Are the ultra high gas prices hurting you?



Powerful Pete

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FreeHueco said:
If all people want is cheap gas they should move to Venezuela. Then they could have all the gas they want to burn and be ruled by a madman...
Saudi Arabia is another good option in that regard...
 

jhuskey

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Powerful Pete said:
Saudi Arabia is another good option in that regard...


I am ruled by a woman who is mad at times now, besides not sure I would enjoy the cibo in SA .
 

limerickman

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Crankyfeet said:
One of the big issues here is the low US personal savings rate. The fact that many people in the US are financially geared and maxed out to such an extent that an extra $2,000 a year needed for gas is going to seriously cripple a lot of people. If you added $2000 a year of extra expenses to the average person living in Asia... it would mean their annual savings would go down like 20%.

American culture (IMHO... as a generalization) encourages consumerism and materialism and discourages savings. A lot of people here value getting the best house, car, etc. etc. that their means often can't afford. Consequently when their is an upward move in inflation or interest rates... it has a leveraged detrimental effect on a lot of people. There is no financial buffer in a lot of household budgets for any adverse swings in fortune.

The thing that really irritates me is when people blame oil companies for high gas prices and profiteering. Oil companies don't "set" the price of oil. The price of oil is set by global market forces and if anyone could influence it... it would be the OPEC cartel.

If oil companies could affect the price... they wouldn't have let it hang around $12-$25 a barrel for most of the late 80's and 90's.

Good points :

T Boone Pickens speaking on Bloomberg yesterday, said that 85 millions barrels per day are produced : 86.4 millions barrels are consumed per day.
Demand outstrips supplies = increase in prices.

As you correctly point out, increase in cost of living (petrol prices, food prices) coupled with the lack of money set aside to met these higher costs, does make for a perfect storm.

Are Americans any worse (better?) savers than other countries?
It would seem that nations like Britain have high levels of personal debt and little or no savings too.
 

Pendejo

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The increase in gas prices hasn't affected me one bit. Whenever I get gas I pump $15 worth.
 

jhuskey

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limerickman said:
Good points :

T Boone Pickens speaking on Bloomberg yesterday, said that 85 millions barrels per day are produced : 86.4 millions barrels are consumed per day.
Demand outstrips supplies = increase in prices.

As you correctly point out, increase in cost of living (petrol prices, food prices) coupled with the lack of money set aside to met these higher costs, does make for a perfect storm.

Are Americans any worse (better?) savers than other countries?
It would seem that nations like Britain have high levels of personal debt and little or no savings too.


As I have stated before "it's all Barbie"s fault. The Barbie Doll raised the bar for women and the expectation of men.
Before the Barbie Doll young ladies played with dolls that required a play bottle and diapers but since Barbie requirments have escalated to Ferraris, beach houses, designer clothes and Ken. Besides having a great body she has many beautiful friends and no flaws.
Not being able to live up to these high standards individuals become frustrated and spend beyond their means.
Even though Barbie is in theory, popular, note that all her friends must be purchased for her at additional cost. :D
 

TheDarkLord

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Pendejo said:
The increase in gas prices hasn't affected me one bit. Whenever I get gas I pump $15 worth.
Is the gas for a car or is it for something else? There was recently an article about how people were pumping only a little gas (as opposed to filling the tank) and getting to the point of running out of gas while driving. In addition to being dangerous, such people run the risk of damaging the fuel pump in which case any savings they get out of not pumping enough gas is wiped out completely.
 

Crankyfeet

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limerickman said:
Good points :

T Boone Pickens speaking on Bloomberg yesterday, said that 85 millions barrels per day are produced : 86.4 millions barrels are consumed per day.
Demand outstrips supplies = increase in prices.

As you correctly point out, increase in cost of living (petrol prices, food prices) coupled with the lack of money set aside to met these higher costs, does make for a perfect storm.

Are Americans any worse (better?) savers than other countries?
It would seem that nations like Britain have high levels of personal debt and little or no savings too.
A perfect storm in the US would be continued inflation in cost of living, rising interest rates... deflation in property, financial assets and employment... and continued stagflation in wages. That is already happened to an extent... but real property declines such as the ones the UK and Australia felt in the early nineties... haven't been felt yet across the board. The good news is that the fort has held... and we may have seen the worst.

Low savings rates are more of a western phenomena as you point out.
 

jrtalon

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alienator said:
Hearing Americans say "ultra high gas prices" is a laugh. It's about time the American "entitlement" to cheap gas ends.
Hmm strange you live in the U.S. right?

Your assesment that the U.S. has cheaper gas then other parts of the world such as Europe is ********, the Europeans are paying more because their gas is being taxes to hell not because they are being charged more for the oil then the U.S. is. In fact taking taxes out of the equations you can see the real picture.

This article is a few years old but it proves my point.
On August 8, for example, the price of gas in the US, without taxes, would be $2.17, instead of $2.56; in Britain, it would be $1.97, instead of $6.06.
http://www.csmonitor.com/2005/0826/p01s03-woeu.html

$4.09 is taxes!!
 

TheDarkLord

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jrtalon said:
Hmm strange you live in the U.S. right?

Your assesment that the U.S. has cheaper gas then other parts of the world such as Europe is ********, the Europeans are paying more because their gas is being taxes to hell not because they are being charged more for the oil then the U.S. is. In fact taking taxes out of the equations you can see the real picture.

This article is a few years old but it proves my point.
http://www.csmonitor.com/2005/0826/p01s03-woeu.html

$4.09 is taxes!!
So what is your point? It is the price that a customer pays at the pump that counts. At the time of paying, one normally doesn't care how much of what one pays is taxes.
 

alienator

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jrtalon said:
Hmm strange you live in the U.S. right?

Your assesment that the U.S. has cheaper gas then other parts of the world such as Europe is ********, the Europeans are paying more because their gas is being taxes to hell not because they are being charged more for the oil then the U.S. is. In fact taking taxes out of the equations you can see the real picture.

This article is a few years old but it proves my point.
http://www.csmonitor.com/2005/0826/p01s03-woeu.html

$4.09 is taxes!!

Well, guess what: you can't take taxes out of the picture. It is the price at the pump that affects the consumer's wallet. Living expenses don't go down by knowing how the cost of gasoline is distributed. So, your point is, well, pointless.
 

gemship

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jrtalon said:
Hmm strange you live in the U.S. right?

Your assesment that the U.S. has cheaper gas then other parts of the world such as Europe is ********, the Europeans are paying more because their gas is being taxes to hell not because they are being charged more for the oil then the U.S. is. In fact taking taxes out of the equations you can see the real picture.

This article is a few years old but it proves my point.
http://www.csmonitor.com/2005/0826/p01s03-woeu.html

$4.09 is taxes!!


That's about the best explanation as to why the cost at the pump is what it is. Yes of course that cost is what gets consumers concerned if not ****** but again this post indicates a good reason as to what makes the cost of gas what it is. There may be other factors to, who knows? Most likely not anyone here.

Anyways, nice post jrtalon. Makes sense to me even if it doesn't exactly address the OP's opening statement.
 

limerickman

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Todays Financial Times reports that Gazprom predict that oil will hit € 250.00
a barrel.

Yikes!
 

TheDarkLord

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limerickman said:
Todays Financial Times reports that Gazprom predict that oil will hit € 250.00
a barrel.

Yikes!
I don't think it is possible to justify that high a price purely based on demand and supply. I think a good part of the record high prices are due to speculation; it is possible that some speculators have a vested interest in making the price as high as possible. But as with any bubble, it will burst at some point. I'm not saying that oil will never hit 250 euros per barrel, but I think prices will crash at some point.
 

limerickman

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TheDarkLord said:
I don't think it is possible to justify that high a price purely based on demand and supply. I think a good part of the record high prices are due to speculation; it is possible that some speculators have a vested interest in making the price as high as possible. But as with any bubble, it will burst at some point. I'm not saying that oil will never hit 250 euros per barrel, but I think prices will crash at some point.

Interesting view.

Gazprom say that it is because demand is outstripping supply, that oil prices are increasing.
And it is Gazproms view that the tipping point for demand to drop is $250.00

I have read that speculators have been the driving force for stoking up the oil price as well.
if you look at commodity prices for food, metals - those prices have all exploded as well.
Gold especially has increased over the past 24 months.
It would not surprise me if there was some speculation causing these increases.
 

Bro Deal

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limerickman said:
Interesting view.

Gazprom say that it is because demand is outstripping supply, that oil prices are increasing.
And it is Gazproms view that the tipping point for demand to drop is $250.00

I have read that speculators have been the driving force for stoking up the oil price as well.
if you look at commodity prices for food, metals - those prices have all exploded as well.
Gold especially has increased over the past 24 months.
It would not surprise me if there was some speculation causing these increases.
George Soros says oil prices are in a bubble. Unfortunately Soros also said the bubble won't pop until the U.S. and Britain are in serious recession. I know that hedge funds and such that invest in commodities have seen huge inflows over the last few years, especially in the aftermath of the housing bubble.

Currently there is talk about regulation to limit speculation, but there would need to be a global deal.
 

Pendejo

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Our big "gas crisis" in the 70s, which was a very tough time, was later shown to be a completely fabricated situation by the oil companies. I have little doubt that something similar is going on now.
 

jhuskey

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Pendejo said:
Our big "gas crisis" in the 70s, which was a very tough time, was later shown to be a completely fabricated situation by the oil companies. I have little doubt that something similar is going on now.


Fool me once, shame on you!
Fool me twice, pull my hair and call me *****! :eek:
 

TheDarkLord

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Bro Deal said:
George Soros says oil prices are in a bubble. Unfortunately Soros also said the bubble won't pop until the U.S. and Britain are in serious recession. I know that hedge funds and such that invest in commodities have seen huge inflows over the last few years, especially in the aftermath of the housing bubble.

Currently there is talk about regulation to limit speculation, but there would need to be a global deal.
Yes, here is a recent article which came in CNN that raises similar points: http://money.cnn.com/2008/06/06/news/economy/tully_oil_bust.fortune/index.htm?postversion=2008060610
 

Powerful Pete

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The interesting thing is the inelasticity of demand, at least here in Italy. Everyone I know complains of high gas prices, but no one is driving less/using public or alternative modes of transportation. :confused:

Anecdotal evidence: I am in the market for a city bike to replace my second car, which I have just sold (also due to high gas prices, but I am weird and want to commute by bike). My LBS has confirmed that they are not seeing an increase in the sale of 'city/trekking/mtb' bikes at the moment.

So, I would agree that the price of oil will have to increase significantly beyond current levels of 130~140 USD per barrel before anyone considers changing habits. People everywhere have come to consider cheap gas as a God-given right, so that they continue to drive everywhere (even 500 meters to buy milk), another God-given right. The complaints in Europe are anti-Government - everyone is demanding a decline in taxes on fuel, although no one has proposed an alternative revenue stream for cash-strapped public coffers...
 

Crankyfeet

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Excellent point PP. Even at current prices for gas... worldwide demand/consumption has hardly moved. It is hard to replace the automobile... no matter what the cost of travel.

Unfortunately there are not easy fuel alternatives due to the infrastructure that has been built up around oil.