Gas Price Outrage!

[Giant Communist Robot]

The day he announced it dropped and was the highest single day drop in history and continued down as more details of his plans were reported. You believe that was a coincidence?

This clearly shows the two are not related. The price you see at the pump reflects mostly the cost of the crude and refining plus margin, not an anticipated future cost. So that price drop was already "in the pipeline" before the announcement.

[Haggis@wk]

The day he announced it dropped and was the highest single day drop in history and continued down as more details of his plans were reported. You believe that was a coincidence?

This clearly shows the two are not related. The price you see at the pump reflects mostly the cost of the crude and refining plus margin, not an anticipated future cost. So that price drop was already "in the pipeline" before the announcement.

I meant the commodity price of crude

[Shapley]

Here is a historical chart of crude oil prices. President Bush announced the lifting of the moratorium on July 14, 2008.

Crude Oil Price History

There is a definite change in the oil price from $145.08 on July 11, to $128.88 on July 18th, coincident with this announcement. The price then declined to below $50 by November.

[Giant Communist Robot]

There is a definite change in the oil price from $145.08 on July 11, to $128.88 on July 18th, coincident with this announcement. The price then declined to below $50 by November.

Well, fine. The thread was about the price of gas, though.

You show the price of crude dropped with the announcement and then declined further. I'm really not all that familiar with the oil market but I'll tell you such a simplistic relationship is unlikely. Was there nothing else influencing the price?

[Shapley]

Was there nothing else influencing the price?

I'm sure there was, but I don't know what. There was a presidential election underway, though I don't know what effect they have on prices.

This was following the big speculative run-up, and also around the official start of the recession. Demand was likely dropping as businesses began to see the slowdown. The run-up of prices was blamed on, among other things, people shifting money from the stock market (which began its historic decline the first week of October, 2007) into commodities and other markets considered to be more stable. There had been predictions of the bursting of the 'oil bubble' for some time. It could be that the lifting of the moratorium was the straw that broke the camel's back, or there could have been another straw. I know not, and know of no way to find out for certain.

[Giant Communist Robot]

I think the price of gas and crude seems higher than it should be. Maybe some relief at the end of the year.

[piqaboo]

For the last decade or so, the price of gas has followed crude up, but not really followed it down.
If it stays at $4+ a gallon, I'll have to start biking to work, which will add 2 hours to my commute each day, but save $4,
or I'll have to get a part time job at mickey D's to cover the cost of gas, thus depriving some teenager of the job experience.
OT's gonna have to add a gas surcharge to the price of having a piano moved. NPLB1 gets 6 mpg

[Haggis@wk]

I charge a $0.50 per mile gas surcharge, the official government figure but now find I'm charging for the tenth of a mile figure. Some clients insist that I use the "official" Google map mileage distances but I usually resist since traffic conditions often require additional travel in order to complete the assignment.

I understand that my clients are facing similar fiscal problems (one questioned a $1.00 tip I paid to a guy to load my vehicle up with 200lbs of the client's product) But If they continue to push, or the price of gas continues to increase, I'll have to decide if the work is worth it.

[Selma in Sandy Eggo]

When I bought Ethyl, for an ridiculous price difference over the rest of the Camrys, any number of my friends were sure I'd lost my (few) remaining marbles. I told 'em it was a philosophical point: I approve of efficiency and think it should be encouraged. Never expected to make up the price difference on the gas savings.

It's beginning to look like I might break even by the end of next year. I might come out ahead.

[Giant Communist Robot]

Obama has called for more drilling--if that idea is right then this announcement should bring a big drop in the price of oil on Monday. And then the price should continue to drop after that. Oil has already had a drop this month, down about $14. Can you believe the timing of this thread and that announcement?

[Shapley]

Obama has called for more drilling--if that idea is right then this announcement should bring a big drop in the price of oil on Monday. And then the price should continue to drop after that. Oil has already had a drop this month, down about $14. Can you believe the timing of this thread and that announcement?

I was thinking the same thing.

[Giant Communist Robot]

Drill, baby, drill! Let's get the price of gas down. Next, maybe he can use his Indonesian contacts to lower the price of cat crap coffee.

[Giant Communist Robot]

Obama has called for more drilling--if that idea is right then this announcement should bring a big drop in the price of oil on Monday. And then the price should continue to drop after that. Oil has already had a drop this month, down about $14. Can you believe the timing of this thread and that announcement?

I was thinking the same thing.

Obviously Obama reads this board. Clearly he gets his sharp economic insight from my posts.

[Giant Communist Robot]

Obama has called for more drilling--if that idea is right then this announcement should bring a big drop in the price of oil on Monday. And then the price should continue to drop after that. Oil has already had a drop this month, down about $14.

Oil down about $1.75 as I post. Nothing unusual. Being the wild-eyed conspiracy theorist I am I see oil dropped a few days before Obama's announcement. Since Congress is exempt from insider trading could that have been some Congressmen in the know taking short positions?

[Giant Communist Robot]

from The Economist

there is significant scope to expand America’s output of oil and natural gas: by the equivalent of 4m barrels of oil a day—roughly a fifth—by 2025, according to a study commissioned by the American Petroleum Institute, a lobby group. But America’s oil output is already growing, for the first time in decades, despite Mr Obama’s supposedly ruinous policies.

...but the rate of growth may be too slow to help much. We need to accept the idea of "importing foreign oil". Or we could all drive electric golf carts.

[Giant Communist Robot]

Still waiting for oil to drop. Obama should re-announce his new drilling agenda.

[Giant Communist Robot]

Crude down a dollar as I write

[Shapley]

The Democrat-controlled Senate voted down the House-approved measure to expand drilling. Mixed signals from the Democrats.

[Giant Communist Robot]

OPEC looks truly irrelevant. Checking Wiki I see that five of the top seven oil producers are not OPEC members. They account for ~35% of world production.

OPEC has never worked well because of cheating. Their quotas are set according to the size of their reserves. When they are unhappy with how much they are allowed to sell, they sneak it onto the market. When they are unhappy with the size of their quota, they lie about the size of their reserves. Now they can't agree on production levels, and Saudi Arabia has said they will raise production anyway.

They haven't been able to honor their agreements amongst themselves and now can't even agree. OPEC seems to exist solely as a self-sustaining bureaucracy.

[piqaboo]

self-sustaining bureaucracy.

That appears to be the definition of a bureaucracy. In fact, they approach meeting the definition of 'life'