George W. Bush is a
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From: Lafayette, LA
Originally Posted by WestSideBilly,Nov 3 2004, 05:47 PM
This is why I said "I should probably qualify that last statement, but I doubt anyone who disagrees would be able to grasp the logic."
I know you're trying to joke, but the entire equation of gas/oil prices is not supply & demand. Yes, supply is down from the hurricanes (I believe the Gulf is running at just under 90% now, though it's been slow to come back up); and demand is up from China (primarily). But there are other factors that outweigh these:
1) Nature of the trade. Oil is traded on commodities markets. These are people buying "paper oil" trying to make money off them. Thus, like the stock market, reactions often defy logic, and prices go up sometimes regardless of circumstances.
2) Fear factor. If those traders think supplies may be damaged (as they were in Iraq after the US invasion) that drives prices up even if the supply isn't actually affected. The fear factor also shows up in Nigeria and other producers who have very instable situations. The "fear factor" is often 10% or more of the current price of crude - and it's going to be higher with a "war president" in office. The commodities traders fear terrorist attacks on supplies, invasions of oil producing countries (even if long term it allows for increased supplies), etc. This is where W comes in.
3) Refinery capacity limitations. The blame for this is widespread, but our refineries simply can't do any more. Most are running at 100% and often delaying required maintenence until transitions. Not a good way to run a commodity production industry. This all ties back to oil because when gas (or any other oil byproduct) prices rise due to limitations in refining, crude often goes up with it.
4) X factors. Shipping limitations, strikes, etc. Lot of these floating around, and when supply capacity is running around 98% and refinery capacity in the US is running around 99%, it doesn't take much to trigger price increases.
Then again, you already knew all that.
I know you're trying to joke, but the entire equation of gas/oil prices is not supply & demand. Yes, supply is down from the hurricanes (I believe the Gulf is running at just under 90% now, though it's been slow to come back up); and demand is up from China (primarily). But there are other factors that outweigh these:
1) Nature of the trade. Oil is traded on commodities markets. These are people buying "paper oil" trying to make money off them. Thus, like the stock market, reactions often defy logic, and prices go up sometimes regardless of circumstances.
2) Fear factor. If those traders think supplies may be damaged (as they were in Iraq after the US invasion) that drives prices up even if the supply isn't actually affected. The fear factor also shows up in Nigeria and other producers who have very instable situations. The "fear factor" is often 10% or more of the current price of crude - and it's going to be higher with a "war president" in office. The commodities traders fear terrorist attacks on supplies, invasions of oil producing countries (even if long term it allows for increased supplies), etc. This is where W comes in.
3) Refinery capacity limitations. The blame for this is widespread, but our refineries simply can't do any more. Most are running at 100% and often delaying required maintenence until transitions. Not a good way to run a commodity production industry. This all ties back to oil because when gas (or any other oil byproduct) prices rise due to limitations in refining, crude often goes up with it.
4) X factors. Shipping limitations, strikes, etc. Lot of these floating around, and when supply capacity is running around 98% and refinery capacity in the US is running around 99%, it doesn't take much to trigger price increases.
Then again, you already knew all that.
Joined: May 2001
Posts: 93,305
Likes: 820
From: Nowhere
I found out why diesel hasn't stayed with regular gasoline (which has stabilized for the last few weeks). Apparently diesel is from the same crude layer as heating oil, which has been driven up in the commodities market on fears of a cold winter and short supply (both fear factors at this point). Heating oil goes up, so does diesel. Sucks for our customers - tough to make money when 29 cents per mile goes to putting fuel in the truck, and you only get paid 35 cents per mile.
Joined: Jun 2002
Posts: 42,315
Likes: 45
From: Central Massachusetts
BTW, my answer to the question posed by this thread is "George W. Bush is a... President of the United States, much to my chagrin."
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
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Joined: Aug 2004
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From: Newtown,PA
Originally Posted by Chazmo,Nov 4 2004, 07:08 AM
BTW, my answer to the question posed by this thread is "George W. Bush is a... President of the United States, much to my chagrin."
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
Joined: Jun 2001
Posts: 88,444
Likes: 21
From: Pt. A to Pt. B via VTEC!!
Originally Posted by Chazmo,Nov 4 2004, 10:08 AM
BTW, my answer to the question posed by this thread is "George W. Bush is a... President of the United States, much to my chagrin."
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
(just in case anyone actually remembered the topic)
(not that I expect anyone really cares)
now we need topics in here! 
