If gas reaches $5.00/gal are you done?

[melvonnar]

Originally Posted by DonavonP

wthomas, clockwise or counterclockwise on that dead chicken?

either way works-----but remember, the faster you go the better it works

[Gary - K7GLD]

So a lot of folks think that speculators are what is driving up the price of oil. I'd love to know how.

WELL, here's a "PERHAPS" for you:

Let's say YOU invent, then produce and market a wonderful device called a Widget - so wonderful that virtually EVERYONE wants and needs one. You decide to sell them to wholesalers for $1 each - and can barely make them fast enough, demand is so great - with NO END in sight of willing and eager buyers.

BUT, me and several of my friends approach you, and offer you $1.50 each for ALL the Widgets you can make, and YOU must do all the shipping to addresses WE will steadily supply you with - you have the patent, and are the ONLY available supplier.

WELL, since $1.50 each is better than $1, you quickly agree!

Me and my buddies immediately take this steady flow of Widgets, and mark them up to $2 each - we simply take the orders from retailers, pass their addresses on to YOU for actual delivery to the customers, and WE make 50 cents on every one sold - and never touch, handle or even SEE a SINGLE Widget!

Crude as it is, there's a pretty good example of the "how"...

[jimbo16720]

That's the last news station I would trust. You can see that the price of oil is going up with the stock market. Plus they always raise the price around holidays. My question is why it doesn't go down after winter since they don't have to do the extra work for the summer gas?

[wnytaxman]

Originally Posted by Gary - K7GLD

WELL, here's a "PERHAPS" for you:

Let's say YOU invent, then produce and market a wonderful device called a Widget - so wonderful that virtually EVERYONE wants and needs one. You decide to sell them to wholesalers for $1 each - and can barely make them fast enough, demand is so great - with NO END in sight of willing and eager buyers.

BUT, me and several of my friends approach you, and offer you $1.50 each for ALL the Widgets you can make, and YOU must do all the shipping to addresses WE will steadily supply you with - you have the patent, and are the ONLY available supplier.

WELL, since $1.50 each is better than $1, you quickly agree!

Me and my buddies immediately take this steady flow of Widgets, and mark them up to $2 each - we simply take the orders from retailers, pass their addresses on to YOU for actual delivery to the customers, and WE make 50 cents on every one sold - and never touch, handle or even SEE a SINGLE Widget!

Crude as it is, there's a pretty good example of the "how"...

I would agree with your example if there was only one company that sold oil in the world. That simply is not the case. Let me try another example to see if it better exemplifies the speculator. I had a client who bought wheat futures based on a prediction of Nostradomus (spelling?) that there would be a drought along what was interpretted as the 49th parallel. He lost a ton of dough on that one. The speculator is basing his investment or gamble on events having an effect on prices. War in the Middle East, Somali pirates, or other factors coming into play is what the speculator is gambling on. Will there gamble have an actual effect on what you pay at the pump? The only possible way is someone to corner the entire market on oil. That just isn't possible.

As for the conspiracy people who think the oil companies all get together and set the price. That is also one monster fallacy. If that were the case we would all be paying over $10 a gallon. The huge profits that an oil company will have comes about from wells that were deemed to be profitable enough to be drilled when oil was $35 a barrel that are still producing when oil is $100 a barrel. We can try to blame everyone else we want to, but the bottom line is we have done this to ourselves.

[a k]

The airlines are still paying under a $1/gal for jet fuel(Diesel) How come?

[scenic route]

Originally Posted by a k

The airlines are still paying under a $1/gal for jet fuel(Diesel) How come?

According to the Air Transport Association: The average price paid for fuel rose 10.6%, from $1.92 to $2.13 per gallon, ATA said.

Also, this: The price of jet fuel reached its highest point in more than a year-and-a-half this week, rising more than 12 cents from the week before to $2.389 a gallon on the daily spot market in New York, according to the U.S. Energy Information Administration.

I know the airlines buy their fuel in blocks, but I think the days of under a buck per gallon are long gone. Bob

[a k]

OTHER FACTS

• For each pound of extra weight removed from an aircraft, AA saves as much as 11,500 gallons of fuel annually for AA's fleet of more than 600 aircraft. If 100 pounds of unnecessary weight was taken off each aircraft, AA could save more than 1.1 million gallons of fuel over the course of a year.
• Even though the majority of AA's fuel is consumed in flight (95%), the remaining amount consumed on the ground (5%) adds up to 128 million gallons.
• An average transcontinental flight on a Boeing 767 (New York to Los Angeles) lasts 5½ hours and consumes more than 7,400 gallons of fuel.
• An average Boeing 777 flight from Dallas/Fort Worth to Narita, Japan, lasts over 12 hours and consumes more than 26,000 gallons of fuel.

[poorfarmer]

look i'm all for "drill baby drill!" but no matter what gas goes up to it's not gonna stop me from going where i want to in my rig. there is no better way of travelin as far as i'm concerned!

[Gary - K7GLD]

I would agree with your example if there was only one company that sold oil in the world. That simply is not the case.

Perhaps - but there's still only *1* major stock market where the vast majority of crude oil is being traded, and the speculator profit skimming taking action.

And, of course, it really helps that we are now seeing lots of crude oil speculation being done by hedge-fund investors - some with Stimulus $$$, paid for by taxpayers by outfits using our own tax dollars against us...

The steady rise in the price of fuel is artificially managed, and NOT about "supply and demand", or lack of crude oil resources, but MOSTLY by financial maneuvering and political incompetence - and it WILL eventually pay a central position in destruction of our country - home of the "great American Dream", and the "best standard of living in the WORLD" last I heard, we're now #19 in the world - and dropping FAST!

[Snowman 1]

Diesel has already been to $5.00/gallon so to answer your question,....no. $7 -$8/ gallon, now that's going to be tough. Let's hope the liberal minority environmentalists see the error to their ways and drop their opposition to offshore drilling, ANWR and all the other ways we can supply energy before we get to that point. I'm not holding my breath, however.

Luckily for us, here in the great Northwest we have beautiful areas to see close by.

[Midniteoyl]

Originally Posted by a k

The airlines are still paying under a $1/gal for jet fuel(Diesel) How come?

First, Jet A is NOT Diesel...

Second, the avg price IN HUGE BULK FROM THE REFINERY, is $2.53 per gallon:
http://www.iata.org/whatwedo/economi...ges/index.aspx

Third, buy it at an airport as a Private Pilot and you'll pay through the nose: Aviation Fuel Prices by US Region

[Irover]

I may not be able to drive very far, but I will drive. I have a Honda 49cc moped that averages 100+ miles per gallon that replaced my truck. I will not be forced out of my MOHO. I will survive as I always have in the past 59 1/2 years of my life, unless someone snuffs me out. Irover WHY WORRY!!!!!! Act on it drive less by doing all chores in town on 1 trip, groceries, fuel, necessities. Saves $$$$$ to travel.

[wnytaxman]

Originally Posted by Gary - K7GLD

Perhaps - but there's still only *1* major stock market where the vast majority of crude oil is being traded, and the speculator profit skimming taking action.

And, of course, it really helps that we are now seeing lots of crude oil speculation being done by hedge-fund investors - some with Stimulus $$$, paid for by taxpayers by outfits using our own tax dollars against us...

The steady rise in the price of fuel is artificially managed, and NOT about "supply and demand", or lack of crude oil resources, but MOSTLY by financial maneuvering and political incompetence - and it WILL eventually pay a central position in destruction of our country - home of the "great American Dream", and the "best standard of living in the WORLD" last I heard, we're now #19 in the world - and dropping FAST!

I'm not sure where you are getting your information that all crude is only traded on merchantile exchanges, but it is about as wrong as wrong could be. There are two major commodities exchanges in the US and over 60 exchanges in total in the US. There are several hundred more worldwide with the biggest being in London. In addition not all oil is traded on exchanges as much of it is simply sold by producers to refiners. I know it fits into a tidy explanation that there is some worldwide conspiracy that is making our gas and diesel cost more, but that is simply not true.

The US dollar goes down and the cost of oil goes up. Same is true for any commodity that we do not make or grow here in the US. If we have to buy it overseas and our dollar is worth less in that countries currency then oil will cost more for us to buy it. Anyone who thinks that supply and demand has nothing to do with the price of any commodity needs to check out the other major commodities and their fluctuation over the years based on external forces. Drought in the Midwest causes wheat to go up while a bumper crop causes wheat to go down.

As long as we, as a nation, are a debtor nation that imports more than it exports we will see the dollar decline. With its decline will come higher priced imported goods, such as oil, but it will also make our exports more attractive. Even here in the US the cost of oil has had some positive impact in that it has made drilling in places like Western North Dakota and Eastern Montana more profitable. If the price goes down there will be less drilling here in the US because it costs too much to drill here.

[a k]

Just bought 100 octane LL (which is high lead for auto) $3.85/gal. That's 10% above wholesale here in the midwest.

Besides, I lost the American dream in Nov 2008.