Gee, miraculously just in time for gas to go up 20 cents the day before the holiday. What coincidence.

Don’t worry, Larry Kudlow says good times are just around the corner.

Every time OIL rises we should drag a dim politico out of their office and HANG THEM!

LLS

we r scrwd

Every time OIL rises we should drag a dim politico out of their office and HANG THEM!

LLS

Shouldn’t we just start a live thread for this topic?

Gee, miraculously just in time for gas to go up 20 cents the day before the holiday

...Bingo, we have a winner!!!!

Thanks. I just about choked on my coffee.

Yup, that “Bubble” is surely ready to burst, any decade now.

I started to “burst” about a month ago, and is apparently still doing so. (Must be a really big bubble?)

I drive 100 miles a day on my round trip to work and back. I have a Toyota Corolla which gets between 33-38 mpg. Last night I filled up on a tank that was very low. It cost over $48 for just over 12 gallons. At this rate for 5 days of work, I’m paying over $60 a week. I bought this car new soon after hurricane Katrina and have put over 70,000 miles on it since then. Here’s my question; Do I buy another similar used Corolla or Civic for my wife who drives half as much everyday, or do I get in line for a Prius or Civic Hybrid and let her have my Corolla? Right now she drives a Sienna that gets 21-27 mpg. We will still keep the Sienna for vacation trips, but can’t continue using it as a commuter with the rising price of gas.

ECB just raised rates 25 basis points. Look for an ugly open on the stock market, and $150 oil by the end of the day.

in which capital, in which country?

I know I'm gonna get alot of flap for this so bring it and set me straight!

Why do gas prices go up? Why shouldn't they if we keeping paying the risng cost?

Why do GOP keep foisting rino's upon us? Why shouldn't they if the republican electorate keeps voting for them...ie: McCain

Do I buy another similar used Corolla or Civic for my wife who drives half as much everyday, or do I get in line for a Prius or Civic Hybrid and let her have my Corolla?

I'd wait and buy an SUV for a nickel a pound. (Seriously, I may. They are popping up in front yards everywhere. My wife has always wanted one for hardware store trips, etc.)

You can buy a lot of $4.50 a gallon gas for a couple of thousand saved from last year's vehicle prices.

In the 1970's "Crisis", I fell for the economical car thing. I traded a Cadillac Brougham in for two Corollas. I suppose I left the car dealer with the same tonnage I drove in with, but really, I also left with two sets of car payments and higher excise taxes and insurance premiums, and I doubt I saved anything at the bottom line.

I had a hundred mile commute for years. With my car I was spending $45 a week in gas two years ago. Let's say the price doubled. Would the extra $45.00 a week in higher gas prices really pay for a new economy car? Maybe, maybe not, when you add the taxes and premiums and interest.

A Prius ?

This is a car for people that only go around in the city with a lot of stop and go - otherwise it will not safe you a millilitre of fuel in comparison with better and cheaper alternatives.

Get a Golf Diesel.

I’m still waiting for the flurry of FReepers to arrive to tell us that the oil ‘bubble’ is about just about ready to burst and send gas prices back down to $2/gal. It’s going to happen, you know. Any day now.

Waiting...

Waiting...

Agreed. Speculators are pushing hard to bust the $150 mark. In the meantime, Ben-Ben does nothing but tell W what he thinks he needs to print to save the banks. The Feds should raise rate 50 basis points next week if they’ve got any sense. The credit market is snafued at this anyway. The DOW will close below 11 today too.

Or the “Conspiracy Theory” nuts who will post some example of the Oil Companies manipulating the supply.

That one burns me the most.

So tell me; How can “Speculators” do this when they barely control 10% of the market?

Could it actually be supply and demand?

In the 1970's "Crisis", I fell for the economical car thing. I traded a Cadillac Brougham in for two Corollas. I suppose I left the car dealer with the same tonnage I drove in with, but really, I also left with two sets of car payments and higher excise taxes and insurance premiums, and I doubt I saved anything at the bottom line.

You traded in a Cadillac that had the potential of maybe 80,000 miles before a complete engine overhaul including the suspension and any other wear and tear items, for two Corollas that probably could go well over 200,000 if you treated them right and kept them around. The US cars weren't just taking a pounding for lousy gas mileage back in the 70's and 80's. I wouldn't be surprised if you hated driving the small cars after living the big life in a Cadillac, since back then the Corolla was a stripped down utilitarian model of what a car needed to be.

I'm not buying a gas sucking monster regardless of the price, because I'm planning for the worst case scenario of gas prices not just going up, but compounding upward to where a gallon will be twice what it cost every year. July 2009 - $8.00 / July 2010 - $16.00 until the US once again becomes a oil producing power or my Corolla is looked at as a gas sucking monster because there is a new energy source used to cars and trucks. These are the times when you plan for the worst and hope for the best.

I was going to pump $15, all I had on me at the time. Put in the nozzle, turned to answer a question one of my kids asked through the window, turned around and had pumped $30 dollars. Boy,it doesn’t take long to pump $30 worth of gas. Thank goodness I had my credit card with me.

You traded in a Cadillac that had the potential of maybe 80,000 miles before a complete engine overhaul including the suspension and any other wear and tear items, for two Corollas that probably could go well over 200,000 if you treated them right and kept them around.

Haha, Yes, they DID! We marvelled at them..nothing but tires and oil changes, and the only reason we got rid of them is that we got TIRED of looking at them.

They could still be roaming around somewhere, for all I know. One of the jokes we used to make about their longevity was, "You know, the MOON is only 248,000 miles away. Both these cars have done that."

I think that right now we could announce a find of a 3 Trillion barrell oil field off the Texas coast, with Oil rigs already pumping oil, and the price would continue to rise.

There is an unexplained inertia to the oil market right now. China just announced a couple of weeks ago that they were removing the state subsidy to oil prices and it had NO EFFECT WHATSOEVER on the price of oil.

Most popular demand of a personalized license plate in Dubai, "US Bought It"

I understand the concept of supply and demand, but did China and India really start buying so much gas in such a short amount of time for oil to double in less than a year? And if so, why are the car manufacturers hurting? It would seem the extreme auto purchasing going on over there would be lifting them up if they are using so much that now the oil prices double almost overnight.

The MOST popular auto in Dubai and the UAE is the Ferrari and the Lamborghini. They must also be building roads to accommodate them, curves etc, I would imagine.

Saturday, May 31, 2008

The rapid price increase is mostly due to the value of the US Dollar. Partly created by the Sub-Prime Lending scam.

Add to that, the fact that our lack of response to our own Domestic supply has caused us to import more refined product. And there you have it in a nutshell.

And yes, the Middle East (India) and the Indochina/Chinese industrial expansion has had the biggest impact on demand as well as supply.

I understand the concept of supply and demand, but did China and India really start buying so much gas in such a short amount of time for oil to double in less than a year? And if so, why are the car manufacturers hurting?

Because many of the big car manufacturers haven't really understood these markets well to realise that only small cars sell well here.

Tata, the Indian auto maker, did so well, that they now own the Jaguar and Land Rover brands.

I was going to pump $15, all I had on me at the time. Put in the nozzle, turned to answer a question one of my kids asked through the window, turned around and had pumped $30 dollars. Boy,it doesn’t take long to pump $30 worth of gas. Thank goodness I had my credit card with me.

That reminds me of a time back in the mid 70's when I only had $5.00 in my pocket, had no credit cards, and had an almost empty gas tank in my C10 pickup truck. I had to get exactly $5.00 worth of gas into the tank, and got to $4.99 and gently squeezed the extra penny with the nozzle to $5.00 exactly. When I let go of the lever, it jumped an extra 2 cents. I handed the $5 dollars to the attendant, and he asked for 2 cents. What he got was 2 cents worth of my telling him what I thought of his gas nozzle lever. I stormed off and left him there to pay for it. I'm still a fugitive from the law on that one.

Research firm Ennis Knupp and Associates says $139 billion had been funneled into energy commodities, primarily crude oil, by the end of March — and it estimates more than half of that is from retirement money.

Unlike the stock market, where there are a limited number of shares for each company, futures markets have no limits on contracts available. As long as a buyer can find a seller for each contract, investment opportunities are virtually unlimited.

Critics say retirement funds that accumulate contracts are artificially driving up commodity prices. In the case of oil, that means higher gas prices and more expensive food and other goods. "If they're going to be in the futures market they need to trade rather than take this buy and hold strategy," said Michael Masters, portfolio manager of hedge fund Masters Capital Management. "That is the worst possible thing for the futures market."

From a March Article:

As far as “buying on margin” consider this summary from author William Engdahl:

“A conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.”

I think those things are rigged for OCD people. You get to $24.97, tap it and it bumps to $25.03. So then people don’t want to pay an odd amount and keep going to $30.00, but Noooooo, it’s $30.04. And on and on and on. And I do not speak from experience on this phenomenon. hehe

Just do the math. The difference in the cost of the cars vs the number of miles driven times the savings in fuel.

I almost NEVER see it work out.

“The rapid price increase is mostly due to the value of the US Dollar.”

Exactly, except exporting petro dollars is a big contributor to the weakness. Drilling at home would be a big help to the demand/supply problem AND the dollar.

“oil prices double almost overnight.”

demand supply are not linear equations. Marginal demand can move prices way up the curve.

Plus oil is up only in the low teens in constant currency. Not that big of a jump.

You took all of the fun and enjoyment out of a post that should have made you chuckle and enjoy the bit of truth in the statement.

LLS

I agree completely with your post. Most people have a hard time with math and economics. Or they defy the obvious due to a bogus gut feeling.

That is why some of us are hedged against higher prices for oil and others are not.

Plus if you think there is a radical price jump (double) in gas you should take the savings from buying the cheaper car and invest in crude. Much better economic decision.

Too bad Thomas Sowell is not required reading.

“I’m not buying a gas sucking monster regardless of the price, because I’m planning for the worst case scenario of gas prices not just going up, but compounding upward to where a gallon will be twice what it cost every year. July 2009 - $8.00 / July 2010 - $16.00 until the US once again becomes a oil producing power or my Corolla is looked at as a gas sucking monster because there is a new energy source used to cars and trucks. These are the times when you plan for the worst and hope for the best. “

This makes no sense. You should consider price if your decision is economic. If you can save money on a gas guzzler you could invest the savings in crude.

I am not saying do this or do this. But take out a pad of paper or fire up excel and do the math. I think you may be either surprised or maybe just happy in knowing your decision is correct. Don’t forget the time value of the money in the case of the extra/lower price for the cars.

Try this.

http://www.hybridcars.com/calculator/index.php

Thanks, I save over $3,000 a year in gas with a Civic Hybrid at $4.00/gallon over our Sienna. As the price goes up, I save more.

These are the times when you plan for the worst and hope for the best.

Wise advice.

“Thanks, I save over $3,000 a year in gas with a Civic Hybrid at $4.00/gallon over our Sienna. As the price goes up, I save more.”

So what does the Civic Hybrid cost? Do you plan to sell the Sienna to reduce the net cost of the Civic? What is the difference in insurance? Taxes? License? Is there an investment you could make with the difference in price that would have a better yield than the savings?

Seems like you do a lot of driving. I did not run the calculator on your differences, but $3000 a year is a lot of savings. (I drive a 15MPG Tundra about 15,000 miles per year so my total gas spending is $4000. If I got a truck that got 20MPG I would only save about a grand.)

The key concept in economics is the marginal cost. For example: if you take a 500 mile vacation every year to see grandma then at $4 this year the trip for the 20 MPG car is $100. Which seems like a lot of money. But the $3 trip last year costs $75. So the marginal decision is on $25 dollars. If you get 30% on the better gas mileage car the better economic decision should have been to use the high MPG car LAST YEAR. (Probably should check the math, but I think you get the idea.)

Sorry, I love this stuff. I'm actually ahead on gas prices. I waited for the truck prices to fall (my Tundra was a steal) and put the savings in investments.

If you really think we are going to $10 +/- gas there are way better ways to use your money than buying any car. For one thing the dollar would have to be cut in half. US exports would sky rocket. Going to Europe would be gold plated - short the airlines. Lots of strategies.

If a hybrid and an equivalent non-hybrid had the exact same costs (all in) it would be a no-brainer, but then again the price of gas would have also probably come down.

And who are those manipulating the price of oil and gasoline?I do know that Democrats in Congress are restricting oil drilling and oil production from the trillions of barrels of oil in shale in the U.S. and other places. And I know OPEC is also holding down oil production to rob us Americans blind.

http://www.americansolutions.com/General/?Page=1c1a10c1-15fd-4ad8-a426-b9a87f635903

“U.S. Oil Shale Resources Are Three Times Larger Than the Current Oil Reserves in Saudi Arabia

YET CONGRESS RECENTLY VOTED TO MAKE IT ILLEGAL TO DEVELOP U.S. OIL SHALE RESOURCES

With oil prices at an all-time high, Americans are facing escalating gas, diesel, and aircraft fuel increases. Oil prices are projected to increase further.

Congress, however, has made it illegal to develop vast domestic oil resources in large parts of the United States.

The most startling Congressional prohibition on domestic oil production concerns the recently enacted ban on the development of oil shale resources in parts of Colorado, Utah, and Wyoming in the Green River Formation. According to a Rand Study estimate, this reserve contains over one trillion barrels of oil, with 800 billion barrels fully recoverable, or three times the current oil reserves as Saudi Arabia:”

Aren’t you, RSmithOpt, repeating the Democrat talking points, blaming the speculators etc.? Your post sure sounds like Democrat talking points to me.

The fact is that speculators and oil companies are not manipulating oil prices. Oil prices are rising because supply has not kept up with demand since 2005. That’s simple economics. World Oil production has barely risen since 2005 while world oil demand has skyrocketed during that time.

http://en.wikipedia.org/wiki/Peak_oil#Production

“World oil production growth trends were flat from 2005 to 2008. According to a January 2007 International Energy Agency report, global supply (which includes biofuels, non-crude sources of petroleum, and use of strategic oil reserves, in addition to crude production) averaged 85.24 million barrels per day (13.552×106 m3/d) in 2006, up 0.76 million barrels per day (121×103 m3/d) (0.9%), from 2005”

And even though demand has skyrocketed prices are only up about 15%. What you are seeing at the pump is a very weak dollar.

i am BAD today, I will admit

well, it is a big travel weekend.
Supply and demand, and all that. Stop at any gas station this week, and there will be long lines of people filling up, because they are driving somewhere out of town.
-speaking of which; I’ve got to go fill up, as I’ve got a 100 mile drive ahead of me. ;^)

Let’s sell our wheat, oats, corn and soybeans, etc to all those OPEC assholes for $146 dollars a bushel!!!