tag:blogger.com,1999:blog-7284169336072184992.post6564834819960799686..comments2023-06-22T09:33:32.324-04:00Comments on SENSE AND NONSENSE: Oil Prices: Supply and Demand? Some Questions!Neil Bensonhttp://www.blogger.com/profile/18269735762990766138noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7284169336072184992.post-38746883823190177822008-08-25T17:58:00.000-04:002008-08-25T17:58:00.000-04:00Sorry dude. Supply and demand rule.If you and I pr...Sorry dude. Supply and demand rule.<BR/><BR/>If you and I privately agreed to wager on whether oil prices would be up or down in the next week, it would have no effect on the spot price of oil whatsoever. Neither do futures contracts. <BR/><BR/>Only if one can buy and store oil can it affect the spot price. As price rises, your incentive to sell increases because a competitive market will quickly guess the right price.<BR/><BR/>Oil prices dropped because consumption was down. Industrial production in China and India dropped in April. This was the first year in 30 years that vehicle-miles-traveled in the US dropped. But cars aren't the big consumer here - trucks, trains, and planes are, and they had massive cuts.<BR/><BR/>Dana is wrong too. Prices of individual inputs are not perfectly correlated to the price of outputs. The high prices of ethanol and a petroleum based additive for summer blends kept prices relatively high.<BR/><BR/>There is no such thing as price gouging in a competitive market and there is no evidence of collusion.<BR/><BR/>If you want to know why gasoline prices are so high, it's because of high oil demand by China and India, lack of refining capacity in the US, environmental regulations, and TAXES. State and federal revenues from gas taxes dwarf oil company profits.<BR/><BR/>The guilty party is having party in Denver right now. Take your argument there.Hot Samhttps://www.blogger.com/profile/10848778804406692799noreply@blogger.comtag:blogger.com,1999:blog-7284169336072184992.post-35374748050647911212008-07-23T10:33:00.000-04:002008-07-23T10:33:00.000-04:00What I find most disturbing is that when oil price...What I find most disturbing is that when oil prices increase $5/barrel, we see a $0.05/gallon jump in fuel prices, but since oil prices have decreased $20/barrel, I've only seen fuel prices decrease by $0.10/gallon. Hmmmm ....Danahttps://www.blogger.com/profile/05427053242655177097noreply@blogger.com