Gas prices.... Gouging?

[Morrigoon]

Originally Posted by Ghoulish Delight

The problem with just saying "demand will drop if price gets too high" is 1) gas is as close to inelastic a product there is and 2) even assuming its inelastic enough to hit a ceiling, so much of our economy depends on gas that by the time it hits that ceiling and begins to drop, the damage to the economy may be too wide spread. Prices of every single domestic good will be affected as every single domestic good relies on oil and gas. A prolonged spike in gas prices will have long lasting inflationary effects that the market may not be able to absorb.

Yes! and No.

RIGHT NOW, we're dependent on gasoline. If gas price problems are prolonged or continue to get worse, it will become potentially VERY profitable for companies to come up with alternative fuel options. The more expensive gas gets, the more we suffer, the more likely it is that someone will come up with a viable alternative and the more likely the public will embrace it. In that sense, you could view the fuel price problems as a boon for environmentalists - people are reducing their driving, and industry is encouraged to seek alternative fuel choices.

Now, in the short run. It sucks big hairy donkey balls. Believe me, every time my income goes up, gas prices have jumped to take it all away. I know VERY WELL the pinch of current gas prices. And yes, industry IS affected. Yes, gas prices CAN bring our economy to a grinding halt - in the short term. But seen on a medium- and long-term scale, this is, or at least CAN be, a very good thing.

Remember: right now we're at the mercy of OPEC. The middle east only has about a century worth of gas left anyway, so this was always GOING to happen, it's just happening sooner. If we find alternative fuels, and more importantly, there is widespread adoption of the technology, we can kiss OPEC goodbye. Hopefully we'll find someone that we in America have in abundance, so we're no longer at anyone's mercy.

Innovate or die.

[scaeagles]

So we better not do anything like drill for our own oil or anything like that. Wouldn't want to risk te certain environmental disasters of doing that.

The only thing that makes oil prices go down is increased supply. OPEC pretty much controls the worldwide supply. Everyone who opposes offshore drilling and ANWR and exploration and drilling in Utah or Nevada or whatever shouldn't complain a bit.

[Ghoulish Delight]

Originally Posted by scaeagles

The only thing that makes oil prices go down is increased supply. OPEC pretty much controls the worldwide supply. Everyone who opposes offshore drilling and ANWR and exploration and drilling in Utah or Nevada or whatever shouldn't complain a bit.

Hmm, actually, what recent history seems to be showing is that increasing supply ain't gonna do much. Refineries are at or near capacity, so increased supply to the refineries will not equate to incerased supply on the market.

[scaeagles]

Originally Posted by Ghoulish Delight

Hmm, actually, what recent history seems to be showing is that increasing supply ain't gonna do much. Refineries are at or near capacity, so increased supply to the refineries will not equate to incerased supply on the market.

I agree with that 100%. We also desperately need to increase refining capacity. As I mentioned earlier or in some other thread, no new refineries have been built in the US since the 70s. That is simply disgusting. I'd love to talk about the reasons, but I suppose this thread isn't the place for my rant on that.

[Name]

And I am not, thanks..

[scaeagles]

Then you have my complete respect, Name. What bugs me is people who whine about the prices but oppose doing anything about it - as in increasing supply.

[Name]

I ride a motorcycle, exclusively, thus doing my part to reduce demand(small and futile as it may be).

[PanTheMan]

The basic point is not about drilling, or OPEC or Supply and Demand, or some rare sea slug habitat off SB...

The point is GOUGING. If an Oil Company reports 26 BILLION in profit for a Quarter (3 MONTHS!) Dont you think they may POSSIBLY be overcharging?

[sleepyjeff]

Originally Posted by PanTheMan

The basic point is not about drilling, or OPEC or Supply and Demand, or some rare sea slug habitat off SB...

The point is GOUGING. If an Oil Company reports 26 BILLION in profit for a Quarter (3 MONTHS!) Dont you think they may POSSIBLY be overcharging?

The simple solution would be to hedge yourself against high oil prices by buying oil futures

[scaeagles]

Threads start discussion. Discussion moves in a variety of directions. This thread has logically moved into supply and demand issues related to pricing. I'm not sure why there's a problem.