planespotting
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When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:00 am

I've been sittin in the main library at the University of Iowa, putting off my two 250 word opinion papers that are due in 3 hours, thinking about stuff.

something occured to me while reading a thread about gas prices. When oil prices inevitable tumble back down to the *??reasonable??* price of $50-60/ barrell (ha), and average gas prices go back down to the $2 range, what do you think will happen. There are many folks in the United States who have consciously made a decision this week to conserve their gas, especially since this was the labor day weekend. Accident numbers were down drastically this year (preliminary numbers), which suggests that there are far fewer people on the roads than normal (obviously a lot of people went out on the roads anyway) probably only 85-90% of what is normally out there, which is quite a big change. Which means that the demand for gas, at the moment, is lower than normal. Which is probably helping keep gas prices hovering around $3.09 (it's been 3.09 or so around here for the whole week).

So when the supply starts back up whole heartedly and oil starts being refined into gasoline and deisel again, and people start hearing about it, what is going to happen? Are people going to go hog wild on gasoline, thinking that $2.50/gallon is cheap and just drive the shit out of their cars, or are they going to realize that it wasn't that hard to walk to the store as opposed to driving the car, or take public transportation, etc..etc..

I'm not talking about aviation fuel, as that demand is sort of fixed based on the demand for seats on the airlines and what not, and i'm not talking about deisel fuel, which is mainly used by the transportation industry. I'm talkin about straight up gasoline, which the majority of is used by all of us in our own automobiles.

If people start driving a lot more with lower gas prices, will that drive demand up enough that supply cant' keep up so oil will be more in demand for refinement which will cause all the prices to go up again...or are people gonna try and conserve gas even more based on their experiences in the past week, which could even drop the price of gas even more.

I wish i knew more about supply, demand and commodities...
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satx
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:11 am

The only thing that's certain is that the price of oil and any other finite resource will eventually increase over time. What Americans do with their driving habits is anyone's guess, but my guess is that they will continue to drive large vehicles without demanding any substantial efficiency improvements for at least the next 100 years. That's not to say they won't whine and complain, possibly even louder than any other single country, but they will not materially alter their purchasing and recreation decisions in significant numbers for more than a brief period (up to a few years) after any initial oil shock hits the market.
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TedTAce
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:12 am

Quoting Planespotting (Thread starter):
250 word opinion papers

Looks like you got one of them here...
This space intentionally left blank
 
NoUFO
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:14 am

Why should oil prices inevitably go down to $ 60/barrel? I don't say it won't happen, but how can you be so sure?

[Edited 2005-09-06 21:17:19]
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AeroWesty
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:16 am

Someone please wake me up when I can fill up at 53¢ per gallon. Thank you.
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AsstChiefMark
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:22 am

I remember gas at 28 cents a gallon. The price has gone up ever since and has never permanently gone down. There are short-lived dips to appease the consumer, but they never last.

Mark
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planespotting
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:22 am

Quoting NoUFO (Reply 3):
Why should oil prices inevitably go down to $ 60/barrel?

good question, im just saying that that was the price of oil before the de-stabilization of the US oil market (from Katrina). It is logical to say (isn't it???) that when market conditions return to normal (100% capacity in oil pipelines and refineries in the gulf states) that oil should return to its place (at least briefly) hovering in the $60/barrell range.
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NoUFO
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:32 am

Right, I forgot that that was the price before Katrina caused another jump in oil prices. At first I thought that was the price before 9/11 and all that.
Sorry, it's probably getting late here ...

Edit: Dang, I should stop posting ...

[Edited 2005-09-06 21:33:32]
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planespotting
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:39 am

dann sollten Sie vermutlich schlafen gehen
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cfalk
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 4:54 am

Good question.

I think that oil will temporarily come down to the upper $50-lower $60 range as we come off of summer, and people have this recent gas shock fresh in mind, reducing demand. But knowing America, I think they will drive as many miles next year as this year, AOTBE. You Yanks can be rather thickheaded at times.

That is why I hope and pray that the Bush administration use this opportunity to put in place meaningful conservation measures, while people still have it fresh in their heads. For example, exhorbitant annual road tax for any vehicle with an engine larger than 3 or 4 liters, or by horsepower. Or a new requirment that any new car or SUV sold must be capable of 30 mpg - no exceptions unless you are a farmer, towtruck driver or something. There are many way is can be done without hurting the poor while sticking it to Hummer owners.

I am pretty certain we will see $100 per barrel next year.

Charles

[Edited 2005-09-06 21:58:44]
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aa777flyer
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:16 am

Quoting AeroWesty (Reply 4):
Someone please wake me up when I can fill up at 53¢ per gallon. Thank you.

I think Bob Denver will wake up before that happens.
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ANCFlyer
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:19 am

Quoting AsstChiefMark (Reply 5):
I remember gas at 28 cents a gallon.

Damn, you're getting  old   biggrin .

My driving habits don't change much . . . and rarely do I exceed 5000 miles a year . . . I don't have to use my personal vehicle to commute to work, most of my driving involves summer trips within Alaska towing a camper.

I do not foresee gas/diesel fuel prices dropping as much s they have risen even if oil becomes abundant. The market will bear only so much, and we haven't gotten there as yet . . . even if oil prices drop, refined product costs will stay high . . . perhaps a few cents shaved off here and there, but that will mostly be competition between the stations sharing a street corner and not be directed at saving the consumer anything.

We're stuck, I'm afrad with higher fuel prices . . . including heating oil and natural gas . . .

As long as we'll pay, the oil companies will charge . . .
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TPASXM787
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:32 am

Quoting Cfalk (Reply 9):
You Yanks can be rather thickheaded at times.

Big problem is a complete lack of public transportation. I live in Clearwater Beach, FL and work in Tampa, FL. I have a 25 mile drive each way to work. I also have a Jeep that I bought when gas was $1.29 a gallon. Problem is I have no other way to get to work. I'm the only one in my small office that lives where I do. There's no tube or metro or subway in my area, in fact all we have is a shoddy excuse for a bus line. I think that this is a big issue in most American cities. NYC, Atl, and few others have a useable public transportation system, the rest of us are pretty much screwed.
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ltbewr
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:32 am

There may be a slight leveling off of pricing and demand due to pricing, mainly by the lower income classes having no alternative. I suspect crude prices to hover at $55-65 range for the next several month, due to the huge increase in demand for oil in China. The worst spikes of gasoline prices in the USA will probably fade down, for a National average in the $2.60-2.80/gallon range by later this year, as refining capacity returns. One problem could be very high heating oil and diesel prices this winter in much of the USA, especially if a cold winter. I do agree that a stiff tax like $2000-3000 by the Federal government on newly purchased poor mileage vehicles, and states having an annual 'guzzler' tax of perhaps $300-1000/year on those same vehicles, may be important deterrent to be considered.
 
satx
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:48 am

Quoting Cfalk (Reply 9):
That is why I hope and pray that the Bush administration use this opportunity to put in place meaningful conservation measures, while people still have it fresh in their heads.

Please tell me what exactly you're basing this hope on? What in Bush's entire history gives you any legitimate reason to believe he would even entertain any meaningful conservation measures capable of impacting average consumers?

 confused 
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ANCFlyer
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 5:59 am

Quoting LTBEWR (Reply 13):
I do agree that a stiff tax like $2000-3000 by the Federal government on newly purchased poor mileage vehicles, and states having an annual 'guzzler' tax of perhaps $300-1000/year on those same vehicles, may be important deterrent to be considered.

Perhaps the annual guzzler tax, but I kinda think if I can afford a $40,000 BAFDT, I can afford another $2-$3-$4K on top of that for a guzzler sales tax on the initial purchase.

I don't think either will happen . . .

I think what will drive people away from the SUVs and psuedo SUVs are higher prices at the pump. People forget so easily . . . and if they pay a guzzler tax at initial purchase or a once a year it will fade into their memory quite quickly . . . but getting hit every couple of days at the pump will be a constant reminder.
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planespotting
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 6:13 am

hmm, what about like a higher fuel tax for SUV's...something like, SUV only lanes at the gas stations where the gas tax is significantly higher than for the average car? Probably be hard to implement and keep going, but in the long run that might be what is necessary.

Imagine if you had a big SUV or truck that got 10mpg and you had a 25 gallon tank. paying $3.00/ gallon now to fill up your tank, you're basically paying around $65 every time you fill up (assuming you don't run your tank bone dry everytime before you get gas), and you have to get gas every 3 days. So thats about $450 every 3 weeks in gas (get gas 7 times in a span of 21 days). What if the law was made so that in addition to the tax already factored into the gas price, you had to pay an additional 25% tax on the end of every gasoline transaction for your SUV or truck. SO instead of paying $65 every time you filled up your tank, you pay an extra $16 or so just for having that big gas guzzling car, for a total of $81 per fill up. Considering normal usage (as stipulated above), over a 3 week period that SUV or truck owner would not pay $450, he/she would be paying upwards of $567. Quite a lot of money, and quite a lot more tax revenue that would hopefully be put towards the funding and reserach for experimental/renewable energy sources.


who's with me!?
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cfalk
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 6:25 am

Quoting TPASXM787 (Reply 12):
Big problem is a complete lack of public transportation.

That is one problem, and uncorrectable at this point. The main correctable problem is the Americans' love of big cars - far, far larger on average than any other industrialized nation. There is no need for a Suburban if you only fill it up once every 2 months - you can rent a U-Haul when you need it. You have no need for a Hummer unless you live on top of a mountain in Montana with no roads. And what do you need a 3-ton sedan with an 8-liter engine?

Quoting SATX (Reply 14):
Please tell me what exactly you're basing this hope on?

You suffer from the assumption that nothing will make Bush act against what you percieve are his oil interests. Granted, he has been woefully negligent on this issue. But I believe if enough people write to the White House and demand that he implement drastic conservation measures (not just demanding cheap gas, mind you), he and members of congress will listen. But you'll have to jump and scream for it.

You must have hope in order to succeed. The only people sure to fail are the hopeless.

Quoting ANCFlyer (Reply 15):
Perhaps the annual guzzler tax, but I kinda think if I can afford a $40,000 BAFDT, I can afford another $2-$3-$4K on top of that for a guzzler sales tax on the initial purchase.

I'm talking much more drastic. Any car that cannot achieve 30 mpg HWY will be taxed an extra $10,000 EVERY YEAR. Any car that achieves better than 40 mpg HWY will pay no tax at all.

That would wake people up...

Charles
The only thing you should feel when shooting a terrorist: Recoil.
 
satx
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 6:45 am

Quoting Cfalk (Reply 17):
You suffer from the assumption that nothing will make Bush act against what you percieve are his oil interests.

Oil interests? Gross negligence? Complete incompetence? Pure ignorance? Who cares why?

Quoting Cfalk (Reply 17):
Granted, he has been woefully negligent on this issue.

You don't have to tell ME!

Quoting Cfalk (Reply 17):
But you'll have to jump and scream for it.

I've jumped, screamed, and written to everyone who represents me on the federal level. I've even donated to environmental campaigns year after year. So far the Bush administration hasn't even saw fit to throw us the smallest little bone, let alone extend any olive branches.

Quoting Cfalk (Reply 17):
Any car that cannot achieve 30 mpg HWY will be taxed an extra $10,000 EVERY YEAR. Any car that achieves better than 40 mpg HWY will pay no tax at all.

You talk like the EPA has been given giant melon-sized balls when in reality it has been castrated with a dull rusty knife.
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aa777jr
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 6:54 am

Oil futures is a sick and twisted market. God forbid the Big Three to let the consumer purchase a car that runs off hydrogen. It's prolly been sitting in a Ford basement, locked away for the past ten years.
A liberal is a man who is right most of the time, but he's right too soon.
 
slider
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 7:04 am

Quoting Aa777jr (Reply 19):
Oil futures is a sick and twisted market. God forbid the Big Three to let the consumer purchase a car that runs off hydrogen. It's prolly been sitting in a Ford basement, locked away for the past ten years.

You laugh, but there's probably some truth to that.

We've got the technology and actually Mazda is leading that charge.

I hope they succeed.
 
PHLBOS
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 07, 2005 7:06 am

Quoting Cfalk (Reply 17):
Any car that cannot achieve 30 mpg HWY will be taxed an extra $10,000 EVERY YEAR.

2005 Fuel Economy Guide

According to the above-guide, a lot of mid-size cars (including many Toyota Camry, Nissan Altima, Nissan Maxima models) would get hit with your suggested tax. That would not set too well with the so-called middle-class families once they realize that their cars would be targeted as well as the yuppie SUVs.

[Edited 2005-09-07 00:15:53]
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B744F
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RE: When Gas $ Goes Back Down..(inevitable)

Thu Sep 08, 2005 6:15 am

Quoting Aa777jr (Reply 19):
Oil futures is a sick and twisted market. God forbid the Big Three to let the consumer purchase a car that runs off hydrogen. It's prolly been sitting in a Ford basement, locked away for the past ten years.

I remember BMW had a hydrogen prototype 7 series years ago, I think it was late 90s. Never heard anything since then
 
martinairyyz
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RE: When Gas $ Goes Back Down..(inevitable)

Thu Sep 08, 2005 7:36 am

Quoting Planespotting (Thread starter):
When oil prices inevitable tumble back down to the *??reasonable??* price of $50-60/ barrell (ha), and average gas prices go back down to the $2 range, what do you think will happen.

That will never happen, the oil companies, including Bush's company, wnat to make as much money as possible and will not put he prices down!
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AC777LR
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RE: When Gas $ Goes Back Down..(inevitable)

Thu Sep 08, 2005 10:16 am

Quoting MartinairYYZ (Reply 23):
That will never happen, the oil companies, including Bush's company, wnat to make as much money as possible and will not put he prices down!

Oh you are always looking at a way to knock the Americans. Go watch Elton John kid.
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cfalk
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RE: When Gas $ Goes Back Down..(inevitable)

Thu Sep 08, 2005 2:25 pm

Quoting MartinairYYZ (Reply 23):
That will never happen, the oil companies, including Bush's company, wnat to make as much money as possible and will not put he prices down!

You do not know how oil companies work.

If oil prices stay stable (even at current levels), major oil company profits will be at the same level as they were 5 years ago. They make about $30 per barrel for refinement and distribution, both 5 years ago and today.

If prices increase over time, they make tons of money, due to purchases on the futures market.

If prices decline over time, they will lose huge amounts of money, again due to futures.

You should try to understand that these profits seem larger than they are due to various inventory accounting concepts at work, such as FIFO, Standard Costing, Replacement Costing, etc.

Charles
The only thing you should feel when shooting a terrorist: Recoil.
 
BigOrange
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 1:52 am

I hope the price goes back down. I drive over 30,000 miles a year.

Having said that, it's still cheap to me! Up to 3 years ago I was paying the equivalent of $5 per gallon in the UK. If I was still there I would be paying the equivalent of $7 a gallon now!
 
satx
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 4:34 am

Quoting B744F (Reply 22):
I remember BMW had a hydrogen prototype 7 series years ago, I think it was late 90s. Never heard anything since then

Can you say "Publicity Stunt?"

People talk about hydrogen as if it was the promised fuel of the future, even though it has an extremely long path yet to prove itself. Never mind that the emissions will not likely be improved much if at all over conventional fuels thanks to all the energy it will take to extract and transport all this hydrogen in the first place. Does anyone think that new solar and wind farms will be supplying this energy? More likely we'll be using mostly coal fueled plants, with maybe some natural gas and 'clean' nuclear thrown-in here and there for good measure.
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seb146
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 5:57 am

Quoting Cfalk (Reply 9):
That is why I hope and pray that the Bush administration use this opportunity to put in place meaningful conservation measures, while people still have it fresh in their heads.

Yes, but the Bush administration has it's hands in all levels of oil. Why would they want to see prices go down? Why would they want to support infrastructure like public transportation so the public can become less dependant on their cars? That would mean they would lose money.

GO CANUCKS!!
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sccutler
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 12:54 pm

Quoting Seb146 (Reply 28):
Yes, but the Bush administration has it's hands in all levels of oil. Why would they want to see prices go down? Why would they want to support infrastructure like public transportation so the public can become less dependant on their cars? That would mean they would lose money.

For example...?

(Please, be specific)
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L-188
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 1:05 pm

Quoting Cfalk (Reply 17):
I'm talking much more drastic. Any car that cannot achieve 30 mpg HWY will be taxed an extra $10,000 EVERY YEAR. Any car that achieves better than 40 mpg HWY will pay no tax at all.

Jesus Charles, I thought you where against the redistribution of weath through taxation. I would point out there is big worries in England because many of the farmers and truckers are going to blockade filling stations. The 75% they pay in taxes on fuel.

I know that you understand that as costs for fuel go up, the costs to transport and to manufacture go up. This will result in less consumption and trigger a reduction in economic activity. It was pointed out to me that the last 4 recessions in the US where caused by oil prices.

Listen, right now I think we are at the cusp where oil will be too valuable to burn as fuel. The example I use is that we used to use oak as firewood. Hardwood, holds a lot of energy. But today nobody uses it to burn...it is more valuable as a structural material. The same will be true of oil.
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777ER
Crew
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 5:35 pm

Petrol prices went down in New Zealand yesterday, its expected to drop more shortly.
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AIR757200
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RE: When Gas $ Goes Back Down..(inevitable)

Tue Sep 13, 2005 10:45 pm

I drive a supercharged car that requires minimum octane of 91 (so obviously, I purchase the 92/93-standard octrane rating)--- During the gas spike, I was lucky enough that my sugercharger belt/tensioner broke during a trip to the bar so I had parked it when O-93 was about $3.59/gallon here in Detroit. Then when the car was finally repaired (I wasn't in a rush)-- I still had a half-tank of "$2.65/gallon gas" from a previous fill-up.

It all worked out where the maximum I've paid during the past few weeks with the spike was $3.19/gallon. Today will probably need a filling, I'm expecting to pay $2.89-$2.99/gallon.
 
seb146
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 14, 2005 4:58 am

Quoting SCCutler (Reply 29):
For example...?

Using the Portland to Seattle Amtrak run. Using the last figure I paid, it was $65 round trip. If I had driven, it would have been $50. But, I would rather have my dollar go to supporting infrastructure than giving profits to big oil. See, out of that $65, money goes for upkeep of the railroad, and, hopefully, adding more trains. Out of the $50 I would have paid in gas, some of that would have been for taxes for roads, which is great. But, beyond that, some of that goes to pay for attendants, pumps, transporting the fuel, and the rest goes to the company.

GO CANUCKS!!
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B744F
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 14, 2005 5:01 am

Quoting Cfalk (Reply 25):
If oil prices stay stable (even at current levels), major oil company profits will be at the same level as they were 5 years ago. They make about $30 per barrel for refinement and distribution, both 5 years ago and today.

So why have companies posted record profits these past 2 years?

Quoting Cfalk (Reply 25):
If prices increase over time, they make tons of money, due to purchases on the futures market.

If prices decline over time, they will lose huge amounts of money, again due to futures.

In a perfect world, yes. But they will not set themselves up for disaster. Oil companies do not put as much bet on futures as investors do.

Quoting Cfalk (Reply 25):
You should try to understand that these profits seem larger than they are due to various inventory accounting concepts at work, such as FIFO, Standard Costing, Replacement Costing, etc.

Yes of course, infact I just saw the CEO of Unocal in the welfare line.
 
AA777
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 14, 2005 5:16 am

I say that if Americans dont want such high prices, we should show the petrol companies that they cant make us pay that much. (BOYCOTT!!) Yes, much of the price is due to the high cost of oil per barrel, but a lot of it is also just because the oil companies CAN make us pay that much, because we will pay. Lets go a week (Maybe even less!?) without buying gas. See what happens to prices then....

Yes, I know millions of Americans need their cars to get to and from work... but most ppl can avoid the gas pump for quite a while if they avoid driving here and there at the drop of a hat.

-AA777
 
PHLBOS
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 14, 2005 5:26 am

Quoting AA777 (Reply 35):
Yes, I know millions of Americans need their cars to get to and from work... but most ppl can avoid the gas pump for quite a while if they avoid driving here and there at the drop of a hat.

A good way to cut down on unnecessary driving would be to combine trips and walk or bike to distinations that are close to home and don't require any cargo hauling.

Another idea would be for states to reinstate blue laws that required most businesses and shops to be closed on Sundays; that would curtail a lot of commuter driving.  duck 

Keep in mind, that it wasn't until the early-to-mid '80s that most states did away with most of their blue laws. That's right, most stores, shops, etc. were closed on Sundays during the price hikes of the '70s.
"TransEastern! You'll feel like you've never left the ground because we treat you like dirt!" SNL Parady ad circa 1981
 
satx
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RE: When Gas $ Goes Back Down..(inevitable)

Wed Sep 14, 2005 6:05 am

Quoting PHLBOS (Reply 36):
Another idea would be for states to reinstate blue laws

You think blue laws are unwanted? Try calling them a green law and see what kind of reaction you get!  Big grin
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