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User Name Thread Name Subject Posted
Chief Chaos BS: Am I the only one stunned by oil prices? (117* d) RE: BS: Am I the only one stunned by oil prices? 09 May 08

Okay lets tackle this one piece at a time

1. Supply and Demand - Not a bad thing when you're talking about things that people want but don't truly need and there is a finite resource. However when everyone needs it... Also there is the very real fact that when you control the supply you can decrease the supply thus increasing the demand. Alot of people will rebel against the idea of gov't caps on earnings/costs but I think it's time to get this under control because it is really hurting the economy!

To the point of controlling the supply, I'd like to point out that the supply of crude is not the problem here. Plenty of it out there (for now). The problem is that there has not been a new refinery built in the U.S. (not sure about world wide) for a couple of decades now. Couple that with a few of the existing ones being retired and a growth in demand over the intervening two decades and you can see what's happening. The oil companies have also just recently begun shutting down whole refineries for maintenance instead of just decreasing production in the area where maintenance is being conducted. The news the other day stated that the refineries are also only working at 80% capacity.

Then you do have OPEC and the other conglomerates not increasing production when we do know that they reduced it to drive up prices a few years back.

About a decade ago I was conducting a vessel inspection at a Hess tank farm and spoke to a tankerman about the price of oil and gasoline. He told me plainly that the "oil crisis" of the late 70's was caused by the companies working together. They would allow the oil tankers to sit off shore until the price rose to what they wanted and then they'd sail them in.

It's way past time to make our houses more fuel efficient with insulation and high efficiency appliances. We're going to have to learn to reduce consumption. The only problem is that as I've already pointed out, they'll just cut production to keep the prices high.

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