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goose
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It is also valid to point out there are untapped wells that the oil companies are not using so they can drive up the price of gas for their profit. They are the bad actors in this, it is in their best interests to make more money. Direct your anger at them.

 

Presumably the oil companies weren’t tapping those wells before the huge spike in prices and were greedy prior to 14 months ago, no?

The USA was cranking out oil recently to the tune of being just above profitable. $35 -$60 a barrel. That all changed about a year ago. I’m not looking at Dallas and OKC to blame but gazing at Washington DC.

 

Tulsa and Houston are the oil centers, but yeah, the prices have been way up since last Thanksgiving.

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I promise that there is nothing superior about the UK fuel that justifies the 100% extra we pay.

 

We also need desperately to find another way of accessing fuel for vehicles, and oddly enough, I don`t think the government is on track to provide enough charging points for electric vehicles and none of that addresses the stunning cost of electricity and cost of production etc.

 

The cost of living increases could end up costing more lives and with more damaging long-term health consequences than Covid.

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One irony about the debate I've been hearing is that, on the one hand, people say (rightly) that you can't increase oil mining and petroleum processing overnight. But, on the other hand, you have some of the same people saying that we should just transition to "green," energy, which also can't happen overnight.
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It is also valid to point out there are untapped wells that the oil companies are not using so they can drive up the price of gas for their profit. They are the bad actors in this, it is in their best interests to make more money. Direct your anger at them.

 

I wonder if the people who follow the "let the market decide" paradigm complain about prices?

 

Why wouldn’t they? The increased prices are largely a result of government interventions and actions. When the government distorts the market, it’s not much use to say the problem is because of the market.

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After it's all said and done, the oil companies and their stockholders get rich, while the consumer takes it in the ass. Plus ca change.
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Onalaska, Wisconsin

 

$4.099 for unleaded 87

$4.069 for unleaded 88

 

I consider myself very lucky. :)

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Speedway at 4.19 here. I don't even look at major brands, figure minimum 5 cents/gallon more.

Open the Keystone pipeline and other American sources, Clueless Joe.

Bwahaha, spoke too soon. Up to $4.39.
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One irony about the debate I've been hearing is that, on the one hand, people say (rightly) that you can't increase oil mining and petroleum processing overnight. But, on the other hand, you have some of the same people saying that we should just transition to "green," energy, which also can't happen overnight.

Or in a decade
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It is also valid to point out there are untapped wells that the oil companies are not using so they can drive up the price of gas for their profit. They are the bad actors in this, it is in their best interests to make more money. Direct your anger at them.

 

Presumably the oil companies weren’t tapping those wells before the huge spike in prices and were greedy prior to 14 months ago, no?

For some perspective:

 

Rising crude oil prices and increased gasoline demand contributed to the average U.S. retail price for regular grade gasoline increasing to $3.01 per gallon (gal) in 2021, the highest average nominal price since 2014. The average price for retail gasoline increased by more than $1.00/gal between the start and the end of 2021.

 

One major contributor to the high retail gasoline prices was high crude oil prices. Crude oil prices in 2021 increased throughout most of the year, and the average crude oil price for 2021 was the highest price since 2018.

 

Other factors contributing to higher retail gasoline prices in 2021 include higher demand for gasoline, reduced U.S. refinery capacity, and low gasoline inventories https://www.eia.gov/todayinenergy/detail.php?id=50758

 

After everyone sat home and did less driving our inventories were low. Demand returned but things couldn't start up immediately as someone else quoted here. It always makes me wonder why Americans are so quick to complain and blame the government when the industry reacts to the current situations. There was also a cyber attack at Colonial Pipeline which reduced capacity even more. Let's face it, we are spoiled and expect to have what we want when we want it and cheap too. After coming out of a pandemic with things shut down, it was unrealistic to expect things to remain as they were before.

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After it's all said and done, the oil companies and their stockholders get rich, while the consumer takes it in the ass. Plus ca change.

Anyone who thinks this is all because of policy/politicians is naïve as hell. This is being used as an excuse to gouge the fukk out of us as well.

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After everyone sat home and did less driving our inventories were low. Demand returned but things couldn't start up immediately as someone else quoted here. It always makes me wonder why Americans are so quick to complain and blame the government when the industry reacts to the current situations.

IMO, people want things black & white. The left wants to blame the right, the right wants to blame the left, white people want to blame people of color, people of color want to blame white people, country people want to blame city folks and vice versa etc. Nuance and shades of gray are either beyond the grasp of the average person or they're just so pre-conceived/entrenched in their thinking as to not be capable of or interested in even try to look at the whole picture.

Edited by driventotheedge
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After it's all said and done, the oil companies and their stockholders get rich, while the consumer takes it in the ass. Plus ca change.

Anyone who thinks this is all because of policy/politicians is naïve as hell. This is being used as an excuse to gouge the fukk out of us as well.

Corporate actions, motivated by a desire to maximize profit, are always a factor. My original question, though, was in regards to deliberate decisions that move energy dependence away from profit-driven domestic corporations (which brings its own problems) toward a dependence on bad actor nations like Russia, Iran or the Saudis. To me that's the key philosophical question being put to the test right now.
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Paying $4.22 for regular gas today. One has to question the wisdom of rejecting energy independence in favor of depending on the globe's bad actor nations for our energy needs. :blink:

 

Lots of people think Old Joe did that but lots of people don't understand how the economy works too.

 

joe-gets-stuff-done-barack-obama.gif

 

Or gas prices for that matter. No president, left or right, controls them. Dubya, Obama, Trump, Biden...doesn't matter.

We're not pretending that energy policy doesn't have a massive impact on supply, are we?

 

It probably does to some extent but has that changed in the last 36 hours to cause gasoline prices to literally go up 45 cents or more in some places?

No, what's happened is that the cumulation of bad energy policies coupled with world events have precipitated a historic spike in crude oil. Better energy policies would have made the spike less severe. Edited by workingcinderellaman
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As with most economic issues, I tend look first to the simple issue of supply vs. demand. If prices are going up, it's because there isn't enough of something to meet how much people want. Regardless of how much a seller wants to get for a product, it can't get more than people will voluntarily pay for it (simple, I know). The seller is only in control of that if the seller controls the supply. If I'm the only Dunkin' Donuts within 500 miles, you're paying my prices if you want Dunkin' Donuts or you're going without. But if there are 40 Dunkin' Donuts within 5 miles, then I have to come up with some way to earn your business, most easily by dropping my prices. When the government enacts policies that contribute to limits on supply of something, it helps sellers control supply unnaturally. So, yes, an increase in demand attributable to coming out of COVID lockdowns makes sense. But the government also exacerbated that by restricting fracking, refusing to grant drilling leases on federal land, etc.

 

The government has a duty to make sure that the only 2 cable companies in an area don't conspire to drive up prices. But if, as here, it decided, before the war in Ukraine, that it wanted to pursue a more robust environmentalist agenda, which is within its power, it should be honest enough to admit that some of its policies are making the situation worse.

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After everyone sat home and did less driving our inventories were low. Demand returned but things couldn't start up immediately as someone else quoted here. It always makes me wonder why Americans are so quick to complain and blame the government when the industry reacts to the current situations.

IMO, people want things black & white.

I disagree. Politicians want things black and white. Info-tainment sources want things black and white. A simplistic framework maximizes power and profitability.

 

When presented with an opportunity to examine with nuance, I find most people prefer it. Those conversations just don't make the news or the meme circuit

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After everyone sat home and did less driving our inventories were low. Demand returned but things couldn't start up immediately as someone else quoted here.

 

Indeed The effect of this ought not to be understated.

 

Demand dropped due to COVID and production followed suit. That's the exact order you'd expect. Now that demand has returned, production needs to catch up, and until it does, the disparity between demand and production will be a factor in cost to consumer.

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As with most economic issues, I tend look first to the simple issue of supply vs. demand. If prices are going up, it's because there isn't enough of something to meet how much people want. Regardless of how much a seller wants to get for a product, it can't get more than people will voluntarily pay for it (simple, I know). The seller is only in control of that if the seller controls the supply. If I'm the only Dunkin' Donuts within 500 miles, you're paying my prices if you want Dunkin' Donuts or you're going without. But if there are 40 Dunkin' Donuts within 5 miles, then I have to come up with some way to earn your business, most easily by dropping my prices. When the government enacts policies that contribute to limits on supply of something, it helps sellers control supply unnaturally. So, yes, an increase in demand attributable to coming out of COVID lockdowns makes sense. But the government also exacerbated that by restricting fracking, refusing to grant drilling leases on federal land, etc.

 

The government has a duty to make sure that the only 2 cable companies in an area don't conspire to drive up prices. But if, as here, it decided, before the war in Ukraine, that it wanted to pursue a more robust environmentalist agenda, which is within its power, it should be honest enough to admit that some of its policies are making the situation worse.

Another thing to consider is the ability of the market to adapt under different conditions. For example, if companies have equipment, permits, employees, etc., in place working a fracking well but they're only producing at 50% then if a spike occurs, they can easily increase production. If they don't have those things in place then it may take years to do it. If Canada can increase their oil drilling production in remote areas, but have no way to move it, then their production increase is limited until they have a pipeline or road built to move the oil which could take years.
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As with most economic issues, I tend look first to the simple issue of supply vs. demand. If prices are going up, it's because there isn't enough of something to meet how much people want. Regardless of how much a seller wants to get for a product, it can't get more than people will voluntarily pay for it (simple, I know). The seller is only in control of that if the seller controls the supply. If I'm the only Dunkin' Donuts within 500 miles, you're paying my prices if you want Dunkin' Donuts or you're going without. But if there are 40 Dunkin' Donuts within 5 miles, then I have to come up with some way to earn your business, most easily by dropping my prices. When the government enacts policies that contribute to limits on supply of something, it helps sellers control supply unnaturally. So, yes, an increase in demand attributable to coming out of COVID lockdowns makes sense. But the government also exacerbated that by restricting fracking, refusing to grant drilling leases on federal land, etc.

 

The government has a duty to make sure that the only 2 cable companies in an area don't conspire to drive up prices. But if, as here, it decided, before the war in Ukraine, that it wanted to pursue a more robust environmentalist agenda, which is within its power, it should be honest enough to admit that some of its policies are making the situation worse.

Another thing to consider is the ability of the market to adapt under different conditions. For example, if companies have equipment, permits, employees, etc., in place working a fracking well but they're only producing at 50% then if a spike occurs, they can easily increase production. If they don't have those things in place then it may take years to do it. If Canada can increase their oil drilling production in remote areas, but have no way to move it, then their production increase is limited until they have a pipeline or road built to move the oil which could take years.

 

Yup. Logistics networks, infrastructure, and architecture are all part of the "supply" half of the "supply and demand" relationship.

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This conversation reminds me a lot of when just a few years ago people were trying to tell me the economy wasn't really better. That what I was experiencing and seeing in the numbers wasn't real. I'm out.
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It is also valid to point out there are untapped wells that the oil companies are not using so they can drive up the price of gas for their profit. They are the bad actors in this, it is in their best interests to make more money. Direct your anger at them.

 

Presumably the oil companies weren’t tapping those wells before the huge spike in prices and were greedy prior to 14 months ago, no?

For some perspective:

 

Rising crude oil prices and increased gasoline demand contributed to the average U.S. retail price for regular grade gasoline increasing to $3.01 per gallon (gal) in 2021, the highest average nominal price since 2014. The average price for retail gasoline increased by more than $1.00/gal between the start and the end of 2021.

 

One major contributor to the high retail gasoline prices was high crude oil prices. Crude oil prices in 2021 increased throughout most of the year, and the average crude oil price for 2021 was the highest price since 2018.

 

Other factors contributing to higher retail gasoline prices in 2021 include higher demand for gasoline, reduced U.S. refinery capacity, and low gasoline inventories https://www.eia.gov/...il.php?id=50758

 

After everyone sat home and did less driving our inventories were low. Demand returned but things couldn't start up immediately as someone else quoted here. It always makes me wonder why Americans are so quick to complain and blame the government when the industry reacts to the current situations. There was also a cyber attack at Colonial Pipeline which reduced capacity even more. Let's face it, we are spoiled and expect to have what we want when we want it and cheap too. After coming out of a pandemic with things shut down, it was unrealistic to expect things to remain as they were before.

 

Well, that was sure a fast 180! So now it’s not due to untapped oil wells and corporate greed, but higher demand and and lower supply. Of course that is true from a basic economics standpoint. But when the government artificially reduces demand and incentivizes a reduction of supply, and then later lifts the policies artificially reducing demand, this is all to be expected, no? Certainly virtually every economist I saw had been predicting a “v” shaped recovery since the economy was kicked in the nuts 2 years ago. Yet, for some reason, the government did its best to disincentivize oil production. Of course there are many factors and nuance here, but the government can only control what it can control, and what it controlled it screwed up about as much as it could.

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Onalaska, Wisconsin

 

$4.099 for unleaded 87

$4.069 for unleaded 88

 

I consider myself very lucky. :)

And diesel is over $5.00 in your state. :rage: My Sierra will be sitting quite a bit.
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Regarding oil companies not properly expanding their production of petroleum:

 

Imagine you own a coffee shop in your town. Business goes pretty well, and you contemplate opening a second location on the other side of town. Now imagine your mayor very publicly says he or she is going to do everything in their power to make conditions such that people buy less and less coffee until no one buys it all, and the mayor takes very obvious steps to accomplish that goal. How does that second location look to you?

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Regarding oil companies not properly expanding their production of petroleum:

 

Imagine you own a coffee shop in your town. Business goes pretty well, and you contemplate opening a second location on the other side of town. Now imagine your mayor very publicly says he or she is going to do everything in their power to make conditions such that people buy less and less coffee until no one buys it all, and the mayor takes very obvious steps to accomplish that goal. How does that second location look to you?

Exactly. Successful businesses are usually hedging against future economic conditions. Politicians not so much.
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It's all well and good to say we should just ramp up production, environment be damned. Many of our choices are not so good for the environment, Keystone pipeline is a prime example. Tar sands oil is filthy and even worse for pollution, once it spills it is next to impossible to clean up. It was a good thing to stop that project for all the damage it could have done. The small economic returns were not worth it. Even if it had been built, it wouldn't be making a dent in our situation today.

 

I don't like higher prices anymore than the next person but we aren't in the situation like the 70's. No rationing or gas lines down the street. I get that people are upset after 2 years of having their lives disrupted but we need to be willing to ride this out as hard as it may be. I just think of the people running for their lives in Ukraine and me having to pay more for gas and shipping costs doesn't seem so bad.

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Just read this:

 

Yousef Al Otaiba, the UAE ambassador in the United States, told CNN his country favors an oil output hike. It was the first indication from a member of the OPEC+ cartel of oil producers that a supply increase beyond what was agreed by the group could be considered. OPEC+ had refused to budge from its current plan to gradually ramp up output.

 

Good news?

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