Re: {OT} Gas here is now 2.39 here at the pump

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Crude is around 67.40 hit 68 earlier.


$2.77 on the signs by my house ...






2.79 to 2.82 up here in the Burbs of Chicago, which currently has
the highest gas prices in the nation. Thanks, Nobama.

Charles Grozny



Hey moron. Explain how Obama has jacked up the price of gas.



NEWSFLASH
Obama's entire strategy is to run up the price of gas so people will
buy the new Crapmobile that GM is going to build as soon as Obama
can pack the board of directors.


The fact is, TODAY, demand is down and supplies are up, yet the
price at the pump is rising. This is completely at odds with the
main tenent of Supply & Demand.


Can you think of any other factors which would jack up the price when
the supply & demand situation isn't making sense?


In a free market economy, there are no other factors.

In a manipulated market economy, there are lots of other factors.
Which factors are you thinking of?


The factor that everyone pretends doesn't exist: Speculation purely
for the sake of speculation, done by people and entities which are
completely unrelated to any aspect of the oil business.

Remember? It was in the news just last year.


In a supply and demand model, there is no speculation. There is Supply
and there is Demand.

Supplies go down or demand goes up, and the prices increase.

Supplies go up (as we have today) or demand goes down (also a condition
we have today) then prices drop. We have two of two possible conditions
favorable to falling prices in a Supply & Demand marketplace, yet the
prices are rising.

Speculation manipulates the market conditions outside of the Supply &
Demand model, at which point we have rising prices, and rising supplies
with declining demand.

And, without regard to any of that, the demand today is the same as the
demand yesterday, yet the prices rose overnight. Demand today may be
higher or lower than demand last year, and that justifies pricing
differentials between then and now. But, as we already know, the prices
last year were manipulated by outside forces and did not reflect Supply
& Demand models. Hmmm, seems we are violating the models again this
year. Hmmm ...


Up to this point in your message, you have described the speculative
effect on oil prices, and why they are sometimes totally disconnected
with supply & demand, as they were last year when gas was absurdly
expensive.

But the problem with using the word "demand" is that there is a certain
floor below which demand cannot decrease.



Well, to an idiot, maybe. But to everybody else, I've described a pure
Supply & Demand market where there is no speculation. Bring speculation
into the marketplace, and it ceases to be a Supply & Demand market.

Whyu does it matter where the floor of Demand is? That only describes
where the price bottom would be, but we are not in a falling market, we're
in a rising market EVEN THOUGH demand is falling AND supply is rising.

There are tankers moored in the harbor because there is no place to
offload the crude to, and the refineries have full tanks so there is no
capacity to refine because there's no place to store the gas. There is no
rational reason in a Supply & Demand Market for prices to be rising right
now. There may be good Supply & Demand reasons for prices to not fall any
further, that would be the case if the floor of Demand was being hit.


I think you're agreeing with me, except for one thing: There's a theory
which says we can easily and voluntarily decrease our demand on a short term
basis. Example: Choosing to drive less. To an extent, that's true, but let's
say you live where you want to live and you drive the most efficient vehicle
imaginable. You still have to get to work, and carpooling is not always an
option, nor is mass transit in many places. So, you've already adjusted as
much as you can.


.

Relevant Pages

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  • Re: {OT} Gas here is now 2.39 here at the pump
    ... Explain how Obama has jacked up the price of gas. ... The fact is, TODAY, demand is down and supplies are up, yet the price ... In a manipulated market economy, there are lots of other factors. ... Supplies go down or demand goes up, and the prices increase. ...
    (alt.autos.toyota)
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