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Who Controls The Gas Prices ?


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#16 Hipshot

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Posted 25 April 2008 - 04:10 PM

Wees, back in the late 70s we had a fuel shortage here and President Carter dropped the maximum speed from 70 to 55 nationwide for years. It was like the nation went into slow motion, except that CB radios and radar detectors had just become popular - then that boomed. Running Smokies became a great sport - Smokey Bears being the nickname for hiway patrol troopers of many states who wore Campaign Hats like Smokey-The-Bear wears, also seen on Drill Instructors, National Park Rangers, etc. Texas troopers have always worn Stetsons with the traditional Cattleman's Crease, but they still got the nickname from CB talk and some movies made at the time about the sport.


Just a technical correction, Dandy Don, the 55 MPH limit became National Law in 1974, under President Nixon, in response to an oil shortage at that time. It was a provision of the 1974 Emergency Highway Energy Conservation Act. You're right about the CBs and stuff during the late 1970's, though.

In its defense, the 55 MPH limit did result in an initial drop in highway fatalities, although it wasn't sustained. In 1987, Congress permitted states to raise speed limits to 65 mph on rural Interstate highways. In 1988 they extended the same 65 mph limit to any rural roads built to Interstate standards even if they were not signed as Interstates. Congress lifted all speed limit controls in 1995.

Regarding gas prices, both Presidents Nixon and Carter instituted price controls. It did keep the prices down, but since the price of gas is influenced mostly by market forces, gas shortages (and long lines at pumps) were the result. There were large supplies of crude in takers offshore, but they couldn't be sold. Oil companies couldn't make a profit (or avoid a loss) so the crude remained unsold.

Rick

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#17 BubbleBoy

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Posted 25 April 2008 - 05:58 PM

What really cracks me up about gas prices today is how they keep pricing it with that trailing 9/10ths cent per gallon. Who cares anymore whether it costs $3.499 or $3.50 per gallon? How much gas does that last 1/10th of a penny buy you anyway? Not even the fumes.

Heck, just round it up and take the last 1/10th of a penny from us too. Think of all the money the stations will save not having to print those little numbers on their signs. Otherwise, if they want to keep using this pricing strategy they should lower prices to $0.999/gal. At that price, the tenth of a penny means something.
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#18 Bubble2Bubble

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Posted 25 April 2008 - 07:01 PM

OK, I have put all your comments and replies into my Super Computer with a 233 processor... BTW.... and found out an interesting point.

I wonder if we will ever really address the energy situation before the last drop of oil runs dry... yes, I know that will be some time. Real answers are needed, now IMHO.

Thanks Dr Bill
So I pressed the print button....
O My :clapping:
The printer/fax machine went wild and put out this message...

Do You Know How Much Its Going To Cost Us To Convert All Are Stations To The Fuel Of The Future ?


Hydrogen or Electric I'm Thinking ?

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#19 Mermaid Lady

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Posted 25 April 2008 - 10:02 PM

Want to cut your gasoline expenses by more than 10%?

Driving 60 in a 70 mph zone saves an average 4 mpg.

I didn't believe Jimmy Carter at the time, but he was right.

What is in in the UK now? $8?


I can attest to that. I drive 65 mph in my Subaru and get 31 mpg hwy vs 27 mpg when I go 75
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#20 Mermaid Lady

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Posted 25 April 2008 - 10:05 PM

I'm a small business man and these gas prices are cutting into my bottom-line :banghead:
I am in a competitive market where people shop over the price of one dollar. I'm between a rock and a hard place because if I raise my prices on my products to cover this increase I might possibly loose my customer base, not to mention what Dive Operators are going through....

Your Thoughts
Bubski


Two words, my friend:

Commodities Traders

They're the Money Changers of our time.
Cheers,
Teresa,
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Mermaid Lady
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#21 BubbleBoy

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Posted 26 April 2008 - 06:00 AM

Here's another thought for you. I've got a client who runs a plant that makes bio-diesel out of chicken fat and waste grease he collects from restaurants. Maybe we can all eat our way out of this mess. Keep flipping those burgers baby. :banghead:
BB

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#22 Hipshot

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Posted 26 April 2008 - 08:35 AM

Two words, my friend:

Commodities Traders

They're the Money Changers of our time.


Teresa,

I'll have to concede ignorance here. It's my impression that gas prices are driven by the market. There's a certain amount of crude that's readily (and inexpensively) available. However, increased demand, partially due to economic expansion in developing countries such as China and India, have forced the oil industry to obtain crude from more costly sources.

We (the US) aren't helping matters with so many people driving eight-cylinder SUVs, mini-vans, and pickup trucks when smaller vehicles would serve their purposes. This increases demand and results in a greater proportion of a gallon of gasoline coming from a more costly source of crude.

I don't see the connection with commodities traders, as it appears to me to be a natural economic process. Going back to the previous paragraph, it's not easy to see ourselves (collectively) as the party at least somewhat at fault. How do commodities traders fit in here?

Rick

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#23 running_diver

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Posted 26 April 2008 - 09:47 AM

I don't see the connection with commodities traders, as it appears to me to be a natural economic process. Going back to the previous paragraph, it's not easy to see ourselves (collectively) as the party at least somewhat at fault. How do commodities traders fit in here?


Commodities speculators buy and sell contracts to buy or sell a commodity at some date in the future. Since they never actually buy or sell the commodity itself, they have no real effect on supply or demand but can exaggerate price swings. All large companies that use commodities employ commodity traders to try to get the commodities at a lower price. A great example of this is Southwest Airlines locked in most of their 2007 fuel at 2006 prices. If a large company ends up locking in prices higher than they would otherwise have because of speculators, the price can get passed onto the general public. It's rare that this happens.

Recently the press and OPEC have been blaming commodity traders for the price of oil. It's not really the case. The real secret is that while demand has been increasing, supply has dropped. Iraq, Mexico, Venezuela, and Russia are all having infrastructure problems. Nigeria has political unrest. Saudi Arabia hasn't invested in enough new wells new increase output to meet the new demand.

Contrary to what the politicians are saying, there is no short term solution. The best we can do is to try to use less energy wherever practical. I've got my eye on GM's new dual mode hybrid system. It should be available in smaller vehicles later this year.

Ross

#24 BubbleBoy

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Posted 26 April 2008 - 11:12 AM

I think Goldman Sachs recently did a study that showed about $10-20/BBL of the current crude oil price is due to futures market speculation. The rest is real physical supply demand economics.

The problem with the oil futures market is that it’s become the tail wagging the dog. A high percentage of the physical oil supply contracts have their prices indexed to futures market prices. It’s been that way for many years. Whereas it’s not a crime to speculate in the futures market, driving up those prices causes physical supply contract prices to rise too. That means for every dollar the speculators try to make in the futures market, it costs the rest of us about $100 more at the pump. Unfortunately, a big chunk of that extra $100 isn’t even staying in this country. It’s going into OPEC’s pockets.
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#25 weescot

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Posted 26 April 2008 - 12:49 PM

In Sept 2000, there were mass protests by road haulage companies in the UK who complained at an increase on tax. I brought the contry to a standstill - literally. It worked.

Here in Abu Dhabi, believe it or not, they are already investing serious research into alternative energy sources - something else they have plenty of - Mr Sun :D

But the best perk of living here is not just the cheap fuel and the sun - it is the diving in Musandam, Oman. I saw a total of 8 stingrays today all in the same place, plus several others under some rocks. We were 4 very excited divers :banghead: Incredible. The site is called Octopus rock, but we have renamed it stingray central :o Sorry, slightly off thread but too cool not to share.
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#26 KeithT4U

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Posted 26 April 2008 - 02:10 PM

Things to think about fuel prices.

When Oil was $60 a barrel fuel cost around $2.00 a gal. Now Oil is $110 a barrel and fuel costs $4.00 a gal. This would only be "fair" if oil prices made up 100% of fuel prices but since there are refining costs that have not changed the jusp is partly caused by greed on an epic scale.
Diesel fuel is used by large trucks because it is trash left over from making gasoline and at one time was half the cost of gasoline. The part of oil used for diesel is also used for home heating in places like the northeast so every winter diesel prices run up ahead of gas and then after winter come back to "normal".

I drive an average of 500 miles a day at 6 miles to the gallon and I am very happy that I do not need to pay that bill. Last time I got fuel it was $4.46 for diesel fuel. You will be here soon.


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#27 Racer184

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Posted 26 April 2008 - 03:50 PM

Now for something completely different: the 'upside' of high gas prices.
People look at my truck and say "how much gas does that use?"...
I say "I haven't filled up the tank in two months."
They say "You haven't filled up with gas in nearly two months? That's not possible !"
I say "It is possible and it is true!"

I have bought gas, but I cannot fill it up anymore. The pumps shut off at $50 or $75 which means I can't fill it up :D
Can you imagine... eventually I will be able to truthfully say "I haven't filled my gas tank in a year" :)
If I could fill up I would only have to go to the gas station once a month.

I heard Johnny Carson tell this one...
A 85 year old man without a car living in LA claimed he was much stronger than he was when he got out of high school. The man explained "when the missus and I first got hitched we wooda used a truck to carry home $50 of groceries. Today I can carry $50 of groceries home with one arm"

Fuel is going to keep getting more expensive. So do something about it. What should you do? It is for you to figure out what is right for you. For me, I am helping people telecommute. If you could eliminate commuting just 1 day a week, that might cut your gas costs by 15 to 20%. Are you an employer? A salesperson? Do you have a weekly or monthly meeting that employees /suppliers /customers have to drive to? Are you sure they have to have a physical presence in that meeting room? Have you considered live video broadcasting to them? Have you considered video-commuting? Most people are quite shocked when I show them how simple and effective and inexpensive it can be. Then there is the whole field of virtual private networks so employees at home can access 'everything' at work just as if they were at their desk. (Obviously this would not apply to a machinist, welder, surgeon etc.)

Nearly every person I every talk to is doing some telecommuting every day and they don't realize it. When was the last time you went to the library? Why drive to the library when you can "look it up on the internet"?. That is an example of 'telecommuting'. How often do you go to the post office compared to 10 years ago? You are using email and video mail now for the price of a roll of stamps per month. In ten years how many blockbuster stores will there be in the USA? My guess is zero ! Have you noticed the new services that are offering movies by internet? How much gasoline are you saving by "telecommuting" the theatre to your home?

I can not affect the price of gasoline; however I can earn more money by anticipating how fuel prices are changing the world and helping people and businesses adapt. Let me help you.

Edited by Racer184, 26 April 2008 - 03:51 PM.


#28 Bubble2Bubble

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Posted 26 April 2008 - 05:58 PM

telecommute... here they call it conference calling.. Tomato... Tomoto.. I understand what your saying. I think that renewable energies is our future.(in short Weescot has made a great point) The day the Sun dosnt come up..we dont need to worry about our plant anyway. You are reading this thread because of electrity, You dont know if I'm posting this message from a wind powered permanent magnet alternator, coal burning generator or ???



But in my business some things have to be delivered by my truck :)

I want to get out of bed with the oil companies because there not playing nice :D



Bubski

Edited by Bubble2Bubble, 26 April 2008 - 06:30 PM.

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#29 BubbleBoy

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Posted 26 April 2008 - 06:06 PM

Here in Abu Dhabi, believe it or not, they are already investing serious research into alternative energy sources - something else they have plenty of - Mr Sun :birthday:

But the best perk of living here is not just the cheap fuel and the sun - it is the diving in Musandam, Oman. I saw a total of 8 stingrays today all in the same place, plus several others under some rocks. We were 4 very excited divers :) Incredible. The site is called Octopus rock, but we have renamed it stingray central :D Sorry, slightly off thread but too cool not to share.


I read somewhere that gasoline in Dubai is about 50 cents a gallon. Is that true? And great diving too? Lets all move there. That will teach them not to charge us high prices for oil. :birthday:

How about showing us some pics of those dive sites.
BB

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#30 netmage

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Posted 27 April 2008 - 04:13 PM

Unfortunately, the supply demand economics of the world oil markets have put OPEC back into a position of power and control. On the margin, it really boils down to what several of the big Middle East Oil Producers decide to export. Add to that the current speculation of big hedge funds in the futures market and you’ve got today’s mess.

Also unfortunate it that there is no easy supply-side fix that offers a total solution. The only way to get gas and oil prices down is for everyone to cut their physical demand.

Meet my new commuter vehicle to be delivered next month. Is it a car or a motorcycle? Who cares - it gets 70 mpg!


Find a way to stack a rebreather on it or a load of groceries, and I'll pick one up....!
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