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Why gas prices are still high

sawyerloggingon

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There has been a lot of talk lately by anti drilling green types that all this new oil being produced in America isn't bringing the price down so why drill in America. They blame high prices at the pump on greedy big oil and even greedier investors but the truth is ......

"The primary reason that crude oil today – Brent is at $123 per barrel – is higher than its prior average around $20 in the 1990s, or the $3.00 of the 1960s, is that the dollar has lost value over that time. It doesn’t have much to do with crude oil itself. Today, an ounce of gold would buy about 14 barrels of oil. In the 1960s, it would buy about twelve barrels.
In 1960 dollars, which were worth 1/35th of an ounce of gold as per the Bretton Woods gold standard system, today’s oil would cost $2.51. It appears that oil is actually cheaper today than it was in the 1960s. In 1925 dollars, which were worth 1/20.67th of an ounce, it would cost $1.48."

" From this you might conclude that a government that wishes to engage in an “easy money” monetary policy, of the sort that leads to a decline in currency value, would take many steps to suppress the negative effects of their policy, in commodity prices and interest rates. Then, they would enjoy much of the apparent benefit (possibly a more ebullient economy) without the apparent disadvantages. In Nixon’s day, this was done with price controls. Things are a little more subtle today, although you could call the Fed’s action in the U.S. Treasury market to be akin to price controls."

Oil Continues to Rise Because the Dollar Continues to Fall - Forbes

So you see Obama's easy money policy ( quantitative easing) is the real reason for your pain at the pump and if not for our new found oil reserves the price would be much higher than it is now.
 
You still have really cheap gas so stop complaining. I haven't seen gas in the U.S. raise to above 5$/gallon everywhere yet. Around here you pay around 5$/gallon and in cities like Toronto, Montreal, or Vancouver they are even higher.
 
You still have really cheap gas so stop complaining. I haven't seen gas in the U.S. raise to above 5$/gallon everywhere yet. Around here you pay more than 5$/gallon and in cities like Toronto, Montreal, or Vancouver they are even higher.

Your gas is high because of taxes on it to fund programs like "free" health care.
 
Your gas is high because of taxes on it to fund programs like "free" health care.

Exactly so stop complaining. Even without the tax it is still much higher than yours at just over 4$/gallon.
 
Gas prices in Europe are $8-9 per gallon. Just sayin'. :twocents:
 
You still have really cheap gas so stop complaining. I haven't seen gas in the U.S. raise to above 5$/gallon everywhere yet. Around here you pay around 5$/gallon and in cities like Toronto, Montreal, or Vancouver they are even higher.
It's $.62/ gallon in Saudi Arabia. I know, I know. The price of gasoline in Saudi Arabia has about as much to do with the price of gas in the U. S. as does the price of gas in Canada. What's troubling to many U. S. citizens is the fact that we have more energy available underground here than does Saudi Arabia.
 
Exactly so stop complaining. Even without the tax it is still much higher than yours at just over 4$/gallon.

I'm complaining because gas is artificially high due to Obama's fiscal policy of quantitative easing. Our economy needs affordable fuel to get up and running again. If gasoline was $3.00 a gallon now as it should be our economy would be doing much better than it is.
 
I'm complaining because gas is artificially high due to Obama's fiscal policy of quantitative easing. Our economy needs affordable fuel to get up and running again. If gasoline was $3.00 a gallon now as it should be our economy would be doing much better than it is.

Meanwhile in Canada our economy grows with fuel over 5$/gallon.
 
There has been a lot of talk lately by anti drilling green types that all this new oil being produced in America isn't bringing the price down so why drill in America. They blame high prices at the pump on greedy big oil and even greedier investors but the truth is ......

"The primary reason that crude oil today – Brent is at $123 per barrel – is higher than its prior average around $20 in the 1990s, or the $3.00 of the 1960s, is that the dollar has lost value over that time. It doesn’t have much to do with crude oil itself. Today, an ounce of gold would buy about 14 barrels of oil. In the 1960s, it would buy about twelve barrels.
In 1960 dollars, which were worth 1/35th of an ounce of gold as per the Bretton Woods gold standard system, today’s oil would cost $2.51. It appears that oil is actually cheaper today than it was in the 1960s. In 1925 dollars, which were worth 1/20.67th of an ounce, it would cost $1.48."

" From this you might conclude that a government that wishes to engage in an “easy money” monetary policy, of the sort that leads to a decline in currency value, would take many steps to suppress the negative effects of their policy, in commodity prices and interest rates. Then, they would enjoy much of the apparent benefit (possibly a more ebullient economy) without the apparent disadvantages. In Nixon’s day, this was done with price controls. Things are a little more subtle today, although you could call the Fed’s action in the U.S. Treasury market to be akin to price controls."

Oil Continues to Rise Because the Dollar Continues to Fall - Forbes

So you see Obama's easy money policy ( quantitative easing) is the real reason for your pain at the pump and if not for our new found oil reserves the price would be much higher than it is now.

I'm not a fan of Obama's, but I cannot totally blame it on him.

Since the 1970s, we have seen drastic decreases in competition among refineries.

In the 1980s and 1990s, we saw drastic decreases in competition amongst distributers and producers.

As with anything else, a decrease in competition causes an increase in price to the consumer. While someone might be able to blame certain things as causing that decrease, I for one cannot blame the current sitting asshole for something that has been going on for 40+ years now. He may be doing nothing to make it better, may be making it worse in the future, but he didn't get us to this point.
 
I'm not a fan of Obama's, but I cannot totally blame it on him.

Since the 1970s, we have seen drastic decreases in competition among refineries.

In the 1980s and 1990s, we saw drastic decreases in competition amongst distributers and producers.

As with anything else, a decrease in competition causes an increase in price to the consumer. While someone might be able to blame certain things as causing that decrease, I for one cannot blame the current sitting asshole for something that has been going on for 40+ years now. He may be doing nothing to make it better, may be making it worse in the future, but he didn't get us to this point.

His monetary policy of easy money has kept gas prices artificially high. This is the first time in history gas has gone up in a bad economy instead of down and the falling value of the dollar is to blame.
 
His monetary policy of easy money has kept gas prices artificially high. This is the first time in history gas has gone up in a bad economy instead of down and the falling value of the dollar is to blame.

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I hear about the falling value of the dollar frequently.
I've casually observed the dollar vs the euro for several years.
The dollar has ranged in value from $1.17 to $1.52 per euro.
The dollar is around $1.30 per euro nowadays.
Pretty much in the middle.
Gas prices are high because you and I have no alternative to gasoline usage.
 
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I hear about the falling value of the dollar frequently.
I've casually observed the dollar vs the euro for several years.
The dollar has ranged in value from $1.17 to $1.52 per euro.
The dollar is around $1.30 per euro nowadays.
Pretty much in the middle.
Gas prices are high because you and I have no alternative to gasoline usage.

Canada's dollar is worth more than ours right now, I don't think that has ever happened before, not that I recall anyway.

And then there is this to consider.


For example, if the dollar since 2002 had been as good as the:

• Chinese yuan, the price of oil today would be $82 and a gallon of regular gas would cost about $3.10;

• Euro, the price of oil today would be $77 and regular gas would cost about $2.90;

• Japanese yen, the price of oil today would be $71 and regular gas would cost about $2.75;

• Swiss Franc, the price of oil today would be $63 and regular gas would cost about $2.50.
 
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Canada's dollar is worth more than ours right now, I don't think that has ever happened before, not that I recall anyway.
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I googled this and yes the Canadian dollar is slightly stronger than the US dollar.
Slightly.
So the canucks seem to be only marginally better off than we are.
I'm still not sure how our monetary policy affects the world's oil prices.
 
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I googled this and yes the Canadian dollar is slightly stronger than the US dollar.
Slightly.
So the canucks seem to be only marginally better off than we are.
I'm still not sure how our monetary policy affects the world's oil prices.

Oil is traded in US dollars and quantitative easing has made the value of the dollar fall so it takes more dollars to buy a barrel of oil.
 
Oil is traded in US dollars and quantitative easing has made the value of the dollar fall so it takes more dollars to buy a barrel of oil.
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But what has the dollar de-valued in relation to?
If the $ is stable in relation to other currencies--which it is---why would oil cost more?
Would you say the recent crash in gold prices is an indicator of the $'s strength?
Honestly, the only reason I can figure for high oil prices is the lack of alternatives.
As long as oil alternatives cost more $$ than oil itself, we'll pay the price.
I don't really understand a lot of this....but I'm pretty sure we're being screwed.:)
 
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But what has the dollar de-valued in relation to?
If the $ is stable in relation to other currencies--which it is---why would oil cost more?
Would you say the recent crash in gold prices is an indicator of the $'s strength?
Honestly, the only reason I can figure for high oil prices is the lack of alternatives.
As long as oil alternatives cost more $$ than oil itself, we'll pay the price.
I don't really understand a lot of this....but I'm pretty sure we're being screwed.:)

The dollar is most definitely not stable in relation to other currencies, there is even talk of discontinuing the US dollar as the petro dollar.
 
Oil is traded in US dollars and quantitative easing has made the value of the dollar fall so it takes more dollars to buy a barrel of oil.

This may indeed have something to do with it. But since that time, we have seen a global increase in demand, mainly China and India. We have seen no substantial increase in production and no increase at all in competition. Increase demand, decrease competition which decreases supply and well, the consumer takes one in the shorts.

If all other factors had not changed and only what you are saying changed, then it would be easy to believe in your single cause theory. However, we have a complex system in which many variables have changed, so we cannot isolate a single variable as the sole cause.

If you want to make us believe that only Obama's policy is the difference, then show all variables/factors that relate to the price of gas and show that it is the only thing that can cause it.

Hell, if Obama would shut down the EPA silliness, we would get somewhere between a %20-50% increase in fuel mileage, that kind of decrease of demand over a 6 month period would bottom out gas prices. Not likely to happen though.
 
The dollar is most definitely not stable in relation to other currencies, there is even talk of discontinuing the US dollar as the petro dollar.
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Not true.
The dollar has been stable against all major currencies.
Look it up.
 
This may indeed have something to do with it. But since that time, we have seen a global increase in demand, mainly China and India. We have seen no substantial increase in production and no increase at all in competition. Increase demand, decrease competition which decreases supply and well, the consumer takes one in the shorts.

If all other factors had not changed and only what you are saying changed, then it would be easy to believe in your single cause theory. However, we have a complex system in which many variables have changed, so we cannot isolate a single variable as the sole cause.

If you want to make us believe that only Obama's policy is the difference, then show all variables/factors that relate to the price of gas and show that it is the only thing that can cause it.

Hell, if Obama would shut down the EPA silliness, we would get somewhere between a %20-50% increase in fuel mileage, that kind of decrease of demand over a 6 month period would bottom out gas prices. Not likely to happen though.

Actually production of oil has increased world wide to the point where OPEC is suffering. There is a lot of oil but there is also a lot of dollars that are worth less. We are awash in oil but the price keeps going up as the dollar goes down.





OPEC would need to cut production sometime in the second half of 2013 or early 2014 to stave off "a large drop in prices," Kuwait's leading bank said in a report over the weekend.

In its latest economic bulletin, released late Sunday, the National Bank of Kuwait laid out three price scenarios for the remainder of 2013, each of which could result in OPEC cutting production "to prevent prices from falling too far below the organization's unofficial $100/barrel target level." But the bank did not estimate how much output OPEC would have to cut or how much global crude oil prices would fall if it failed to act.

The scenarios are based on modest demand growth and increased output by non-OPEC countries, the bank said.


OPEC must cut crude output to prevent sharp price drop in coming months: Kuwait bank - Oil | Platts News Article & Story
 
there is even talk of discontinuing the US dollar as the petro dollar.
-------------------------
What would that mean?
Suppose oil costs 100 euros and 130 US dollars.
If the dollar was not used as the petro dollar and was replaced with the Euro, what would change?
Idontgeddit..........:confused:
 
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What would that mean?
Suppose oil costs 100 euros and 130 US dollars.
If the dollar was not used as the petro dollar and was replaced with the Euro, what would change?
Idontgeddit..........:confused:

Actually China is lobbying hard to be the petro dollar
 
I'm complaining because gas is artificially high due to Obama's fiscal policy of quantitative easing. ...

Then what was the excuse when Bush was prez? Look back this date 5 years ago, when Bush was Prez, and you will find that oil and gas were both higher than they are today.

You are making a bogus argument. It has much more to do with supply and demand.
 
Then what was the excuse when Bush was prez? Look back this date 5 years ago, when Bush was Prez, and you will find that oil and gas were both higher than they are today.

You are making a bogus argument. It has much more to do with supply and demand.[/QUOTE]

From post # 20


OPEC would need to cut production sometime in the second half of 2013 or early 2014 to stave off "a large drop in prices," Kuwait's leading bank said in a report over the weekend.

In its latest economic bulletin, released late Sunday, the National Bank of Kuwait laid out three price scenarios for the remainder of 2013, each of which could result in OPEC cutting production "to prevent prices from falling too far below the organization's unofficial $100/barrel target level." But the bank did not estimate how much output OPEC would have to cut or how much global crude oil prices would fall if it failed to act.

The scenarios are based on modest demand growth and increased output by non-OPEC countries, the bank said.
 
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