What is driving the price of gas down? Election?

[Zguy28]

What effect will this have on it? http://www.msnbc.msn.com/id/14678206/

[Zguy28]

I subscribe to this theory:

The oil companies are gouging us because they can. Pure and simple. They do not need to actively collude. There are so few of them, and the disincentives to actually competing on price are so high, that all they have to do is act in their own rational self interest and keep prices high, and they all make out like bandits. There is no incentive to do otherwise, and there is no alternate available to us under this market structure.

Aren't they called Robber Baron's?

[Midnight Judges]

What effect will this have on it? http://www.msnbc.msn.com/id/14678206/

It will take many years and tens of billions of dollars to bring the oil to market, but the discovery carries particular importance for the entire industry at a time when Western oil and gas companies are finding fewer opportunities in politically unstable parts of the world, including the Middle East, Africa and Russia.

In other words, jack freakin' squat.

[cyfar]

I think we all need to thank little BABY JESUS!!

I still haven't seen that movie yet. I've heard that referenced everywhere thou. That can't get to DVD soon enough. I may actually have to check it out at a theatre.

[jbooma]

I know everyone is saying "there are a bunch of reasons", but can someone show me quantifably as to why the prices dropped?

Chom I can say to your can you show me proof that the house is behind this?? Guess what you can not also However I will say all these specific reasons sound more logical then just blaming the government

For the house to agree to do this then many members would have to be aware of what they are doing and someone would slip and this would be out in the news. This is not something one person could manager it would have to be a large group.

I would also say if Dems knew some Repubs were doing this don't you think they would rat them out to get more seats??

[alexey]

sorry about the superhuge pic

[Predicto]

Aren't they called Robber Baron's?

Funny you should say that.

Robber Barons is a term that came to use in an earlier era where free market principles also failed due to excessive market concentration, particularly in the railroad, oil, steel and banking industries.

I think the present oil situation is very similar.

[Masterman]

The crude prices began its decline Friday after the United Nations failed to impose sanctions on Iran for refusing to stop its nuclear enrichment program, ending speculation of a squeeze that was already factoring into pricing. Also easing energy prices were strong inventory data, a promising forecast for this year's hurricane season (meaning, less storms) and a mixed U.S. jobs report --> suggesting fuel demand probably won't surge sharply during the long weekend we just had.

/answering work questions on a holiday.

Edit: The political angle probably didnt hurt either, but its hard to quanitfy. :2cents:

This is an extremely educated view of the gasoline market. It is also caused by other domestic finds in the Gulf of Mexico, less storms in the gulf than the Global Warming advocates predicted, etc. Of course, George Bush is responsible for controlling the weather this year for the election and last year to increase gas prices.

[JohnLockesGhost]

Funny you should say that.

Robber Barons is a term that came to use in an earlier era where free market principles also failed due to excessive market concentration, particularly in the railroad, oil, steel and banking industries.

I think the present oil situation is very similar.

Oy! The Robber Barons? Are you serious? Your so-called robber barons were the industrial giants who built this country into the single greatest economy in the world. These are great men who should be celebrated, not vilified.

Of course, there were highly connected "political" businessmen, who used their influence to gain access to government coffers, but on the whole the entire "robber baron" stuff is nonsense. This whole myth around these men arose during the Great Depression, not during their time.

[Midnight Judges]

This is an extremely educated view of the gasoline market. It is also caused by other domestic finds in the Gulf of Mexico, less storms in the gulf than the Global Warming advocates predicted, etc. Of course, George Bush is responsible for controlling the weather this year for the election and last year to increase gas prices.

I hear ya man and George W. Bush is an awesome President but the liberal media, a.k.a. "the man" is keepin' him down!

[alexey]

Is there a discrepancy between crude oil prices and prices at the pump? In other words, have prices at the pump fallen lower than one would expect given the oil market? Anybody?

http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

[Masterman]

I hear ya man and George W. Bush is an awesome President but the liberal media, a.k.a. "the man" is keepin' him down!

A man or morale turpitude can't be put down by "the man!":silly:

[Predicto]

Oy! The Robber Barons? Are you serious? Your so-called robber barons were the industrial giants who built this country into the single greatest economy in the world. These are great men who should be celebrated, not vilified.

Of course, there were highly connected "political" businessmen, who used their influence to gain access to government coffers, but on the whole the entire "robber baron" stuff is nonsense. This whole myth around these men arose during the Great Depression, not during their time.

Thank you Ayn Rand.

Thorsten Veblen would like to have a little chat with you.

[JohnLockesGhost]

Thank you Ayn Rand.

Thorsten Veblen would like to have a little chat with you.

I'm sure he's not available.

[MikeInJc aka M.I.A.]

Doesnt oil usually go down towards the end of summer? Cant remember last summer, way too long ago

Gas prices did not go down at the end of summer thanks to mother nature wrath (Katrina), which hit in late August and shut most of the refineries in the Gulf down (actually destroyed not shut down). You also have to take in account that some of those refineries have recently become opperational or nearly opperational. Just my :2cents:

[twa]

Gas prices did not go down at the end of summer thanks to mother nature wrath (Katrina), which hit in late August and shut most of the refineries in the Gulf down (actually destroyed not shut down). You also have to take in account that some of those refineries have recently become opperational or nearly opperational. Just my :2cents:

Common sense is not allowed...ban him

[BayouBrave86]

Thank you Ayn Rand.

Thorsten Veblen would like to have a little chat with you.

:laugh: Great thread with some well-thought out points. Keep those gas prices falling.

[dreamingwolf]

what I love is if the gas prices go up its a Republican conspiracy, if they go down its the same? I guess if its a set price and there are massive lines, thats the only time dems are happy.

[JohnLockesGhost]

what I love is if the gas prices go up its a Republican conspiracy, if they go down its the same? I guess if its a set price and there are massive lines, thats the only time dems are happy.

You do bring up an interesting question: what are the alternatives?

Price controls? Produce disincentives to supply more oil along with disincentives to conserve, leading to gasoline shortages and queues.

Expropriation? Government run enterprises all over the world are some of the worst-run organizations on the planet. Efficiency will decline and supply with it. So, we'd be worse off.

Windfall profits tax? Wouldn't affect the price at the pump. Profits over a certain threshold would be taxed at a much higher rate, producing incentives for oil companies to not generate these profits. It would discourage further exploration, which is exactly what is needed to drive prices down. This strategy was tried before and failed exactly as predicted.

Did I forget any?

[alexey]

You do bring up an interesting question: what are the alternatives?

Research :2cents:

[JohnLockesGhost]

Research :2cents:

I was being rhetorical. I know, sometimes that's difficult to realize on message boards.

[JetSkins]

it will probably balloon back up

[chomerics]

You do bring up an interesting question: what are the alternatives?

I would have an investegation and place the oil execs under oath for a start. Why was the investegation turned into a farce by the people in power?

I find it really strange that the right leaning people always scream about the democrats pandering to special intrest groups, yet when the same point is brought up when Republicans do it, it is ignored, laughed off and basically they claim it isn't happening. . . even when all the cursory evidence available points towards the opposit conclusion.

Price controls? Produce disincentives to supply more oil along with disincentives to conserve, leading to gasoline shortages and queues.

Really? According to macro theory, but as it has been mentioned before in this thread that oil is not a commodity which obeys basic supply and demand economics. it is a necessity for daily living, one which you HAVE to get from one of five or so companies. There will ALWAYS be a demand for the product no matter what they charge. They could charge $10/gallon and people would still buy it because they need it to live.

Expropriation? Government run enterprises all over the world are some of the worst-run organizations on the planet. Efficiency will decline and supply with it. So, we'd be worse off.

Agreed

Windfall profits tax? Wouldn't affect the price at the pump. Profits over a certain threshold would be taxed at a much higher rate, producing incentives for oil companies to not generate these profits. It would discourage further exploration, which is exactly what is needed to drive prices down. This strategy was tried before and failed exactly as predicted.

Really? Do you agree with the $50billion tax cut the oil companies were given then? What was the purpose of that tax cut? To stimulate what? The fatness of their CEO's wallet?

Seriously, at what point do you say enough is enough. The oil companies can charge what ever they can get away with, and at $3 a gallon, it was about the threshold of the American consumer. It was when Congress started to hold the cursory fake hearings with the execs. Again, oil is not a commodity which is driven by supply and demand economics, so you can throw all the rest out the book.

If you were a company, and you could make $5billion profit tax free, and then make an additional $3billion on the next $4billion profit, would you just quit at $5billion and not make the extra $3billion? No, you would still make as much as you could. you would not work up to the threshold of the tax, and then cease operations. You would instead still try to make as much money as you could. Just because you have a progressive tax, it does not make the incentive any less, especially in a commodity such as oil. If that were the case, Americans would cap earnings at $90K so they don;t have to pay into the higher bracket, which we all know is not correct.

People and companies will ALWAYS try to make the most money possible. You said that they would not explore, but what if exploration was a means of reducing the windfall tax? What if alternative energy research was a means of reducing the tax? There are ways around everything, and you can still leave the future incentives as a carrot for companies, while taxing outrageous profits.

Did I forget any?

No Ann, you did not.

[JohnLockesGhost]

I would have an investegation and place the oil execs under oath for a start. Why was the investegation turned into a farce by the people in power?

I find it really strange that the right leaning people always scream about the democrats pandering to special intrest groups, yet when the same point is brought up when Republicans do it, it is ignored, laughed off and basically they claim it isn't happening. . . even when all the cursory evidence available points towards the opposit conclusion.

For the record, I'm certainly against any tax breaks oil companies get, but this is beside the issue of the price of gasoline.

Really? According to macro theory, but as it has been mentioned before in this thread that oil is not a commodity which obeys basic supply and demand economics. it is a necessity for daily living, one which you HAVE to get from one of five or so companies. There will ALWAYS be a demand for the product no matter what they charge. They could charge $10/gallon and people would still buy it because they need it to live.

It isn't really a question of theory. Price controls were used under the Nixon and Carter administration during the 1970's and led to gas shortages and lines. The misconception is that the embargo led to the shortages, but this isn't true. Shortages (and surpluses for that matter) are a function of price, not supply. If the price was allowed to rise to the appropriate level, there wouldn't have been lines.

Really? Do you agree with the $50billion tax cut the oil companies were given then? What was the purpose of that tax cut? To stimulate what? The fatness of their CEO's wallet?

Seriously, at what point do you say enough is enough. The oil companies can charge what ever they can get away with, and at $3 a gallon, it was about the threshold of the American consumer. It was when Congress started to hold the cursory fake hearings with the execs. Again, oil is not a commodity which is driven by supply and demand economics, so you can throw all the rest out the book.

If you were a company, and you could make $5billion profit tax free, and then make an additional $3billion on the next $4billion profit, would you just quit at $5billion and not make the extra $3billion? No, you would still make as much as you could. you would not work up to the threshold of the tax, and then cease operations. You would instead still try to make as much money as you could. Just because you have a progressive tax, it does not make the incentive any less, especially in a commodity such as oil. If that were the case, Americans would cap earnings at $90K so they don;t have to pay into the higher bracket, which we all know is not correct.

People and companies will ALWAYS try to make the most money possible. You said that they would not explore, but what if exploration was a means of reducing the windfall tax? What if alternative energy research was a means of reducing the tax? There are ways around everything, and you can still leave the future incentives as a carrot for companies, while taxing outrageous profits.

By the admission of its advocates, a windfall profits tax wouldn't lower the price at the pump. Again, we have historical evidence of this. Its only real function is to communicate the displeasure of the populace with the oil companies and serve as a means of revenge. I don't do revenge myself, because I don't blame oil companies for high prices. Prices happen. Like gravity.

No Ann, you did not.

Thanks, Karl. (See how easy it is to name call?)

[Predicto]

No Ann, you did not.

Did you mean Ann or Ayn?

Not that either is a compliment. :laugh:

ps - I only called you Ayn Rand because your "captains of industry" post was straight out of the Objectivist playbook. Don't mean to insult.