FUEL: Suppy and Demand

[burrpenick]

I was depressed watching the national news last night hearing that crude oil hit $130+ a barrell. I was wondering what this is going to do to our hobby? I have never driven my old Mopars long distances or used them for regular commuting, but will the value go down as the price of fuel increases? I used to think of them as not only fun, but a decent investment.....don't know if that will continue to be the case?

[cudadave72]

here what I think!!

[DAYTONA]

...I remember putting gas in my new 73 CUDA at .19 cents a gallon (gas wars in Texas), then almost overnight it went to .50 cents....swore I wouldn't drive my CUDA anymore if it went that high...even at $4. per gallon, gas is cheaper today percentage wise for me than it was in 1973 at .50 cents....it may affect the new GAS GUZZLERS trade in values, but it won't affect the prices of the classics

[Cuda Cody]

Our weak dollar isn't helping at all! 

I can remember back when it was a big deal when a barrel hit the $100 mark.... wasn't that just last month! 

[asm74]

The 100 mark was a red herring.  It didn't mean anything, most suppliers thought it was about time, and that barrels were worth more than that a while ago. 

The thing that KILLS me about this is that the price increases are all SPECULATIVE.  Meaning that this price increase is based on a FUTURE prediction of oil supply availability against demand.  The IEA, international energy agency, is now predicting an oil supply shortfall as early as 2030.  That figure is based on new data from major oil supplier's current fields directly, and came as much as a surprise to them as it does to the American consumer's wallet.  And one of the hardest hit segments is going to be commercial/industrial diesel which, and I just learned this today, requires a rarer "sweeter" quality of crude than most of us consume.


 

[Moparal]

And one of the hardest hit segments is going to be commercial/industrial diesel which, and I just learned this today, requires a rarer "sweeter" quality of crude than most of us consume.

What do you mean?  Low sulphur?

[asm74]

yes.  less that 0.5% sulfur content.

[Moparal]

yes.  less that 0.5% sulfur content.

Well isnt that funny.   I was working at a BP oil refinery in Northern Washington a few years ago doing an emergency job for them. I was in Tampa at the time.  BP was just building the system that produces that stuff. It had cost them 7 mil to build.  I had heard it straight from the horses mouth. Now 2 yrs ago I get called back in to do another unit, and I ask about the system. They had told me that it paid for itself, the whole project in 1 month and the proffit it makes is 3 million or more a day. That was back then.  I get around the nation on a regular basis. And ask my share of questions. Don't believe all you read about in the papers or news.  Some companies struggle to survive (and not oil) and some are killing the market.

[Aussie Challenger]

Well isnt that funny.   I was working at a BP oil refinery in Northern Washington a few years ago doing an emergency job for them. I was in Tampa at the time.  BP was just building the system that produces that stuff. It had cost them 7 mil to build......  Don't believe all you read about in the papers or news.  Some companies struggle to survive (and not oil) and some are killing the market.

 
  Right on, don't forget the newspapers moto, "Don't let the truth get in the way of a good storey"   
  Governments and these companies make toooo much money from what is called "liquid gold", they will do what ever it takes to keep the dollars flowing into their pockets.      

[MJS73]

Governments and these companies make toooo much money from what is called "liquid gold"

Governments and oil companies don't set the price of a barrel of crude.  I'm always amazed at the thought process that says a gas station should sell gas at the same price when crude is at $130/barrel as when it was $60/barrel.
 

they will do what ever it takes to keep the dollars flowing into their pockets.

Doesn't any business?  And for that matter, don't you?  Do you tell your employer to stop paying you once your monthly bills are paid?  Do you refuse raises?

Mike

[cudadave72]

Governments and oil companies don't set the price of a barrel of crude.  I'm always amazed at the thought process that says a gas station should sell gas at the same price when crude is at $130/barrel as when it was $60/barrel.
 
Doesn't any business?  And for that matter, don't you?  Do you tell your employer to stop paying you once your monthly bills are paid?  Do you refuse raises?

Mike

Ok Mike heres my view. I run a small business which I'll add is being heavily effected by the fuel prices/economy. So say I wake up this morning and decide I want to make more money so I double the price of my services and then next year I decide its time to go up another 60 to 75% while the consumers that I service are making the same amount of money. First off I would not make it through the first increase let alone the second. The oil companies are all about greed what ever the level of involvement may be political or otherwise. There are tons of arguements but the truth is that we have plenty of resources here in the US that are not being used allowing the overseas companies to do as they please. This is a multi level problem which involves several sources from Wall Street to foreign governments. This discussion could go on for days. Its my view that its not fair to be able to nearly triple prices in two years, criple an economy and still make record making profits without some sort of regulation. No one else can do that! And dont get me started on what a crock of crap it is about diesel prices. It is still the least refined of any fuel but since it drives our economy (ie.. trucking and any heavy machinery) it is yet the most expensive. It was only a few years ago that diesel was the least expensive. It sound like you financially secure enough to pay what ever for gas but for many of use an extra $4 to $500 dollars a month in fuel cost (based on a two car family) is crippling to say the least. When the Presidential election is over I expect things are going to change!!

[MJS73]

So say I wake up this morning and decide I want to make more money so I double the price of my services and then next year I decide its time to go up another 60 to 75% while the consumers that I service are making the same amount of money....its my view that its not fair to be able to nearly triple prices in two years, criple an economy and still make record making profits without some sort of regulation.

Gas prices have not doubled year over year.  Gas was not $1/gallon two years ago.

It sound like you financially secure enough to pay what ever for gas but for many of use an extra $4 to $500 dollars a month in fuel cost (based on a two car family) is crippling to say the least.

I'm saying I am, but whether or not I am is irrelevant.  Crude oil prices are market-controlled and, as such, pricing will be volatile.

When the Presidential election is over I expect things are going to change!!

No president or congressman can control market forces, not can they curb the increased demand from China and India.  And I don't believe that any president or congressman has the skills to formulate a solution.  Government has created far more problems than it has solved, so I wouldn't hold your breath waiting for the knight in shining armor.  All they seem to be able to come up with are price caps (which have never worked) and unrealistic CAFE standards.

Mike

[cudadave72]

Price of gas here has over doubled in the last 2 years and is going up every week. I think that justiflies my logic.
Keep in mind I'm not tring to make this personal but I think the majority will agree that something has to be done and there are ways to do it. My understanding of your post was that it should be OK for the oil companies to make what ever they want. When a product effects EVERYONE the way gas does it should be strictly regulated the same as other public companies such as power companies are.

[MJS73]

Price of gas here has over doubled in the last 2 years

My statement was "doubled year over year"

I think the majority will agree that something has to be done and there are ways to do it.

That everyone wants to do something doesn't mean it's the right thing to do.  The majority can be wrong.  Jimmy Carter was elected by the majority, wasn't he?

When a product effects EVERYONE the way gas does it should be strictly regulated the same as other public companies such as power companies are.

So should food, water, health care, housing, clothing, cars and internet access, all of which are equally or more important than gasoline.

should be strictly regulated the same as other public companies such as power companies are.

No one complains that their utility bills are too high and the utility companies are ripping them off?

Mike

[cudadave72]

Sorry Mike I didnt take debate in school. You win! Like I stated earlier this kind of dicussion could go on for days. Thanks for setting me straight. Your trophy is in the mail!!!