
Do you guys in your Faraday Cages ever consider the fact that the "economy" is CONTROLLED in order for the most EVIL of all people
to make OUR money THEIRS??? They use all these economic "tools"
to our disadvantage, right? Yes, they use OUR labor and "taxes" to take us down, once and for all... That is SICK MINDED, right? EVIL is SICK.
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Post by creationist on May 10, 2008 15:37:21 GMT -5
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Post by creationist on May 10, 2008 15:48:10 GMT -5
This is a great story that other countries are returning to "conservatism." I just wonder what Mr. Medved means by them adoting our policies and values. Which ones would they be, the liberal values or the conservative values michaelmedved.townhall.com/blog/g/1581727f-d8ba-459e-a956-1acf1383ffa7On a positive note, maybe our voters, that pay attention to the news, will see that these countries are moving away from sociliasm whch is what the dumbocrats are pushing. The dumbocrats are always a day late and a dollar short Wow, good news! |
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Post by creationist on Nov 3, 2008 16:40:19 GMT -5
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Post by bradwisconsin on Nov 4, 2008 9:58:58 GMT -5
Staying on the economic growth path or moving to the social-welfare path of old Europe.
Did you know the conservative candidate in France actually won because people saw what a socialist policy will do to a country? If only Americans would look at things ....
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Post by krell on Nov 4, 2008 16:22:57 GMT -5
Staying on the economic growth path or moving to the social-welfare path of old Europe. Did you know the conservative candidate in France actually won because people saw what a socialist policy will do to a country? If only Americans would look at things .... Excellent supporting evidence Brad. |
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