The lowdown on record-high gas prices

[JBMoney]

San Franciso Chronicle, by Jeff Jacoby (http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/21/EDGD56OL3U1.DTL) - ...Sure, the $2.03 being charged at the pump today seems high. But in actual financial terms, it's a lot less onerous than the $1.25 a gallon motorists were paying in 1980 -- a whopping $2.80 when translated into 2004 dollars. (Adjusted the other way, today's $2.03 pump price is equal to less than 90 cents in 1980 dollars.) When it comes to historical price comparisons, nominal dollar amounts signify little. It is the inflation-adjusted price that tells you whether the true cost of a product has increased, decreased, or stayed the same.

There's also the question of affordability. Adjusted for inflation, gasoline prices today are roughly where they were in the 1950s -- but per- capita real income then was no more than half of what it is today. Which means that for a typical driver 50 years ago, gasoline was really twice as expensive -- in terms of the bite it took out of his budget -- as it is now. Only in the shallow sense of nominal pump price is gasoline today "setting record after record." In reality, it is much cheaper than it used to be.

Quit yer belly-aching.. (http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/21/EDGD56OL3U1.DTL)

[Sideout]

Quit yer belly-aching..

I'm glad someone finally said it ;)

It's the beginning of summer and gas prices are up...so?
Are they higher than some years? Yes. I are they not as high as others I can remember? Yep. Ok, so it sucks to pay lots for gas. If you really can't handle the extra 5 bucks to fill up your SUV every other week (how did you pay for that sucker then?) then just don't drive. Otherwise, do what he said ;) Must be a slow news week...

[RicardoHead]

Screw this. Knowing that grandpa suffered as much as I do doesn't make me feel better.

This wanker is just trying to rationalize the price. Anybody who buys into this line of bullshit would be happy to pay $4,000,000 for that PC on his desk right now because that's what the equivalent computing power cost in 1982.

[Sideout]

I think he was just making the point that even in times like this, gas prices have always been kept artificially low as opposed to just letting them run with inflation. We've still got the cheapest gas compared to most countries and we complain the most.

[Texan]

Rationalize it all you want. It still surpises me to look at the gas prices. I'm grateful that hubby and I only work a couple of miles from home. We are in a much better situation than his last job where he spent all day driving around central Texas to visit patients in nursing homes and got no compensation for mileage/gas from his employer.

I'm more concerned about the overall effect. This is going to affect food prices because it costs more for the truckers to deliver food. What about airline tickets? Cruises? The consumer will end up absorbing the extra cost.

[RicardoHead]

We've still got the cheapest gas compared to most countries and we complain the most.
Sideout, I lived in one of those effed up countries (Germany) for 7 or 8 years where the government screws you more on gas than the gas giants and OPEC. There's a damn good reason I left.

That argument that "we have it good compared to other countries" is bogus because firstly, we are not in any competition to see if we can maybe pay more, and secondly, unlike Europeans in general Americans are not sheep. We complain, but we then tend to take action and apply pressure. Europeans (Germans at least, but it seems endemic there) tend to complain and then they complain and then they complain, but they don't take any action upon themselves, then they whine that they are victims. Most Americans do something proactive about it when they feel "victimized," IMHO. That's why (most of) our ancestors got the hell outta Europe to begin with, and that's why we "complain the most" now. Rationalizing the high gas prices and saying "shut up" is to me unAmerican.

Texan BTW is right about the spillover effects of these prices, as I mentioned in another thread (click link below), and Bush better realize that a lot of these effects are going to hit around election time. Valid or not, the Prez will be blamed for this no matter what side of the political coin he's on. If you asked me 3 months ago would I vote for Bush over Kerry, I'd have said 100% yes, today I'd probably say 75%, not because I in any way like Kerry (he's a douche) but because I want to ram a 2x4 up Bush's ass ... sideways.

Head's excellent and thought provoking analysis, worthy of Einstein (http://bushwhacked.net/forum/showpost.php?p=123282&postcount=40)

[JBMoney]

I think the point is that gas prices have not even kept pace with inflation. Americans are somewhat naive to think that gas would for some reason be immune to the price pressures that affect every other product, indefinitely. These 'citizen interviews' with pissed off folks who drive MAYBE 30 miles a day blaming the administration for everything is ridiculous.

Personally, I'd be more worried about the price of things like groceries, etc., due to distribution costs.

If you think voting for Kerry is going to get gas prices down, you are sorely deceived. I'd get used to the prices as they are, with a few minor downturns.

Demand is going to push this market more than supply, and I know for sure that Bush has absolutely no control over the Chinese demand for raw materials. Something I haven't seen many articles mention is that China's demand is skyrocketing. They are sucking up everything they can buy to build that country, and in the process, they are raising the prices of everything including steel, oil, etc. That ain't going to change, no matter who is President, so get used to it.

P.S. And for all those folks who say Bush ought to be forcing Arab countries to raise supply, I better never hear again about how we shouldn't be involved in Middle East affairs, or about the Bush's 'Sinister' connections to the Saudis.

[wrecker05]

Rationalize it all you want. It still surpises me to look at the gas prices. I'm grateful that hubby and I only work a couple of miles from home. We are in a much better situation than his last job where he spent all day driving around central Texas to visit patients in nursing homes and got no compensation for mileage/gas from his employer.



So write off the mileage. 33 cents a mile adds up. :Poke:

[RicardoHead]

JB, I never thought gas prices were immune from inflation, nor do I even come close to thinking Kerry could help the gas price situation, nor that he would be better than Bush in almost any regard (I'm sure there's gotta be one but damned if I could think of it).

The only reason I would think about Kerry over Bush today is to be negative, but sometimes being negative feels good even if you know it's wrong - essentially cutting off your nose to spite your face. What I mean here with "negative" is to in effect punish Bush for the hardships that quite a few of us are going thru in today's economy, and admittedly for most all of which Bush really isn't responsible, and all that even though I am in full agreement with most all of his efforts to correct the issues. Namely I'm talking here about a shitty job market created by a weak economy (which he inherited) exascerbated and prolonged by 9-11 for which taxes and interest rates were correctly lowered to help the situation which made house prices double while it was tough to find a real job and now gas has near doubled too. So now I'm sitting here finally in a real job looking for houses 65 miles away from my workplace because they are the only reasonably priced ones and when I buy I gotta pay friggin OPEC and these shithead oil companies which deep down we all "suspect" Bush is in the pockets of. Makes you wanna hit the dude, even though he's done all the right and prudent things along the way. And yeah I'd leave San Diego in a heartbeat to go to an area where a nice house is affordable, but I don't want to go thru another 18 month of bullshit jobs while trying to find a real job. It sucks. They say the economy is be doing better statistically but it aint creating real jobs yet.

As for China buying up everything, sure that is part of the equation, but their demand for oil hasn't gone up 100% in the past 6 months to cause a sudden surge in prices. They along with geopolitics are just the excuse of the month which last year in January was the threat of the Iraq war, in May was the Iraq war, in October was OPEC and Suadi Arabia's bullshit, in January was OPEC and China, and now is China and geopolitics. It's all a bullshit blame game to justify the oligopolistic gouging of the world economy, and only extremely loosely based upon any inflation index known to man other than the inflated greed-thru-monopoly index.

As such if any pol can put up a reasonable and workable plan to ween us off the dependence on foreign energy sources, he's got my vote. Kerry's not that man, however, but I still wanna punch Bush because "the incumbent is always to blame."

[Rguess21]

Personally, I'd be more worried about the price of things like groceries, etc., due to distribution costs.

That would including higher taxes to fund the municipal, county, state, & federal agencies fuel costs. :(

[JBMoney]

Contra Costa Times (http://www.contracostatimes.com/mld/cctimes/news/editorial/8737780.htm?1c) - ...Unfortunately, there has been a lot of misinformation, if not hysteria, about gasoline prices. Before anyone can devise a policy to deal with rising gasoline prices, a few myths must be dispelled. First among them is that today's gasoline prices, when inflation is considered, are particularly high.

Gasoline at $2 today is the inflation-adjusted equivalent of 81 cents in 1980 and 49 cents in 1974. In those years, each a year after OPEC squeezed oil exports, prices were higher. Gas in 1980 was selling above $1 a gallon and about 70 cents in 1974. Even in the 1950s, gas prices were about what they are today, once inflation is figured in.

Another myth is that the big oil companies are primarily to blame for the high prices. Certainly, oil firms, like any other business, seek to increase their profit margins. But a look at profit margins of the big oil firms does not reveal any excess. ChevronTexaco, for example, had a profit margin of 8.2 percent in the first quarter of this year. ExxonMobil's profit margin was 7.95 percent. These margins have risen but are not out of line with other businesses.

The real causes for the higher gasoline prices are higher global demand, uncertainty about Mideast oil supplies, OPEC production restrictions and not enough refining capacity in the United States.

China is now the second largest user of oil. Not long ago it was not a significant factor. Also, U.S. consumption continues to rise despite high prices, in part because there is no national energy policy that gives conservation and fuel efficiency a high priority.

....

But no one should expect a lengthy reoccurrence of the relatively cheap gasoline we had in the latter 1980s and throughout most of the 1990s. On the other hand, higher oil prices could open opportunities for development of other petroleum sources such as the vast oil sands in Canada, alternative fuels and innovative vehicles such as hybrid cars and now SUVs.

[unregistered871]

Alaska should be drilled.

[Sideout]

Gas prices here have dropped NEARLY 10 CENTS in just the LAST FEW DAYS! What should I do? Should I panic? :scary: It's a crisis! Something is wrong! This is the end! I'm scared! :o


:rolleyes:

[RicardoHead]

Gas prices here have dropped NEARLY 10 CENTS in just the LAST FEW DAYS!

Not here in San Diego they haven't.

Fucking oil companies and Opec bastards making me walk to the newstand down the street ...

[JasmineDreamz]

It's a sign from above. Start filling every available container with gasoline and hoard it. Take advantage of these low low prices. I remember when we complained when gas rose to .75 a gallon. (why is there no damn cent sign on these keyboards?)

[JBMoney]

As for China buying up everything, sure that is part of the equation, but their demand for oil hasn't gone up 100% in the past 6 months to cause a sudden surge in prices. They along with geopolitics are just the excuse of the month which last year in January was the threat of the Iraq war, in May was the Iraq war, in October was OPEC and Suadi Arabia's bullshit, in January was OPEC and China, and now is China and geopolitics. It's all a bullshit blame game to justify the oligopolistic gouging of the world economy, and only extremely loosely based upon any inflation index known to man other than the inflated greed-thru-monopoly index.

Great article - unfortunately haven't found it online yet, so you get a typed excerpt.

National Geographic - June 2004
The End of Cheap Oil

China too, is learning to drink deep. A decade ago the world's most populous nation sipped oil, its streets choked with bicycles rather than motorized traffic. But last year newly prosperous professionals snapped up over two million cars - up 70 percent over 2002. China may have already leapfrogged Japan to become the world's second largest oil user. By 2005 China could be using 10 million barrels a day, most of which will come from outside its own borders

2002 Oil Consumption (millions of barrels annually)
U.S. 7,191
Japan 1,935
China 1,935
Russia 985
Germany 949

[Eagle3]

Gas prices here have dropped NEARLY 10 CENTS in just the LAST FEW DAYS! What should I do? Should I panic? :scary: It's a crisis! Something is wrong! This is the end! I'm scared! :o


:rolleyes:

You can pay me the difference. Will that make you feel better? :D

[JasmineDreamz]

Yeah, don't worry about it. They'll bounce right back up there again in no time at all. :shrug:

[shotglass]

Another problem is the different formulations required for different regions of the country to adhere to emissions rules. If John Kerry is elected, will he fund research into cars that run on ketchup?

[JBMoney]

(5-22) As for China buying up everything, sure that is part of the equation, but their demand for oil hasn't gone up 100% in the past 6 months to cause a sudden surge in prices. They along with geopolitics are just the excuse of the month which last year in January was the threat of the Iraq war, in May was the Iraq war, in October was OPEC and Suadi Arabia's bullshit, in January was OPEC and China, and now is China and geopolitics. It's all a bullshit blame game to justify the oligopolistic gouging of the world economy, and only extremely loosely based upon any inflation index known to man other than the inflated greed-thru-monopoly index.

http://bushwhacked.net/forum/showthread.php?t=8856

[RicardoHead]

Well JB, you ought to be stoked! Today my local station jacked up their prices 15¢ overfuckingnight to $2.80 for regular unleaded. Now that we are at the inflation-adjusted high can I bitch and whine?

Fucking Bush. I like the guy as a person and prefer him by far to Gore or Kerry, but he's the prez and so he's taking the rap. If I were asked about my opinion of his performance in an opinion poll, I'd call him a pile of shit on the reason of gas prices only. Every week when I fill up I get pissed at him. His opposition said if he's elected we'd be paying out the ass for gas and they were right.

And it ain't China either. From the numbers I saw (need to remember where) even OPEC has increased production to more than offset the additional needs of China in the past 5 years, and global production is at a peak. Truth is every time prices hint at falling someone puts out a scarey report to drive them back up on the fear factor of a supply cut, which keeps a lot of money flowing to those TX oil barons as well as to the shieks Bush needs to pay off to woo cooperation. I wouldn't doubt that those same shieks are pumping up bin laden with funds to keep up the terror thing, because if they give him $100M a year, they get $100B back in return.

It's not a free market, it's a racket.

[RicardoHead]

And it ain't China either. From the numbers I saw (need to remember where) even OPEC has increased production to more than offset the additional needs of China in the past 5 years, and global production is at a peak.
Okay, here are the numbers:
Per CIA.gov (http://www.cia.gov/cia/publications/factbook/geos/ch.html), China uses about 5 million barrels a day, today let's say 6 million.

Opec production in 2002 (http://www.mees.com/Energy_Tables/crude2002.htm) was an average of less than 24 million barrels daily.

Opec production today (http://www.foxnews.com/story/0,2933,164748,00.html) exceeds 30 million barrels a day.

Hence all the BS about the drastically increased prices being due to China are bullshit. The sheer increase in OPEC's output alone more than covers China's total needs, so this whole song and dance really comes down to artificial scare tactics on behalf of Big Oil to "oligopically" maintain extreme prices and fuck us all. Not to mention all those mysteriously planned refinery shutdowns that happen during peak seasons.

So anybody who defends big oil on this is a wanker. That's why Bush is a wanker.

[JBMoney]

Who's defending big oil? But yeah, you're absolutely right. The whole thing is a hoax. The whole China (15.8% increase in oil demand for 2004) and India growth thing is a haxxor prank. There's no way Africa and Asia's demand has more than doubled in the last twenty years. That whole IEA forecast for 2004 of 82.2 million barrels a day ws a typo. Prices will be coming down any day now. You heard it here first.

[Ojive]

Well I’ll agree it is a hoax, I may get a spanking for my comments and so be it. If the liberals would STFU and allow us to use our resources and get free of foreign resources this would be a start. Also the auto manufactures would get off their lazy asses and get more efficient vehicles on the road like yesterday, again another great start. I don't believe in lying down and playing dead, but we the consumers have a role in this as well. Stop being arrogant and quit having to go places!!!! I bet if the majority of the population quit taking weekend trips just to get away, for one-month gas prices would fall because we would have sent a message to the big oil folk. You can't stop living. But just because is costing a lot of folks their lively hoods, example independent truckers. They are by the load. And in fact the golden state had an article not long ago about those drivers parking their rigs because they couldn't make a living due to fuel prices. Even with bio diesel out there not enough places sell it to be worth it. I do travel it is part of my job, but again seeing the necessity of a trip and just doing it is a difference. I still say this we Americans are very narrow minded and would freak completely out if we had to live like people did during WWII times. So until the people get fed up with paying prices at the pump then we can just sit and go for an expensive ride.
I really can't comment on the President, but it is clear he wants other means and those addressed have dragged their feet and continue to stalemate any efforts of relief.

[RicardoHead]

JB I take it you are being facetious.

Point is that every excuse they come up with is bullshit, and like I said every time there is downward pressure on prices some bullshit scarey report pops up to maintain the gouge. There is actually enough oil out there to meet demand and then some, as evidenced by the build in reserves and inventories. The IEA forecasts were met and inventories built, but if you keep enough people afraid enough to bid up prices, the others have no choice but to cough up. It's petro-terrorism (you heard that here first), and Bush is as much a part of it as anyone.

[Ojive]

petro-terrorism- wasn't that in one of the goals of 9/11?

[JBMoney]

Dramatically increasing demand throught China, the rest of Asia, Africa and India is not bullshit.

Government instability and terrorism (Islamic and local rebels) aimed at destroying oil output (suppy) is not bullshit. If not the reality, at least the concern, desire and capability.

To deny that is naive. You seem to want to do that.

And yes, just like any economist would pretty much base a career on, pressures on supply and/or demand... impact price, especially in a speculative market driven by the freely traded, market determined cost of futures.

For every guy that says demand can be met, there's one that says it can't at current growth.

If you want to continue to blame it all on Bush, knock yourself out, I don't really care. If you can't acknowledge basic facts about the increasing demand, and that demand has an effect on prices, then what's the point.

IMHO, GW Bush has very little power over the free market for oil... or the free market for anything for that matter. But whatever, and I'm really sorry that all these folks trading futures haven't acknowledged your wisdom and took a chance on getting a financial ass-raping when China's demand goes up another 10+% for 2005.

Clearly China's not worried about supply, or they'd be trying to buy it up or negotiate special treatment. Oh wait...

If you just want to say it's overpriced, I agree. What isn't?

[Ojive]

That is a real clear point JB, the President did mention to the free world how about a bit of relief, but as you said he has no authority. Yes looking at China and Asia they are booming right now economically. We had some of the cheapest gas in the world besides places in South America. But 10 years ago while working in Australia I was spending around 3 bucks a gallon. So really we haven't gotten beat up too bad as of yet. What is the shocker is our fuel cell capacity, that is a shock. I was getting 15 gallons in my Holden Ute and now I'm pumping 25 gallons in my truck, big difference.

[wrecker05]

Quit blaming the president.RH you seem to be falling into the Democrat mode of blaming Bush for gas prices. Come on.

Drive on.