With Crude at $145...

[Ductape]

Originally Posted by MarkLeininger

My friend travels all over the world for work, says gas has been $9-10/gallon in Europe and other countries for a long time. He says we have cheap gas at $5/gallon. Doesn't feel cheap to me, but fortunately I ride my bicycle to work and the wife works out of the house. That leaves plenty of money to buy important things like fuel for the tractor, new attachments, more tools to work on the new attachments, and larger buildings to store all of the above.

With all due respect, it drives me nuts when people compare the price here with Europe and say how good we have it. The price of the petroleum is comparable......... the reason its twice as much is the TAX they pay on it. Its just that ours isn't taxed anywhere near as much........ YET.

[RollingsFarms]

Originally Posted by bob_wood

and how the fuel prices are helping to drive up the price of Everything else is whats scaring Me ! Food, building materials, etc etc

higher building materials means lumber sitting at the mills not being sold which means I'm not selling any hardwood to the mills which is REALLY hurting me, the mills, the construction workers, etc., etc.

[unreconstructed]

The world's oil reserves I understand is owned around 70 percent by governments. Say what you want about the evil oil companies, but there are truly noncompetitive factors involved in the price of oil. Also, Ductape is correct about the tax on gasoline. You can't compare Europe to the U.S. The European model is what our political class prefers-using oil becomes a source of another sin tax no different than smokes and booze.

[shownuff]

Stop Oil Speculation Now | S.O.S. NOW

[tlbuser]

Originally Posted by Ductape

With all due respect, it drives me nuts when people compare the price here with Europe and say how good we have it. The price of the petroleum is comparable......... the reason its twice as much is the TAX they pay on it. Its just that ours isn't taxed anywhere near as much........ YET.

Agreed.. Try comparing to the OPEC nations or Venezuela instead. My forefathers left Europe because they didn't like the way things were done there, yet all these years later everyone still wants to compare us to them

[ihookem]

I'm suprised gas isn't higher the way the government acts. Think of it like this, if you had a neighbor that had more time than you but never wanted to work around the house so got you to do it. So you charge him a high price of 30 bucks an hour and keeps giving you more and more work to the point you have no time for yourself. Then you start charging 50 bucks an hour but he still keeps you to do more and more work while he sits and watches football while your favorite team is on too. So you charge 75 an hr. and he goes on an Alaska grizzly hunt but before he leaves he gives you a list too tall for you do and only wants you and noone else on his land. What would you do? You are obviously still cheap right? Oh by the way his three strapping boys are too buisy lifting weights and studying for college and won't be helping. Ok, 100 bucks an hour! He sais WHAT?, that's too much. OK do it yourself and he agrees after he gets back the price may be 143 an hr and I have enough money now (like OPEC) that if he doesn't like it he can do it himself. This is the way Americans act when it comes to oil. We don't want to drill our own, we don't want nuclear, coal, wind power, natural gas, or small cars. We have people that continue to reelect incumbents even when congress has a 9% approval rating that refuse to let "big oil " drill for fear they will make a fraction of what government makes of a gallon of gas. So here we are still driving way to fast, way to much, way too big of trucks most don't need, huge engines on boats, flying all over like it's mass transportation on long weekends and we complain. We could cut energy use by 25% starting tomorrow if we wanted but we won't cause the average american can afford it or they will spend their last dollar for a gallon of gas, even for recreation. Some will say this won't make oil go down cause Opec will sell it to China. Not really, ten years ago, we used 80% of the worlds energy. Today we still use 70%. Take a company that looses 25% of sales that makes up 75% of their buisness and theywill be hurting fast. They say it's because our green back has lost it's value, ok, americans seem to still like our green back enough to get up every morning for more, lets drill our own oil, make diesel out of coal, use more electric cars, give good paying oil and mining jobs to the few hard working Americans we have left and I bet money Opec will see our dollar has a little more worth than they think. But we are still the neighbor who pays big bucks to get their yard work done cause we refuse to do it ourselves.

[RichNJKubota]

So a speculator buys a contract for oil. How does that raise the price of oil? They must take delivery of the oil or sell the contract? Do they physically store millions of barrels of oil?
Either I don't understand how a speculator can increase the price of oil or it's a bunch of baloney.

[Charlesaf3]

Originally Posted by RichNJKubota

So a speculator buys a contract for oil. How does that raise the price of oil? They must take delivery of the oil or sell the contract? Do they physically store millions of barrels of oil?
Either I don't understand how a speculator can increase the price of oil or it's a bunch of baloney.

Speculators get blamed for a lot they aren't to blame for. Yes, they affect the price up a bit, but not nearly as much as everyone thinks.

Oil companies don't make the price. They actually aren't even earning that much money. What matters to them is not absolute price but price delta - they'd rather sell a lot of cheap gas profitably.

The Arabs are making a fortune.

And who's to blame? US!!! We use too much oil. That drives the price up. Simple as that. No need to look for fancy conspiracy theories, most of us can look in our driveway - I've got 2 SUVs, a pickup, and 2 kubotas out there. I can look in the mirror if I want someone to blame.

Truth is, and people don't like to hear this, high oil prices, to a point, are good for this country. We need to spend $4-$5 a gallon for gas. Its the only thing that will move us off oil, which is where we really need to go. We need Nukes, and wind, and electric cars and pickups. Not sending huge amounts of cash to a part of the world that doesn't seem to like us much.

Talking conservation does nothing. $5 gas leads to conservation.

Admittedly, taking our medicine really hurts in the meantime.

[Diamondpilot]

I have a good friend that owns a gas/service/convenient store station. He says his sales are only off 2% this summer. The truth is we are willing to pay $4 a gallon or more for the convenience of our own transportation. If not, take the bus or train. I am not willing to do that so I will pay.

From what I have read the average barrel of oil changes hands via speculators about 6 times. Yes, this is all on paper but it drives the price up. About $30-$40 per barrel. We can not point the blame at them only, there are more pieces to the puzzle.

Chris

[unreconstructed]

there was a pretty interesting column on Lewrockwell.com yesterday by a guy named Michael Rozeff about speculators and the effect of governments trying to outlaw them. If you are interested you can go to columnists on Lew's site and look him up. the article is called Planes of Prey. If you are a Keynesian type, this will not be of interest to you.

If the market is allowed to work, there will be a solution as someone will figure out out to make a buck and will want to get whatever that solution might be to market.. It won't be pretty as we take our medicine as another poster pointed out. If we get our Congressmen involved and the cure is attempted through subsidies, grants, tax credits and the like, the problem will go on as long as the public teat can be milked.