Down with the evil Gas lords. (yes, i am brave enough to post another from myspace)

[Kidlicious]

Originally posted by Spiffor
- gas is a dysfunctional market (oligopoly or whatever)

I think it's this one. The thing about producing a product like gas is that it's produced cheapest when you can continually produce it. That's why one or maybe two refineries will supply the local market. Otherwise costs are too high.

[JohnT]

Originally posted by Kaak
Spiffor: Demand isn't what making price go up. Prices are rising due to concern about what might happen, as they have been doing for a long time. Speculation causes futures to rise, which causes the market to rise.

this round of hikes is because of fears that we will go to war with iran, and something about nigeria, even though the ammount of oil it produces is somewhat trivial. Several of the guys in this thread just want you to believe that supply and demand are the only thing causing gas prices to go up, but rumor and speculation has as much to do with it. Pretty good deal for the oil companies when the supply is never actually disrupted

We have never claimed that the price of oil wasn't subject to psychology. That consideration was never even in contention. Don't put words in our mouths - it's bad enough you use other people's words for your arguments, don't you dare misrepresent ours.

[Imran Siddiqui]

- the market price of gas was largely understated in the US prior to the current craze.
- gas prices are set globally.

Those two basically.

When stating they are set 'locally', there is a baseline amount and then an adjustment based on local standards of living (or local Purchasing Power Parity). Gas in rural Alabama isn't going to cost more than gas in San Francisco, because the people in rural Alabama have less money to spend.

[Kaak]

Originally posted by Flubber


Had to respond


and when the stuff that is highest quality and easiest to flow is produced, oil companies go after the more remote, more challenging stuff-- like say oilsands or stuff thats under 2000m of ocean. This means costs are higher-- I'm surprised you didn't know that

lol...right, because they have to pay all of those royalties when they are drilling in international waters

[Spiffor]

Originally posted by Kaak
this round of hikes is because of fears that we will go to war with iran, and something about nigeria, even though the ammount of oil it produces is somewhat trivial. Several of the guys in this thread just want you to believe that supply and demand are the only thing causing gas prices to go up, but rumor and speculation has as much to do with it. Pretty good deal for the oil companies when the supply is never actually disrupted

Oh, I didn't know there were speculators who were buying gas like there's no tomorrow. I supposed the speculators were mostly interested in crude oil.

And did the hikes begin only with the fears over Iran? I would have imagined the current prices are the result of a consistent (if not greatly regular) trend to hikes over several years.

[KrazyHorse]

Originally posted by Spiffor

Yep, and I'm not wondering about oil prices here, but about gas prices (one would have to be a moron to think that there's a conspiracy between the rise of oil prices).

I'm not sure the demand for gas in the US has increased remotely as dramatically. And unless the gas market is global (like the oil market is), I'd imagine there is somehting fishy about the explosion of gas prices in localized areas where the demans didn't rise that much.

The cost of gas hasn't "exploded" in the US relative to the rest of the world, spiff. More demand for oil means higher prices on each barrel of oil, which means more expensive gasoline.

[Imran Siddiqui]

Originally posted by Spiffor
And did the hikes begin only with the fears over Iran? I would have imagined the current prices are the result of a consistent (if not greatly regular) trend to hikes over several years.

It really hit after the invasion of Iraq and then hit new highs with the Katrina devestation. Now, Iran fears are driving prices upward.

Add to that the fact that gas had been seriously underpriced in the US from the mid 80s to 2001, and you were guarenteed to see a shooting up of prices.

[KrazyHorse]

Originally posted by Kaak


lol...right, because they have to pay all of those royalties when they are drilling in international waters

Who the **** drills more than 200 miles out from shore?

The 12 mile "International waters" limit doesn't mean that you get to not pay the bordering country. 200 miles is the generally-accepted "exclusive economic zone".

You don't know what the **** you're talking about.

http://www.answers.com/exclusive%20economic%20zone

[Kontiki]

I burst out laughing when I read that one too!

[Imran Siddiqui]

I can't believe Kaak had no idea about the exclusive economic zones! Holy Jesus!

[Kaak]

Originally posted by Spiffor

Oh, I didn't know there were speculators who were buying gas like there's no tomorrow. I supposed the speculators were mostly interested in crude oil.

And did the hikes begin only with the fears over Iran? I would have imagined the current prices are the result of a consistent (if not greatly regular) trend to hikes over several years.

Spiff, they keep trying to throw this rest of the world stuff in there just ignore it... I think it all began after 9/11. Whomever decided supplies were going to disappear when we started invading people. Opec kicked up production, and supplies were ok. but the prices never really dropped off back to what they were before. Then new fears, new hikes, with prices never dropping all the way back down after concerns disappeared. so now, it seems like every week there is a new reason why supply is going to disappear, so prices keep going up...

[KrazyHorse]

All those platforms in the middle of the Atlantic ****ing ocean are pumping like there's no tomorrow

[Kaak]

I'll admit, I had no idea. My bad.

[JohnT]

Originally posted by Imran Siddiqui


I can't believe Kaak had no idea about the exclusive economic zones! Holy Jesus!

Dude, I once quoted (and cited!) statistics from Exxon's 10-k. His response - "Look at their annual report!"

[Kaak]

I also admitted there that wasn't familiar with 10-k.