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Thread: Gas prices are highest ever for this time of year

  1. #461
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    Re: Gas prices are highest ever for this time of year

    when i joined the army i was paying 4.80 for a gallon of gas in cali,when i forst started driving i paid 2.85 a gallon which at the time in cali people wanted to trade their trucks for economy cars,that was nearly a decade ago.in texas ive never seen gas exceed 3.80 a gallon and a few months ago in my area it was 2.75 a gallon while many people were paying way more.alot of it is gas taxes,and a very small portion transportation costs.gas itself is lower than five years ago and unless t does an immediate spike in prices,it wont affect anything.if it keeps up at a gradual increase people and employers will gradually adjust costs wages etc to match it,and the world will kept on moving.so if your paying 4-5$ a gallong maybe ou should ask your state why they are charging so much tax on gasoline,especially since none of it seems to go to building new roads like many states promised it would.

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by OpportunityCost View Post
    Attachment 67123363

    So factual!

    On the subject matter however, we have locked up supply by not expanding our refinery capacity. Im anxious to see the impact of the oil shale process on domestic supply. We need every energy supply on the table and every alternate transportation source as a viable commercial enterprise to really make a dent into gas prices. Right now we arent doing everything. We are doing everything with non combustion but we could be doing more with that, too.
    How would you like us to expand our refining capacity? Should the government build refineries (socialism)? Should the government force the oil companies not to close refineries, or to reduce capacity? Because, you know ... that's exactly what they're doing! Conoco to sell or shut Pennsylvania refinery | Reuters
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by Kushinator View Post
    Long term price trends are driven by fundamentals, not short term plays on volatility. By enacting such reforms, you limit producers abilities to hedge against exogenous supply shocks that can emerge from wars, natural disasters, and other types of disruptions. The best way to curb unnecessary speculation is to simply raise margin requirements at various clearing houses. But even that sort of action carries its own risks, as limiting market participation increases the likelihood of information asymmetries that are just as dangerous as short term speculators.
    The problem speculation isn't coming from producers OR consumers, but rather from investment banks and hedge funds. This has the exact opposite of the desired effect; it creates price volatility when the intended purpose of oil futures is to provide price certainty to industries that are heavily reliant on oil, like airlines and trucking companies. Bernie Sanders has got it right. What Wall Street doesn’t want us to know about oil prices - The Washington Post
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by AdamT View Post
    How would you like us to expand our refining capacity? Should the government build refineries (socialism)? Should the government force the oil companies not to close refineries, or to reduce capacity? Because, you know ... that's exactly what they're doing! Conoco to sell or shut Pennsylvania refinery | Reuters
    Something you should be aware of regarding refineries. Several of the big oil companies here in the US are currently selling or closing down their entire refinery operations wholesale because EPA regulations keep driving overhead costs up. Refineries used to be very profitable, thats no longer the case; refineries actually drag down profits on oil companies.

    I never said they should force companies to keep them open or have the government force them to stay open; by the way, thats an excellent straw man, try voicing your own thoughts and let me voice mine ok? I dont put words into your mouth, dont put words into mine.

    There was a time when oil companies desperately wanted to open refineries in the south, southeast and northwest. Guess what the supply implications of that would be and guess what the eventual result of that was?

    With the Shale issue, the time will come again to try to open refineries to make the logistics different for profit on oil. If refineries get opned near large deposits, the gas can largely mitigate supply fluctuations that are used for temporary price hikes every time a natural event hits an area where we have a large group of refineries like the Gulf. Every time a hurricane hits, the price spikes. My argument is that more supply stability and a non maxed out refining capacity would offset some stability but certainly not all of it.

    My original argument stands though: we are not doing everything we can and not applying every resource, we are taxing and impeding some resources to make others viable. Which ultimately means those resources will fail under any economic stress.

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by OpportunityCost View Post
    Something you should be aware of regarding refineries. Several of the big oil companies here in the US are currently selling or closing down their entire refinery operations wholesale because EPA regulations keep driving overhead costs up. Refineries used to be very profitable, thats no longer the case; refineries actually drag down profits on oil companies.

    I never said they should force companies to keep them open or have the government force them to stay open; by the way, thats an excellent straw man, try voicing your own thoughts and let me voice mine ok? I dont put words into your mouth, dont put words into mine.

    There was a time when oil companies desperately wanted to open refineries in the south, southeast and northwest. Guess what the supply implications of that would be and guess what the eventual result of that was?

    With the Shale issue, the time will come again to try to open refineries to make the logistics different for profit on oil. If refineries get opned near large deposits, the gas can largely mitigate supply fluctuations that are used for temporary price hikes every time a natural event hits an area where we have a large group of refineries like the Gulf. Every time a hurricane hits, the price spikes. My argument is that more supply stability and a non maxed out refining capacity would offset some stability but certainly not all of it.

    My original argument stands though: we are not doing everything we can and not applying every resource, we are taxing and impeding some resources to make others viable. Which ultimately means those resources will fail under any economic stress.
    We have too much refining capacity now or we wouldn't be exporting 400,000 barrels a day of gasoline. You must be sniffing too much gas.

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by iguanaman View Post
    We have too much refining capacity now or we wouldn't be exporting 400,000 barrels a day of gasoline. You must be sniffing too much gas.
    Does that mean that every industry that exports product has too much capacity ???

    Absurd comment.

    • "The America Republic will endure until the day Congress discovers that it can bribe the public with the public's money." -- Alexis de Tocqueville





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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by OpportunityCost View Post
    Something you should be aware of regarding refineries. Several of the big oil companies here in the US are currently selling or closing down their entire refinery operations wholesale because EPA regulations keep driving overhead costs up. Refineries used to be very profitable, thats no longer the case; refineries actually drag down profits on oil companies.
    If it wasn't profitable, they wouldn't do it. Most petroleum applications do not use crude, so some kind of refining is necessary. As it is, it's fairly inexpensive for them to do it here, because the energy required to refine crude is available relatively cheaply through using natural gas.

    If it wasn't, we'd be a net importer of gas, not a net exporter, because they'd just refine it in Saudi Arabia or something. Basically, it is profitable for the oil companies to bring crude here to be refined, then to ship out the end product. If it wasn't, they wouldn't do it like that. The fact that gasoline is relatively inexpensive here compared to other places is why they ship it elsewhere. Until it's more profitable for them to keep the gasoline here, they won't. It won't be more profitable unless the price goes up more than it has.


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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by Gill View Post
    Does that mean that every industry that exports product has too much capacity ???

    Absurd comment.
    What it means is that it's ludicrous to argue that our high gas prices are the result of insufficient refining capacity, when we obviously have sufficient capacity not only for our domestic needs, but to make refined fuel the nations No. 1 export product.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

  9. #469
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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by AdamT View Post
    The problem speculation isn't coming from producers OR consumers, but rather from investment banks and hedge funds. This has the exact opposite of the desired effect; it creates price volatility when the intended purpose of oil futures is to provide price certainty to industries that are heavily reliant on oil, like airlines and trucking companies. Bernie Sanders has got it right. What Wall Street doesn’t want us to know about oil prices - The Washington Post
    Investment banks and hedge funds are incapable of cornering commodity markets; there is nothing to build a case for cornering futures markets, because for every long or short order contract, there is a counter-party required to take the other position. And if and when delivery is met, this opens up a plethora risk scenarios for entities holding vast tanks of petro, e.g. natural disaster, leaks, insurance costs, etc.... If a speculator is willing to assume such risk, why would they not be able to profit from it? Speculation can only drive up (or down) prices on very discrete intervals. In the long run, its all based on supply and demand and speculation simply adds liquidity to the respective market.

    P.S. Bernie Sanders is an idiot.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Gas prices are highest ever for this time of year

    Quote Originally Posted by Kushinator View Post
    Investment banks and hedge funds are incapable of cornering commodity markets;
    I've seen nobody argue that they can corner the market.

    there is nothing to build a case for cornering futures markets, because for every long or short order contract, there is a counter-party required to take the other position. And if and when delivery is met, this opens up a plethora risk scenarios for entities holding vast tanks of petro, e.g. natural disaster, leaks, insurance costs, etc.... If a speculator is willing to assume such risk, why would they not be able to profit from it? Speculation can only drive up (or down) prices on very discrete intervals. In the long run, its all based on supply and demand and speculation simply adds liquidity to the respective market.

    P.S. Bernie Sanders is an idiot.
    Why? Easy. Because the positives (increased income for investment banks) are far outweighted by the negatives (higher everything for consumers). All speculation is as used here is those making money doing nothing off the backs of those actually working.

    Oil is a commodity, not an investment vehicle and should be treated as such.

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