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Gas Up

By TChris, Section Off Topic
Posted on Mon Feb 20, 2006 at 10:43:25 AM EST
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by TChris

Fill your tank today. You can bet that gas prices will be higher tomorrow.

Oil prices rose 2.6 percent today after a series of violent attacks by militants in the Niger Delta that shut down nearly a fifth of Nigeria's oil production.

UPDATE: The president assures us that he's on top of the whole energy thing. Don't even worry about it. You'll be driving a battery powered car before you know it. Heck, don't even pay attention to how much ExxonMobil siphons out of your wallet this winter, because we're "on the threshold of new energy technology that I think will startle the American people." Any day now, Bush tells us, we'll see "some amazing breakthroughs" with, you know, energy stuff, like solar panels that'll give you more energy than you need. And this will all happen, um, really soon.

Today's version of the Bush administration's energy policy: just wait for something good to happen.

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    Gas Up | 27 comments (27 topical)
    Re: Gas Up (none / 0) (#1)
    by Punchy on Mon Feb 20, 2006 at 10:59:59 AM EST
    I've never been so baffled by gas prices as I am nowadays. Friday night around 5pm, gas in my town (Midwest) was $1.99. By 9am Saturday, back up to $2.12. Thirteen cents in 16 hours. On what basis, being the markets were closed? I've long resisted believing that gas prices are artificially/criminally manipulated, but I'm beginning to think there's a larget racket going on with oil companies, of which the Feds have no desire to investigate... Thanks for the heads-up, T

    Re: Gas Up (none / 0) (#2)
    by Talkleft Visitor on Mon Feb 20, 2006 at 01:31:57 PM EST
    Better yet, take public transit if you can.

    Re: Gas Up (none / 0) (#3)
    by Joe Bob on Mon Feb 20, 2006 at 01:40:00 PM EST
    If anyone had any doubts that Peak Oil has arrived, let this be an illustration. There isn't enough slack in global oil production to make up for disruptions in a mid-level producer like Nigeria. IIRC, gasoline is a commodity sold in spot markets, ergo that's why prices fluctuate so rapidly. Generally, the price you see on the sign is what the retailer will have to charge to make a profit on the next shipment of gasoline they have to buy.

    Re: Gas Up (none / 0) (#4)
    by jimakaPPJ on Mon Feb 20, 2006 at 02:14:34 PM EST
    Gasoline at the pump is priced based on replacement cost. i.e. A gallon that is sold today for $2.00 must be replaced. If the replacement cost goes up 20 cents, then the price will immediately go up 20 cents. And no, it doesn't "immediately" go down when the cost goes down.

    Re: Gas Up (none / 0) (#5)
    by Sailor on Mon Feb 20, 2006 at 02:55:26 PM EST
    So the economic gas model is different than every other consumable, huh! Who would have guessed. Well that sure explains why it goes up and comes down at EVERY station at the same time in my area, no matter who their supplier is or what there reserves are. And how it goes up every weekend and comes down on Monday. And why it is always cheaper 15 miles north of me by an average of 9 cents. It also explains how even 2.6% will translate to 35 to 75 cents at the pump. It aslso explains how with $9Bil in profits they need tax incentives to, you know, actually look for oil.

    Re: Gas Up (none / 0) (#6)
    by jimakaPPJ on Mon Feb 20, 2006 at 03:06:40 PM EST
    sailor - No. All consumables are priced at replacement cost.... plus what the seller thinks they can get. No news there. And yes, when someone raises prices the others will typically follow, but not always. I fact, the Exxon station near me is always about 5-7 cents higher, and WalMart is about 10-11 cents lower. And if those 9 miles away stations are always 9 cents higher, I would guess taxes. Do I love big oil? No. I just can't see a workable solution at the present time.

    Re: Gas Up (none / 0) (#7)
    by desertswine on Mon Feb 20, 2006 at 03:25:10 PM EST
    Everyone knows there's no collusion between the energy giants and the US govt. I can't tell where one ends and the other begins.

    Re: Gas Up (none / 0) (#8)
    by Talkleft Visitor on Mon Feb 20, 2006 at 03:33:35 PM EST
    Energy issues are best addressed by the market. When oil becomes expensive, things like extraction from Canadian oil sands will become economically viable. Likewise, synthetic gas from the US' huge coal reserves will become viable. Of course, TChris would have to understand the concept of a market economy for that to sink in. I have slim hopes of that - he thinks that the President is in charge of it.

    Re: Gas Up (none / 0) (#9)
    by Punchy on Mon Feb 20, 2006 at 03:37:50 PM EST
    Why can't the conservatives just come here and engage in didactic conversation with the rest of us? Why must they rip others? Why must they insult the guy/gal running the blog itself?

    Re: Gas Up (none / 0) (#10)
    by roy on Mon Feb 20, 2006 at 03:40:07 PM EST
    So when the government sticks its nose into an industry, that's fine, but when the people in that industry ask for breaks and less nose-sticking, that's collusion? That said, I'll probably fill up tonight. Free marketeers are allowe dto speculate, too.

    Re: Gas Up (none / 0) (#11)
    by Talkleft Visitor on Mon Feb 20, 2006 at 03:54:11 PM EST
    Punchy, I'll stop ripping TChris on things like the market when he shows the faintest understanding of the concept. Read his post - he seems to think that the President is in charge of energy prices. Here's the larger point - you might have noticed that with items that are lightly regulated - soap, toothpaste being two that come to mind - are never in a shortage situation. They are also available at pretty reasonable prices. Now look at things that are highly regulated - medicine and oil come to mind - and we get periodic shortages and high prices. There's a lesson in that.

    Re: Gas Up (none / 0) (#12)
    by Linkmeister on Mon Feb 20, 2006 at 06:24:05 PM EST
    Robertson's sarcasm meter isn't working. If he can't detect it in TChris's phrases, he needs to take a class in remedial language arts. Good grief.

    Re: Gas Up (none / 0) (#13)
    by Talkleft Visitor on Mon Feb 20, 2006 at 07:50:48 PM EST
    I saw his attempt at sarcasm. However, I read this site daily. TChris' kneejerk reaction is to assume that government can fix any problem like this. His faith in the market is about 0, his faith in government, about 100. Most of us live somewhere in between.

    Re: Gas Up (none / 0) (#14)
    by Sailor on Mon Feb 20, 2006 at 07:54:04 PM EST
    sailor - No. All consumables are priced at replacement cost.
    Uhh, NO! My grocery store, my bank, my mechanic all charge for what the items cost them at the time and their mark up. Not for what they will cost them in the future.
    ... plus what the seller thinks they can get.
    Aye, there's the rub. Just like heroin or any other addicts, (and bush has said we are addicted to oil), addicts will pay whatever the price. (BTW, addicts will also say anything to keep their supply;-)

    Re: Gas Up (none / 0) (#15)
    by Sailor on Mon Feb 20, 2006 at 09:30:12 PM EST
    TChris' kneejerk reaction is to assume that government can fix any problem like this. His faith in the market is about 0, his faith in government, about 100.
    Oh man, that target is easier to hit than a 78 year old man dressed in orange 30 yards away;-)

    Re: Gas Up (none / 0) (#16)
    by bad Jim on Mon Feb 20, 2006 at 10:09:01 PM EST
    I have to agree with PPJ on this one. Most business do, or should, price according to replacement cost, which is yet another reason to keep inventories lean and to pay close attention to the supply chain. I'd even agree that the market is the best way to deal with the oil shortage, and that's why I'd advocate phasing in a stiff tax on oil, with rebates on regressive taxes (payroll, sales) to make it revenue-neutral.

    Re: Gas Up (none / 0) (#17)
    by Che's Lounge on Mon Feb 20, 2006 at 11:08:32 PM EST
    So "incent" is now a verb? I guess because the Emperor said it.

    Re: Gas Up (none / 0) (#18)
    by Al on Mon Feb 20, 2006 at 11:14:23 PM EST
    The best way to deal with the increasing oil shortage is to ride a bike. As for the government intervening in the oil market, which makes JR's hair stand on end, what do you call the war in Iraq? (Oh, right. They're bringing freedom to the Iraqis. My bad.)

    Re: Gas Up (none / 0) (#19)
    by Linkmeister on Mon Feb 20, 2006 at 11:31:32 PM EST
    As for the government intervening in the oil market, which makes JR's hair stand on end, what do you call the war in Iraq?
    A travesty. Worse, they're not even intervening in that market well, since Iraq's production is down due to insurgent attacks and infrastructure projects half-completed. And have you seen the pictures of the gas lines there?

    Re: Gas Up (none / 0) (#20)
    by jimakaPPJ on Tue Feb 21, 2006 at 07:14:45 AM EST
    Al - Riding a bike us a great idea, unless you have a 10 mile commute, live in Greenbay, etc.... sailor - Yes. The inital stocking, be that in a service station's storage tank, grocery store shelf, etc., is based on "current cost." Now the "current price" had "expected future" cost built in. Now, if there is an announced or expected cost increase of the raw mnaterial, be that crude oil or grapes, the merchant will immediately increase the price to cover the cost increase. Why? Because if he does not, he will have to use the profit he made on this sale to pay for the more expensive replacement product. BTW - Your mechanic doesn't count unless he is keeping a large inventory of parts. If he's going down to the local parts store, buying a part and installing then charging you for labor plus what he paid for the part, the parts store is doing the cost change bit. badjim - As soon as you add that "stiff tax" the market is being ran by the government. Want low gasoline prices? Get rid of the approxinately 55 cents per gallon of state and local taxes. BTW - If you find out when they are going to add the tax, let me know so I can short the market. Mama needs a new Cadillac....

    Re: Gas Up (none / 0) (#21)
    by Talkleft Visitor on Tue Feb 21, 2006 at 02:39:03 PM EST
    PPJ... If you find out when they are going to add the tax, let me know so I can short the market. Mama needs a new Cadillac.... The new caddys are nice...I looked at them....but I just bought a new Z-06 Vette....runs on premium...& lots of it...LOL You're right about the tax. If our (local) politicians were REALLY concerned about prices.. they could act and get the prices way below $2. If they really cared that is...

    Re: Gas Up (none / 0) (#22)
    by jimakaPPJ on Tue Feb 21, 2006 at 03:38:28 PM EST
    BB - It would be outrageous to put me in control of something that fast and powerful.... But there was a time. There was a time. ;-)

    Re: Gas Up (none / 0) (#23)
    by jimakaPPJ on Tue Feb 21, 2006 at 03:39:26 PM EST
    Uh, BTW - Local gas prices dropped 3 cents last night. Guess they didn't get the word.

    Re: Gas Up (none / 0) (#24)
    by Talkleft Visitor on Tue Feb 21, 2006 at 08:56:34 PM EST
    You should go for a H2, PPJ, I'll send you a 'support our troops' ribbon to display on the rear of the vehicle.

    Re: Gas Up (none / 0) (#25)
    by jimakaPPJ on Wed Feb 22, 2006 at 10:42:44 AM EST
    Dark Avenger - I already have half of that. As to why you would think I want a H2 is beyond me.

    Re: Gas Up (none / 0) (#27)
    by kdog on Wed Feb 22, 2006 at 12:59:38 PM EST
    Just last night I helped a friend pour some diesel gas in his heating oil tank so he has heat until he can get the scratch together for a heating oil delivery. I offered to spot him a few bucks but he's too proud. I'll tell him the president said not to worry about energy costs.

    Re: Gas Up (none / 0) (#26)
    by Talkleft Visitor on Wed Feb 22, 2006 at 07:36:42 PM EST
    It's called sarcasm, and you can deal with it, ppj

    Gas Up | 27 comments (27 topical)