Let's Talk Gas Prices $

[BillyP]

To start off, let's leave politics out of it. Politics plays a role in it but it goes far beyond that.

I know I'm opening a can of worms with this but I feel there's something to be learned! There's some members here that are in the "know"?

What I think is the price goes up because they can. That and the Futures Market but mostly speculation.

For example... Some dudes get together and speculate that for this summer that supply may not meet demand, hurricane predictions and so on.

What's the real story? Are they making extra money off of us because so and so said such and such?

 

[KAB]

Here is an article that sumerizes what I have been hearing lately.
http://www.nytimes.com/2007/05/20/business/yourmoney/20view.html?ref=yourmoney

Kurt

 

[mjarrels]

Diesel is now 30 cents less then 87 unleaded!

mark

 

[LMTC]

What I think is the price goes up because they can.

How far have you thought that out? Almost any business CAN raise the price of their product(s). Because they can....c'mon, that's just very simplistic.

Then why do they (and I don't know who "they" refers to) stop at $3.00---or $3.29---or whatever? Why not $45.00? Isn't a free market economy about getting whatever price the market will bear? When supply exceeds demand the price will drop.

And I love how you say leave politics out of it and IMMEDIATELY make a political statement; what's up with that? Some folks DON'T think the price has to do with politics.

 

[Kendall69]

Have you seen what fuel prices has done to food prices. I went to the store this week and, man the prices of some of the items we looked at.

Farmers are growing more corn because of ethanol, which means less wheat, less wheat, then wheat cost more to feed cows, cows give beef and milk, butter cheese so price on those go up. Wheat production down bread prices go up etc.

 

[LMTC]

Have you seen what fuel prices has done to food prices. I went to the store this week and, man the prices of some of the items we looked at.

Farmers are growing more corn because of ethanol, which means less wheat, less wheat, then wheat cost more to feed cows, cows give beef and milk, butter cheese so price on those go up. Wheat production down bread prices go up etc.

The demand for ethanol has raised primarily corn prices, and thus has affected, and will continue to affect, meat and poultry prices. I have never seen nor heard of a beef feedlot or dairy farm where the primary feed for the cattle was made from wheat.

Just remember....this is what the environmental movements have asked for. I tend to think the long term consequences were not all well thought out.

 

[shaley]

Have you seen what fuel prices has done to food prices. I went to the store this week and, man the prices of some of the items we looked at.

Farmers are growing more corn because of ethanol, which means less wheat, less wheat, then wheat cost more to feed cows, cows give beef and milk, butter cheese so price on those go up. Wheat production down bread prices go up etc.

You ain't seen nothing yet.
The last hundred years was a one time growth spurt unrivaled in human history. It was fueled for the most part by cheap oil. Oil that ran machines and factories that propelled America into an industrial leader. Oil so cheap that for every gallon burned to pump and deliver as much as 200 gallons were returned. All this because we happen to stumble on deposits that took millions of years to form. Take a look a peak oil theory. Anyway, ethanol will only return about 2 gallons for every gallon spent to make it. It's going to take a lot of corn and a lot of effort to fuel America.
Wheat, Just wait until China hits their industrial peak. They will be buying all the wheat American farmers can produce.

 

[BillyP]

How far have you thought that out? Almost any business CAN raise the price of their product(s). Because they can....c'mon, that's just very simplistic.

Then why do they (and I don't know who "they" refers to) stop at $3.00---or $3.29---or whatever? Why not $45.00? Isn't a free market economy about getting whatever price the market will bear? When supply exceeds demand the price will drop.

And I love how you say leave politics out of it and IMMEDIATELY make a political statement; what's up with that? Some folks DON'T think the price has to do with politics.

Well slap myself silly. I should have thought out my question more thoroughly. Now that I read your reply I feel so much more educated. Thank you for your well thought out reply

 

[BillyP]

Here is an article that sumerizes what I have been hearing lately.
http://www.nytimes.com/2007/05/20/business/yourmoney/20view.html?ref=yourmoney

Kurt

Thanks Kurt. That's a pretty good read.

 

[randy41]

corn is a traded commodity therefore the price is in the hands of speculators.
if i were trying to sell oil for a high price it would be in my best interest to see that the price of corn was high.