Anyone rember the ecomomy being bad before fuel prices hit $4 a gallon? I think the greedy oil companies are responsible for the mess we are in now.

 

I'd have to agree, but this doesn't sound like truck tech to me.

 

Its funny, the more expensive fuel gets and the more you try to conserve it- the quicker you seem to burn it.

 

And now it's on it's way back up

 

Its jumping quick went from 1.99 here to 2.20 over night.

 

For sure. I don't think that you can put the blame solely on fuel prices. Personally I think that it has just added salt to the wound.

 

I hate to say it but I take advantage when diesel prices go up. I get a lot more calls for transport when no one else s willing to drive because of fuel prices.

 

That is absolutely ignorant. Perhaps you should research these ideas before making a statement.

Did you every stop to think that consumer confidence has a dramatic effect on supply and demand?

People are starting to see the light at the end of the tunnel, thus increasing demand on fuel. More demand means higher prices.

Let me guess, someone will respond about the oil companies making record profits... They also made more product than ever before.. It's a simple economic process.

These threads are what make me feel no remorse for the "Average Joe"

Lets complain with no knowledge of anything....

Get educated first, then complain.. it's can't be the other way around.

 

I think I live in a different type of market than most of you guys but I always see the gas stations full starting at 3pm and ending around 7pm. Always no matter what the price is.

 

Actually, you aren't correct either. Before bashing someone else on this forum, please try and do some research yourself too.

During the fuel price bubble last year, oil supplies and reserves were up, and demand was down. Demand was lower than it had been in several years, not just in the U.S., but also worldwide. The price of oil spiked to an artificial high, completely disconnected from supply and demand.

Instead there are other reasons for the price hike. Some like to argue that the value of the dollar was to blame. This only had a relatively small effect. Others say it was the war. No, that doesn't account for the huge spike. Mother nature and all the hurricane activity barely put a dent in the actual oil supply worldwide. So what was the main cause?

Speculative investors are to blame. What happened was oil was being bought and sold with no intention whatsoever of the investor taking possession of the oil itself. Meaning, the futures market was flooded with speculative investors, and these investors were buying oil on paper, with the intent of selling it again to others at a higher price before taking actual delivery. It's estimated that by mid 2008, speculative investors made up 60-70% of the buyers in the oil futures market. If up to 70% of the people buying oil on paper aren't actually demanding oil, you can suddenly see how there is an artificial bubble in the market. It's a clear disconnect from actual supply and demand. It's estimated last year that as many as 27 barrels of oil were being traded for every 1 barrel of oil that was actually demanded.

So if speculative investors were to blame, who started it? For that, you can thank our government. In 2000 our government deregulated the futures market. They eliminated oversight and regulation into oil swaps, and allowed private exchanges with zero interference. In effect, oil could be traded in secret with no government or SEC oversight whatsoever. Who benefited from all of this? Oil companies of course, as they made record profits as demand decreased, not increased (the opposite of what it should have been). Also investment banks such as Goldman Sachs and Morgan Stanley made just as much profit from all of this. In fact, investment banks were trading more oil than the oil companies themselves.

Of course the price of oil wasn't the only factor in our economic downturn, but you need to know that it did have an impact. It is one of several factors that contributed to the global economic recession. With the price of oil skyrocketing like it did, every country in the world was in a bind and consumer spending on a global scale was cut back. This cutback in spending helped reduce consumer confidence.

So in reality, complaining about the insanely high price of oil last summer is valid. After all, it was an artificial bubble that burst, and had a huge effect on the global economy, in a very similar way the housing market crash and banking crash continue to effect us now.

 

Since it's an artificial bubble I'm gong to go buy some with an artificial $20.

No but I do need fuel.

 

prices are starting to go up again. Everything Curtis said is true. Here is what really gets me though.

As a consultant, I do work for several types of companies. A handful full of my clients are swabbing companies. All of them have told me that none of the bigger (shell, exxon, etc...) companies want to drill any new locations with crude at its current price. WTF!, they are still making record profits. They are starting to sound a lot like OPEC. Because of that, 100+ have lost their jobs with these clients.

The arguments of supply and demand is false since they are able to manipulate the supply. Remember, the blame for higher prices on everything was put on the higher cost of fuel. Fuel came WAY down but how much have other prices come down?

Greed, along with price fixing by market manipulation destroyed consumer confidence worldwide. A choice had to be made between buying something you didn't need or paying the light bill, buying food, and putting fuel in your vehicle.

 

It's very hard for people to be on public transportation here in Los Angeles with people working 2-3 jobs picking up kids at different spots having to go get groceries and daily errands. Having a car is a necessity in this area. Even when looking for a job you won't get hired because you don't have a car.

 

You are absolutely correct, I wasn't thinking right.. i was just disturbed by the rash statement.. then myself followed suit.

The value of the dollar was indeed not the cause.. when the dollar regained strength, prices were still high.

I do however thing the hurricane did affect the oil pipelines, but the effect was not felt till a few months later.

This whole oil situation as well as the economic situation could be fixed with a switch to a flat tax economy.

Instead of property tax, income tax and such a simple tax similar to a sales tax should be great..

It would require a tiered approach.. 17% on all purchase except land/property/vehicle..

This would stablize the economy and reward saving..

Just an idea....

 

I've talked to my brother about the exact same thing. He works for an oil company, and processes geology testing samples for oil reserves. He said that some of the sites they have worked on requires oil prices to be more than $100 a barrel before anyone will ever start drilling. Either the drilling/recover costs are too high, or there is just too little oil at a particular site to make it worth going after if prices are too low.

You only hear about it now because of the whole rise and fall of oil prices. Oil companies have known about these reserves for years (and have owned them or the rights to them for a long time), but only recently started to get serious about drilling into these reserves. The reason was as the price of oil increased, these sites were beginning to look profitable to these companies. As a result, they hired more employees, purchased more equipment, and expanded in hopes of tapping into these reserves. Then the market crashed right in the middle of all of this, and many oil companies (especially the smaller ones) are scrambling like crazy to downsize and cut costs. For those that already started drilling at these expensive sites, they are bleeding money right now.

That's just one aspect of the whole picture, and hopefully gives you a bit of insight as to why you were being told that by some of your clients.

Then there is always filling in the blanks for some of the backlash that we see now. Crude oil had an artificially high demand, then oil companies bumped up production, and as a result we have an extra high supply of crude oil, so oil companies now have to cut back production to match the actual demand.

Personally, I believe an accurate and fair market value in today's dollars for a barrel of crude oil should be between $35-$40. This follows a 40 year historical pricing chart of crude oil, and accounts for inflation adjustment as well. People in the oil industry of course want it to be a higher price (some have advocated for a price of more than $60 a barrel), while the average Joe who fills up at the pump would love to see $15 a barrel oil again like we saw in the 90's.

Anyway, now I'm rambling.