Lower demand equals higher prices, higher demand equals higher prices and falling dollar equals higher prices. It is a business and oil companies don't care what we think, there's a profit structure that has to be maintained throughout the product chain from pumping the crude out of the ground all the way to the retail pump. I've lost track of the number of local and federal committees that have 'investigated' higher fuel prices. All view the business/profit structure and walk away understanding there's no price gouging, it just happens to be normal economics in process.

Our gas is dirt cheap at $3-4/gallon when compared to the infrastructure we maintain to indulge our solo driving habits with mostly inefficient vehicles. Other nations tax it all the way down to residential pothole street repairs, repainting intersection guidelines and vehicle efficiency, now accomplished with our property and sales taxes. The only question is which pocket you want to use to pay for maintaining society's niceties. Americans consider cheap gasoline a birthright, so the government takes what's necessary from another pocket, getting them re-elected and letting the public putt-putt right along in our delusional pleasure.

 

Ok here is the problem with the gas prices. First of all by not buying gas from exxonmoble and shell will accomplish nothing on the gas prices, it might go down a few cents but thats it they are not going to lose money on the gas. The probelm is over seas, with opec, opec has gotten smart and realized that americans depend on oil, so its the whole supply and demand as mentioned above but the problem is, is that there is no shortage of oil, its that when ever gas prices fall here opec cuts prodution, which raises the price on per barrel of oil, which raises gas prices, home heating prices all prices. Now we were suppose to be paying between 22.50 and 26.00 a barrol of oil from opec which was agreed on, did not happend i think its now 36.00. Yes the stickt air quality standards and all that raises the price of gas but not that much only a few cents if that. Also the taxes contribute to about 50 cents a gallon in my state CT, that state and federal and i believe we have one of the highest taxes in our state than any other. Pretty much us as cumsumers are stuck theres nothing that we can really do, we need the oil for our everyday life, Oil is more a utillity now than an luxurey and needs to be regulated price wise, so many things now are regulated but now oil, i would push throgh you congress person or state rep to get oil to be regulated so that we dont have to be paying so high, my opion we should be paying not more than 1.25 for regular, and also as mentioned above its a sales tatect, by having gas at 2.00 a gallon then bringing them down to 1.59 makes it sound cheep when its not, this is a big problem and we as cumsumers should not stand for it....it needs to be regulated, and hear is some food for thought a statistic, for every penny gas prices go up a billion dollars is lost from the ecconmy, thats how dependent people are on gas, and cant spend it on other things so the economy hurts

 

Thats hard to do cut back on driving for some of us that have a fleet that needs to make money.We have to send Bush a strong message.

 

Who agreed on that? Most contracts are for amounts of oil, not pricing. April deliveries are $37.15/barrel as of last Friday. Allowing the dollar to float has backfired, as the administration was warned, due to higher oil costs. Less dollar equals less oil.
War always increases oil costs.

Are you suggesting we invade all oil supplliers, including Canada - who wavers between being our #1 and #2 suplier, to control the price of crude? Better read what started WWII.

As a matter of interest, we're now diverting crude meant for strategic reserves to keep crude (gasoline) as low as it is. Election year, after 2005 it can't be done without a presidential signature because Bush plans to fill our reserves to the brim. That will make for some interesting gasoline prices and interesting speculation as to why.

 

We need to get folks more involved in this issue as a country I mean every body and say we are not going to take this any more. Can say if the election was hingded on oil priceing there would be something done. But as the country sits and not say any thing nothing will be done. The main problem now a days is nobody says anything ware it counts. A great start is to send 1000s of trucks and do a protest like the farmers did a few years ago with there tractors. We also need to see what we have in this country to do our own drilling why should we reliy on other countys to supply us with oil It is bad anough that we sent jobs away from our country.

 

I keep wondering why we don't just drill up in Alaska? Don't they have a supposed huge oil reserve?

 

That is part what I am getting at here. I also thought they spent big bucks on that project 25 years or so ago.

 

Like our manufacturing sector, the cost of production reduces profit margins to where its still advantageous to buy it from Canada and others. The government wants Alaskan oil to fill the strategic reserve. The cost of a barrel of oil is determined by supply and demand. What purpose would it serve for the consumer to exhaust Alaska's reserve when the price of gasoline would be the same no matter where it came from? We currently produce 38% of our own oil, which is purchased by the same refiners on the same commodity markets as oil from anywhere else in the world.

We've started buying oil from Russia, who has a surplus of crude, and by 2007 is expected to become one of our major suppliers when they complete facilities to load directly on to supertankers. By then China's oil requirements will begin to equal ours and with that demand I don't know how anyone can expect our cheap gas to continue at current prices.

 

The biggest thing I get out of this thread is that, other than a couple of posters, most people have no idea how oil companies actually work, how oil prices actually work, and how the price of gasoline is set.

Cheap gas is NOT a birthright.

It amazes me to read that people think gas prices should be regulated like in communist China. Do people not realize that subsidizing the price of gas just comes out of their pockets in the form of tax dollars? The USA is NOT capable of dictating world oil prices, at least not in its current state.

People always respond to this issue based on emotion rather than facts and logic, and unfortunately, when combined with a general lack of understanding of the system, it leads to unrealistic and unfounded opinions. Blame oil companies, and blame OPEC, they're evil. If only it were that simple.

World demand is growing at a much greater pace than world supply, if VIABLE alternatives are not developed, $2/gal gas will be the "good ol' days" before you know it. We're on the tip of the iceberg, and for the most part, still living it up. Start preparing yourself for gas prices in the $5-6/gal range that Europeans are paying, because it's coming.

That's reality.

Kannata

 

A majority of Americans function with that misapprehension regarding a large number of issues. The good old days are gone, never to be repeated, and few have any desire to understand why they're gone. Our government, whom a majority now depend on to do their thinking, certainly isn't going to tell them what happened.

 

Yes the world demand for gas is raising but the point is, is that there is not shortage of gas it seems to me Kannata that you dont know what your talking about. What happends is that everytime the gas price is the us gets below a certain price opec cuts production of crud oil and we get less which raises the price on the crud oil we buy and gas, b/c the us's supply of crud oil is low. Say for example Gas prices go to 1.49 for reg on avg for the country, well opec is smart and they know that we are willing to pay 1.79 even 2.00 so they cut there production crud oil. But the problem with that is that the price of gas will never go back to that 1.49 it might get to 1.59 as an all time low then go back up, opec will never let the price fall alot. We are the largest consumers of crud oil in the world and we get most of it from opec. now no one at all in this thread was telling the us to control gas prices for the whole world, simply saying control gas prices for the US, just b/c we can buy a barrol of crud oil for 35 bucks does not meen china has to get it for 35 they could get it for 40 or 20. If the US insests to OPEC to sell us cheeper or more crud oil which will get our supply of oil up then the prices can be back down to a reasonable rate. And we are currently investigating the situation with opec because there is now shortage of oil, and what opec is doing could be illigal, unless they got by in some loop hole. I will say it again for every penny gas prices go up the United states economy is losing 1billion dollars.

 

golfboy17,

Before we get into my knowledge of the subject, I'd suggest you do a little research on the subject and improve yours a little. Do a search on OPEC, then do a search on global crude oil pricing. Then maybe check out the sites I posted for info on world oil reserves.

Then we'll see if we can have a meaningful debate.

Kannata

 

I suggest you crack the books on supply and demand economics regarding commodities, then take a look at commodity trading and study crude distribution, refining and product distribution.

The US deregulated domestic oil production in the '70s. Are you actually suggesting that OPEC producers provide the US with a 'special' price? It doesn't sound like you've been following what we've been doing to the dollar, resulting in OPEC reducing production to maintain profit margins due to our fiscal irresponsibility.

It isn't Kannata who doesn't know what he's talking about.

 

http://www.opec.com/

Here's another excellent site for those interested in furthering their understanding of global crude oil and natural gas issues.

It is not the website of OPEC, it's a news site dedicated to the oil industry.

Kannata

 

Just so everyone is on the same page when discussing Canad ,the US & Mexico.

The N.A.F.T.A. agreement is what makes sure that Canada has to sell Oil to the states for the OPEC price at US dollars.

I figure the US wants to guarantee having their supplies for as long as possibly,that could be one of the reasons why the uS buys oil from the others.
The one thing about Middle eastern oil is that it is *sweet oil* the best to make gasoline out of.
Canada & Alaska Oil is better for making heating oil.