By on February 25, 2011

Keeping a nervous eye on oil prices? Curious how each increase in the price per barrel translates into price at the pump, and what impact that actually has on consumers? Zerohedge comes through with this handy primer on the real-world consequences of each increase in the price of oil. And what, pray tell, does the “Nomura” note scrawled over the $220/barrel price refer to? Why, the prediction by Nomura Investment Bank analyst Michael Lo, that if Libya and Algeria stop oil production due to unrest, the price of crude will hit $220/barrel. Are you ready to start spending an extra ten percent of your household income on gas?

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83 Comments on “Chart Of The Day: As Oil Goes Up… Edition...”


  • avatar

    Panic in the streets of London… Hang the DJ hang the DJ hang the DJ…

    Seriously though, everyone hurry buy the latest econoboxes, hybrids, and electric cars NOW while supplies last. God forbid we have less money to spend on Starbucks, laptops and big plasma TVs. Hurry! Trade your cars! Because panic… is the American way.

  • avatar
    Canucknucklehead

    I wonder how this will affect SUV sales? Seems everybody has forgotten $4.00 gas.
     
    I haven’t.

  • avatar
    snabster

    Short run vs. long run.
    I don’t think anyone FORGOT about $4 gas.  Plenty of SUVs, especially older ones, were taken off the road. Thank god for the cash for clunkers.
    But in a 2-3 year span, it almost never makes sense to acquire a new car to deal with gasoline prices.
     
    Which again, is why we need a gas tax that has a steady rise — so in 5 years you KNOW we will be paying $6 a gallon.
     
    The problem is how to limit that system so it doesn’t get abused once prices reach that mark.

    • 0 avatar
      MikeAR

      Every time I see one of you gas taxers post the same old crap I say the same thing, if you think you ought to be paying more, write a check and send it to the Treasury. Nothing is stopping you and just think how much more morally superior you will feel.

      http://www.zerohedge.com/article/impact-surging-oil-prices-us-consumer-primer

      Read and study this, maybe you’re capable of admitting you’re wrong afterwards. Juat remember almost every time taxes are raised revenue goes down. You don’t care at all about the people higher prices would hurt, just that you can be morally superior to all those greedy people who want to keep their money.

    • 0 avatar
      charly

      Total gas tax income can only go down if gas taxes go up when gas consumption goes down. Something which is the main purpose of the gas tax so i don’t see the problem. Add the fact that in Europe gas tax is much higher while gas consumption isn’t that much lower so from a budgetary standpoint you are simply wrong

    • 0 avatar
      MikeAR

      So Charly, you say that gas demand is inelastic? It will never go down? There is still a lot of room to cut back in gas usage in this country but you won’t like the results. When people who don’t recognize that unintended consequences exist make laws and policy bad things happen. Raise fuel taxes until they reach some magic number that is ok to you and for a time more money would be collected. But and there is always a but, disposable income of consumers would go down leading to less sales tax revenue, prices would increase across the board, unemployment would go up, social services would be further strained, income tax collections would decline and governments would be forced to look for other sources of revenue-more taxes.

      You think you have all the solutions but you’re not smart enough to realize that nothing occurs in a vacuum. Every action has consequences that go far beyond the those intended. Look at an earlier post I did with a link to Zero Hedge, any increase in oil pricces has a big negative effect on the whole economy. It may not have occurred to you but taxes are taken from people, it doesn’t start out as the government’s money. If you want to pay more, do it, I won’t stop you.

    • 0 avatar
      vbofw

      Jesus, somebody give this guy a hug. Nobody wants to raise gas taxes to add to the U.S. coffers, or to be morally superior.  The argument to raise taxes to incentivize the driver to change their habits.  So the next time they buy a car, they pick the 35 mpg instead of the 20 mpg. Thereby (slowly) cutting payments to the petro dictators who oppress their people.  If you’re worried about not crushing the little guy, phase-in the tax over time, such as saying now, that it’s going up $0.50/gal in both 2014 and 2016.  Yes I know this won’t happen.  Raising taxes in this case is perfectly sound economics, yet political suicide.
       
      I don’t know what I like more about zero hedge, that they have a link to send them cash, that they hock t-shirts, that they use the highly original avatar of “Tyler Durden”, or that their “manifesto” aims to ‘liberate oppressed knowledge’.  Thanks for sending, good stuff.

    • 0 avatar
      MikeAR

      What gives you, a government or anyone else except a parent to incentivize behavior as long as that behavior is legal? Look, you don’t have to agree with me but if you are going to refute something I post at least have something to cite as to why I’m mistaken. If you THINK that a source isn’t valid just because you don’t agree with the arguement, you lose before the game begins. If you can bring something to refute my post, do so, but until then read and learn.

      I will say it again, nothing happens in a vacuum, raise gas taxes then other tax reciepts will drop, for example sales tax. The economy will slow down as increased fuel costs are passed on then unemployment will go up, that causes payroll tax collection to go down and so on until the whole system falls of its own weight.

    • 0 avatar
      John Horner

      It is funny that some people argue that increasing taxes on certain items isn’t an effective way to alter behavior, but that reducing taxes on the wealthy and on businesses is an effective way to alter behavior.
       

    • 0 avatar
      87CE 95PV Type Я

      But Cash for Clunkers also ruined good vehicles.

  • avatar
    jmo

    Everyone still betting GM won’t be able to sell 150k Volts?
     

    • 0 avatar
      Acubra

      Once the gas prices shoot that high, buying a new car will likely become your last priority. Keeping your job and finding enough cash for utility bills and food will.

      But honestly, I would love to be wrong about this…

    • 0 avatar
      jmo

      But honestly, I would love to be wrong about this…
      Well, $220 a barrel oil means gas is $7.70 a gallon.  In Germany today gas is $7.96 a gallon and people still buy new cars and make it to work just fine.

      http://www.aaireland.ie/AA/Motoring-advice/Petrol-Prices.aspx

    • 0 avatar
      Acubra

      I am well familiar with EU prices, thank you. 

      But before showing their prices as an example you have to remember that their infrastructure has been built based on and around short(ish) distances, dense public transport and railway network, as well as historically high gas prices.

      While NA/Canada (excluding the largest cities) are exactly opposite. And the impact will be much more severe.

    • 0 avatar
      jmo

      Acubra,
       
      According to this (I think) car ownership rates are similar between the US and Germany.
       
      http://data.worldbank.org/indicator/IS.VEH.PCAR.P3
       
      The average German drives 9k miles a year vs. 12k in the US.  So, I’m not sure the impact would be that huge.
       
      Now, if you bought a 5,000 sq/ft oil heated house that’s 50 miles from your office and you drive a 10 year old Suburban – well, you’re headed for bankruptcy.  A more typical American should be able to ride it out.

    • 0 avatar
      Acubra

      Statistical average, driven by the large cities populace.
      All these averages are very deceptive thing. It is like a hospital reporting about an average body temperature for all patients.

    • 0 avatar
      Steven02

      On the GM selling 150k Volts thing…
      This would definitely help sell Volts, Leafs, Prius, Cruze, Civic, Corollas, Focus, Fiestas etc etc.  The payments on the car and gas (or energy) could be less than the gas on a paid off vehicle.  It really depends on what people are currently driving.

  • avatar
    chuckR

    I just paid a heating oil bill at $3.37 per gallon. Ouch. Although I’m no fan of pickup trucks and SUVs as used by the vast majority of softhanded suburban commandos, I, ah, sort of have an SUV of a house. Compared to a McMansion, it would be more of a compact CUV, I guess. But my family’s commuting cars average 28mpg.
    Thanks to the greenies who think you can run the world on skittles and unicorn farts, I don’t have a cheap source of clean reliable electric power like nukes. Natural gas hasn’t come my way yet and is still pricey for now. Instead I have the promise of an ever-receding shining future of wind, solar and other renewables. Of course these all need decades of subsidies.
    Heating oil use is about 170 million barrels per year or about 17 days of oil imports, small but significant, especially if you, like me, are breezing out 2 payments per month in a cold winter. At least the Canayjuns should thank us for supporting their Saudi-like lifestyles. JK, JK.

    • 0 avatar
      MoppyMop

      The NIMBY suburban crowd and the oil/coal lobby are at least as much to blame, if not more, for the lack of nuclear power development in the US as the “greenies” (which there are far less of.)

    • 0 avatar
      mikey

      This Canadaian is looking at $4.50 a gallon. It hurts but I can live with it. Others are not so fortunate. Many parts of Canada do not have natural gas service and are paying for heating oil. These are the same folks that have to travel long distances for everything.

      High gas prices have the biggest  impact on those that can least afford it.

      Saudi-like lifestyles?   I hardly think so.

    • 0 avatar
      chuckR

      mikey
      JK = just kidding
      Doesn’t Hydro Quebec make electricity an alternative? BPA in the US Northwest provides power at low rates. BC Hydro is at about 6 cents per kw-hr. Seems to me that would be pretty attractive.

  • avatar
    Jerome10

    Who cared.  #1, this is similar to the guys saying oil would be $200 a bbl at the end of 2008.  WRONG.
     
    #2 I almost guarantee it won’t hit that level.  It just won’t.  Not in the next year.
     
    #3 I don’t think any meddling is warranted.  We’re already hearing people screaming about $100/bbl.  Big freakin wahhhh… Tap into the strategic oil reserve.  Do something!  Tell me why.  And taxing it, or forcing it to go up long term, disagree with too.  Stay out of it.  People will/should learn.  If they don’t, then their loss.  Of course, then they’ll think they need a bailout, which they’ll probably get.
     
     

    • 0 avatar
      aristurtle

      You do realize that the only reason gas prices went down at the end of 2008 was because the global economy collapsed, therefore reducing demand on fuel, right? It was well over $4/gallon in the summer, before our economic shit hit the fan.
      I mean, I don’t think we’ll see it go over $200 per barrel; Algeria and Saudi Arabia are looking stable enough even if Libya and Egypt aren’t. But I’d bet good money on gas prices going over $4.50/gal and staying there.
      “It just can’t! Do something!” isn’t really a convincing argument.

    • 0 avatar
      vbofw

      taxes are the government’s only lever to incentivize people to do something, in this case, consume less foreign oil (while also indirectly pay for roads).  Most big picture thinkers on the right and left seem to agree that more gas taxes are good for everyone (except disproportionately unfair the lowest income workers)

    • 0 avatar
      Dynasty

      There is not enough oil in the strategic reserve to make more than a tiny dent in oil prices for a very short time.  Maybe 2 months worth of oil if all oil imports and domestic production stopped.  At normal levels of being released, it’s not like it would affect the cost of oil more than a few dollars.
       
       
       

  • avatar
    Zackman

    I believe Al Qaeda or Bin Laden himself said $144/bbl oil was the threshold that would kill the U.S. economy. They were right back in the summer of 2008 when it hit $148. If oil goes at least that high or higher, buying gas will be the least of our problems, a moot point. I’m in agreement with Acubra on this.

  • avatar
    geozinger

    I for one have not forgotten 2008 and the $4.25/gallon we were paying for fuel. All of our cars are now 4 cylinder models. We get really pretty good mileage from them. But since 2008, I rarely go for a joy ride of any kind, and fortunately for me, most of the daily stuff I need to do I can do within a ten mile radius of my house. It’s tough on my one kid, as she commutes to university almost everyday. With her university and work schedule, the bus isn’t really an option.
     
    Maybe she can get a scooter…

  • avatar
    cRacK hEaD aLLeY

    Uhm…. time to re-insure the old Honda XL for the year….

  • avatar
    bumpy ii

    Lessee… using about 25 gallons of gas a month, the extra $50-75 would be just noticeable enough to be annoying. Now, the 500 gallons of propane that keep me from freezing to death, yeah that would hurt some.

  • avatar
    aristurtle

    All of you should buy motorcycles. In addition to being awesome, they’re generally better on gas than even the most boring hybrids.

    • 0 avatar
      Acubra

      Absolutely! The brightest suggestion of the day. Will work wonders – especially during winter time. You ride first, my friend. But make sure you have the undertaker expenses accounted for.

    • 0 avatar
      aristurtle

      Winter? That’s what a Ural is for. ;-)

    • 0 avatar
      Acubra

      Ural for winter? Sure! After you manage to start the damn thing… (:
      back in the 70s a relative in Siberia used to have an Izh-Jupiter (another hark-back to pre-WWII German design) with a sidecar. Riding in the sidecar in a mild (for them) -15degC was one of the most horrible experiences, ever. Even with numerous layers of fur coats, sweaters and scarfs – actually being packed like this was part of the misery.

    • 0 avatar
      mcs

      Will work wonders – especially during winter time
      Motorcycles are usable in the winter – even in the snow belt. Once the snow is plowed off of the road and the pavement dries, you’re fine. The road surface is almost as good as it is in the summer. While I don’t currently own a motorcycle, I ride a bicycle with narrow 700×23 tires in the winter. You just have to be extra careful of road sand and pot holes. I also have winter wear that keeps me warm even at 40 mph on downhill runs. It can be done.
       
       

  • avatar
    Engineer

    Is it really that bad? The way the data is presented, incremental cost, makes it look pretty bad. But let’s look at it differently:

    1,300 gal/year @ $3.20 = $4,160 per year for gas. Median annual US household income, according to the US Census Bureau, is a shade under $50,000 (stagnant for the last few). Transportation, @18% would be ~$9,000 a year. Sounds fair.

    So let’s say the Nomura Tsunami hits, and we pay an additional $5,161 a year for gas (hard to believe we won’t at least make some adjustment to our driving, but there it is). We now spend ~$14,200 a year on transportation, or 28% of our income.

    I bet we’ll skimp on entertainment, “other” and even on some “essentials”, like insurance, pensions, etc. to pay for that extra 10%.

    And that’s before we go to the corner office with a “Hey Boss, I was thinking… would it be OK if I telecommute 2 days a week? I can probably get MORE done that way…”

  • avatar
    slance66

    My heating oil expense is always the bigger concern than gasoline.  The last time gas was this high I was shopping for a car.  I foolishly didn’t buy the V8 Volvo XC90 my wife and I loved, which was a bargain (six months later the same car was selling for 8k more).  All because of gas mileage.  Instead we bought a Subaru we ended up not being happy with, which lead to taking a depreciation bath and selling it.  I could have fueled the Volvo for its whole life (even at $4 a gallon) and then some, with the additional expense incurred in those extra transactions.
    Telecommuting is on the rise.  Many big companies see it as a win-win.  While the commuting employee saves gas and also wear and tear and depreciation on his/her vehicle, they also save time.  The employer saves on electricity, water, heat, building costs, maintenance, cleaning staff etc.  Having us drive to a central place to do our work is probably the one thing we could adjust to save the most energy.
     

  • avatar
    Carlson Fan

    It’s all about perspectives. The house we built in 2004 is now worth about 200K less than what we paid for it. So does $5 or $6 a gallon gas scare us? Hardly.

  • avatar
    bd2

    Once again, the oil speculators have come out of the woodwork.

    We all have Phil Gramm to thank for that.

    • 0 avatar
      Engineer

      What? Where? And where have they been since the summer of 2008?

    • 0 avatar
      bd2

      Even they, generally, need a pretext to act – and if you hadn’t noticed, the price of oil was already steadily climbing prior to the turmoil in the Middle East/North Africa.

    • 0 avatar
      Engineer

      I guess I don’t see it that way, bd. These guys can’t be masters of the universe on one hand, able to crank up oil prices single-handedly, and on the other hand require a pre-text.

      More likely the “speculators” just respond to real events. Somedays they make a killing, on others they lose their shirts. Standard Wall Street behaviour, except for the bail outs.
      Likewise the fact that oil prices were climbing before the recent action don’t tell us anything about the role of speculators. It might be a sign that supplies are tight. That’s how the free market is supposed to work, right?
      Seems like anytime anybody mentions the word “recovery” oil jumps $5. That would support the tight supply theory.
      We’ll see. IMHO between here and a world of feasible alternatives lies a forest of high oil prices. The sooner we get in, the sooner we’ll get through it.

    • 0 avatar
      MikeAR

      Actually supplies weren’t tight before prices started heading up. In fact, if I remember right, supplies were higher than they had been in a while. A good part of the reason for prices creeping upward was the weakness of the dollar. The dollar weakens against other currencies and we pay more for the same amount of oil.

    • 0 avatar
      Bimmer

      +1 on speculators. Saudis announced right away when Libyan events unfolded that they will compensate for any lost production, yet oil continued to climb to $103 per barrel, before retreating to $98. In one week it went over $10 per barrel.

  • avatar
    KixStart

    Car-pooling has been trending down for the last decade or two (recent NYT article).

    Car-pooling cuts most expenses associated with transportation (maintenance, depreciation, tires, may reduce insurance), not just the fuel cost.  It’s a huge win, for those willing to tolerate a little bit of inconvenience.  Perhaps we’ll see renewed interest in it.

  • avatar
    bikegoesbaa

    Don’t care.
     
    I live a mile from work, and my income is in no way dependent upon the automotive sector.
     
    I’m 2 miles from the grocery store, 5 miles from big-city recreation, and 20 miles from outdoor recreation.  The roadster gets 30 mpg, the motorcycle is even more fun and gets 50+.  The climate here is warm enough to use either one year-round.  Right now I spend well under 3% of my take-home pay on fuel.  I wouldn’t much care if that number doubled.
     
    The home heat source is a heat pump, powered by coal-derived electricity.
     
    Granted, the whole “societal collapse” aspect could be an issue long term.
     
    But on an individual level, bring it.

    • 0 avatar
      Lumbergh21

      Oil is such a large part of not just the US economy but the world economy, that higher oil prices invariably bring about higher prices in all comodoties.  Even growing corn for ethanol or corn oil requires a considerable amount of crude oil to make the herbicides, pesticides, and fertilizer; power the vehicles that plant and harvest the corn; and power the vehicles that bring it to market.  Just looking around my office, I see crude oil in everything from the carpeting to the fluorescent light fixtures.  The fact that 80%+ of the electricity used in my hometown comes from the nearby hydroelectric project and that I only fill up the car about once every two to three weeks, doesn’t comfort me.  Not only will increased oil prices drive up all of my other expenses, it will effect other people even more causing a geenral impact on the economy and potentially my job.

    • 0 avatar
      bikegoesbaa

      Of course, this is what I was alluding to with the “societal collapse” aspect.
       
      Yes, rising fuel prices have impacts that reach well beyond the pump cost and cost of home heating combustibles.
       
      But I can’t control the cost of corn or the availability of feedstock for plastics production.  I can largely control the degree to which rapid changes in the cost of pump gas and heating oil impact my day to day life and disposable income. I’ve intentionally arranged things such that I am insulated from the retail cost of fuel, so I don’t really care what it costs; at least on a short-term basis.
       
      So yeah, the part where the rising cost of oil causes the system to fail and we all have to resort to cannibalism or some sort of hellish Mad Max existence is still a problem.
       
      The part where “Oh no, I live 40 miles from work and my Suburban gets 11mpg, how will I afford to heat my 3,000 sqf house” is not a problem for me.  Honestly, I sort of look forward to watching H2 Harry weep while he pays $200 for a fillup as a result of his own poor choices.

      I’ll be the guy cheerfully topping off my 4 gallon motorcycle tank every 2-3 weeks.

  • avatar
    jpcavanaugh

    Please allow a bit of nit-picking.  The analysis that says consumers will adjust their use of gasoline if it goes up significantly is correct SO LONG AS we are just talking about an isolated gasoline price issue.  To the extent that there is an inflationary component in the price increase (in other words, gasoline is going up because everything else is going up too) then the corrolation weakens because the actual price of gasoline is not going up quite as fast as it first appears, and consumers will figure this out.

    If we go back to $4/gal gasoline (the kind measured in 2006 dollars) then we will see a big impact in a lot of places.  Chrysler, for example.  But I have a concern that inflation is going to play a bigger part in price increases than a lot of people.  So we will see whether or not I am right.

  • avatar
    Z71_Silvy

    Still can’t wait to get the boat out in a few months…

  • avatar
    highdesertcat

    I’m addicted to gasoline, so I will buy gas no matter what they want for it.  I have read over and over again on different forums that Americans simply do not care what the price of gas/diesel is. Americans may not like the price of gas, but it remains their choice.  They either buy it and drive, or don’t buy it, and walk.  From the past we learn that only a gas SHORTAGE affects the market.  There is no shortage of gas/diesel.  Americans will simply continue to buy the gas, and buy fewer lattes or eat out less often. And if the cost of gas starts to adversely affect the price of goods and the economy, we’ll see the government authorize more drilling in America.  We should have done that ten years ago.  America is swimming in oil, if we only push the environmentalists and agrarians out of the way.  We are an industrialized nation, not an agrarian society!

  • avatar
    don1967

    This has all the trappings of a dead cat bounce that is about to collapse in spectacular fashion: 60% recovery of the 2008 price spike, feverish media, and that giddy, unanimous feeling in the air that prices are about to permanently explode to infinity.
     
    If this is the case, then oil is more likely to hit $40 in the near future than $220.   Peak Oilists might laugh, and call anyone who believes such drivel a knuckle-dragging science-denier.   But then again, it wouldn’t be a bubble if they didn’t.

  • avatar
    AJ

    Won’t Al Gore be thrilled with $7 gal. gas. He’ll continue to ride around in limos while middle America will be riding bikes. Oh wait, that was $5 gal. of gas he was wishing for. ;)

  • avatar
    skor

    Nothing to worry about.  The free market will take care of everything.  Soon the trickle down will start trickling, and we’ll all be back to living in the X-burbs, in our new vinyl clad McMansions located 150 miles (as the crow flies) from our offices.  We’ll all be driving brand new Suburbans and Navigators to work that have Cooper Minis attached to the back in the place of a spare tires because Americans don’t do lug nuts anymore.  Yeah, I’m so confident, I slapped down 5% on my new crib out in the planned community of Particle Board Estates.  That place is great, they built a new shrine to Our Lady of the Austrian School.  On Sundays everyone goes off to services led by Rev. Mush Limpblow and we worship our gods and goddesses, Ayn Rand, Ann Coulter, Friedrich von Hayek, and Ludwig von Mises

    • 0 avatar
      MikeAR

      You feel better now? Feel superior to everyone who iasn’t just like you now? You like showing off just how smart you are? Well sorry, you’re not. You can’t argue based on facts so you resort to childish slurs. Come with facts not snark and you’ll contribute something.

    • 0 avatar
      mikey

       I’m not really up on my right wing spokespeople here. So Ayn Rand is the girl that wrote something about Atlas? The dude hoding the world,right?

       Ann Coulter is the skinny blonde that sounds like Glenn Beck,or is it Jeff Beck?

      And the chubby guy that thinks Michelle Obama is fat?  Is that the same guy that guy that kinda faded away during the George W era?

    • 0 avatar

      I’m not really up on my right wing spokespeople here. So Ayn Rand is the girl that wrote something about Atlas?

      <<shrug>>

  • avatar
    ExPatBrit

    When does the “Free Market” start,  is it one of those spring-fall things like the farmers market?
    Would hate to miss it!
    And you upset MikeAR again, you naughty, naughty  boy.
     
     

  • avatar
    mike978

    We wouldn`t want to upset MikeAR would we!!
    A gas tax is a much better idea than CAFE. The free market case is you pay to play, if I want a Camaro ZL1 and I can afford to pay for the fuel – my choice then great. CAFE will make this car extinct in years to come. Also as a nice side effect we get more and better roads.
     
    It is stupid that the gas tax has stayed at the same low level (16 or 18c isn`t it) for 15+ years. Road construction/maintenance has increased greatly in that time. Thereby condemning us to crappy roads.

    • 0 avatar
      skor

      Taxes to pay for roads!  Are you some kind of commie, atheist, pre-vert?  All roads should be sold off to the highest bidder……even the street in front of your house.  At that point, you’ll negotiate a fee for using said roads with the new businessmen owners.  Free market in action. If you can’t pay, too bad, get a helicopter.

  • avatar
    Acubra

    Judging by the latest additions to the discussion – looks like a door was left open in some underages’ asylum in Berkley.

    • 0 avatar
      MikeAR

      Yeah but they have lots of self esteem. They aren’t kids, really they’re adults that never matured beyond freshman year in college. They have all the answers and anyone who doesn’t agree with them is not only wrong but stupid and evil. Let them run things and all the problems would magically go away because they are so much smarter than anyone who has come before them. They are annoying but really should be pitied for being so mentally constipated.

    • 0 avatar
      John Horner

      When one can’t argue the facts, attack the person.
       

  • avatar

    Seems like those who say speculators of oil prices are the problem when in all actuality every little action down to deciding a shorter route to work or a sunday drive or even a comment on TTAC over oil prices is, in a sense, speculative by our very decisions and actions. Oil effects everything more than any other commodity, regardless that it’s a limited resource or not. There is no alternative product that uses an alternative fuel source that in some way does not use oil, be it production, shipment, or regenerating said product. The matter of the fact is we live in a global economy that is bound by oil regardless of the item that uses or used it at one time or another. Prices will go through cycles, as they have in the past, but will carry on increasing gradually over the long term. American’s have gotten used to cheap gas for a century now, maybe it is time we come to the realization of high prices for oil that other countries have before us.
    At least there is the possibility the U.S. market could finally embrace all those fun diesel hatchbacks from Europe?
    Sorry for the ramble. It’s 3 AM, the wife is asleep, the TV is muted, and I got nothing better to do than ramble about the global market/supply and demand of crude oil.

    • 0 avatar
      skor

      Gas in America is cheap because gas taxes in America are some of the lowest in the world. But, yeah, those people in that U-rupp place that ain’t ‘Merica are all a bunch of commie socialists, so screw ‘em.
       
      I agree with you, however, that ultimately this is the fault of the average American.  For decades now Americans have voluntarily subjected themselves to the deprivations of the corporate kleptocracy that would have made even the most pitiful of third world peasants rise up in murderous fury. Even a backward, illiterate Libyan knows on which side his bread is buttered.

    • 0 avatar
      MikeAR

      Skor, don’t use big words until you are positive what they mean and how they are spelled. You mean depredation not deprivation. Deprivation’s root word is deprive, that really doesn’t make sense in your sentence. By the way, your rants are repetitive and tiresome. We know you hate this country and are envious of the rest of the world because they have it so good so move to Libya and try it out there. Maybe you’ll find happiness finally. And take a dictionary with you so you can learn the difference between depredation and deprivation.

    • 0 avatar
      skor

      Yup, my English is slipping.  For the last two years I’ve been concentrating on the language of the future, Mandarin.
       
      Here’s an example: MikeAR pìyǎn.

    • 0 avatar
      MikeAR

      So skor you called me an a–hole because I called you out for your illiteracy. If you aren’t a native English speaker then I apologize for pointing out your misuse of the language. It is a complex language and everyone makes mistakes. But if you are a native speaker then guess you aren’t quite as smart as you thought. 

  • avatar
    cheezeweggie

    Now that the prosperity that Americans were promised has “trickled down” to us, you can eat your SUV and your overvalued cardboard suburban Mc Mansions.

  • avatar
    calvin1234

    I traded my full sized Chrysler in for a Ford Focus that gets 38 MPG (HWY) during C4C. Let gas go to $7. It won’t change how I drive. Many people could foresee that as the world economy improved (and as well as other factors, like political turmoil) gas would go up, so I took their advice and bought a car that won’t break the bank going to work.

    • 0 avatar
      ExPatBrit

      We started downsizing our cars several years ago , no V8 two small V6s and and one 4 cylinder. Only one of the  V6′s is used for a very short commute.
      I know several people who purchased larger vehicles to commute (one only about a month ago)  despite obvious indications that this was not a good idea.
      I have zero sympathy for anyone who  bought a gas guzzler in the last 2 years and now complains about gas prices.People who commute in large vehicles like that because they tow a boat or RV once or twice a year are stupid.
       

  • avatar
    MrBostn

    I wonder when the old “telecommute” discussion will begin. As an IT consultant, I (along with most other IT consultants) can setup any employee to work from home as if they were in the office. Drives mapped, email, even a phone extension that can transfer to/from.

    I’ve  rarely never encountered a business owner or C-level exec that embraces telecommuting. They all want “face time”

    Imagine how much less office space you would need if 25% of your workforce didn’t need a cube/office.

    • 0 avatar
      John Horner

      Telecommuting has actually been growing at a steady pace. For some reason, the new trendy word for this is “telework”. It is estimated that about 45 million people in the US telework at least one day per week. Considering that the total number of non farm workers in the US is around 140 million, that 45 million is a huge number already. Here in Silicon Valley, working from home one or more days per week is very, very common.

      http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/22/BUEC1087U5.DTL

  • avatar
    Andy D

    heh  heh I  hope  this  drives  down  the costs  of  used  4x4s. I’m looking  to  replace  my  Grand Wagoneer.

  • avatar
    Mike Kelley

    Yeah, I should buy a motorcycle to drive to work, even in winter, and the government is fighting “global warming” by actively preventing energy production in the US: http://thehill.com/blogs/e2-wire/677-e2-wire/146205-interior-officials-wont-offer-timeline-for-issuing-offshore-drilling-permits Well, yesterday it was -16 degrees F. when I got to work 15 miles away, not counting the wind.  It has been this cold off and on since November. Any politician who is not keenly interested in increasing energy production in this country will never get a vote from me.

  • avatar
    JustPassinThru

    Auto gas mileage, and the price at the pump, are the least of this.
     
    It’s the cost of ENERGY.  Not gasoline per se, but ENERGY.  Oil, specifically, although coal and natural gas are being put through the same regulatory cut-off procedures.
     
    You can OUTLAW personal automobiles, and energy use in this country will drop less than ten percent.  You can tax gasoline, and mandate stupid SMART cars, and the savings is less than four percent.
     
    Everything you need or buy, has oil factored in as a large part of its price.  It’s manufactured or processed; warehoused, shipped by oil-burning devices, then stocked in heated/cooled stores for you to pick up.
     
    Whether you go there and back by car, taxi or (five-mile-a-gallon) bus.
     
    This is going to be a MAJOR cost of living increase, even for pedestrians.  The cost of gas is just going to be the up-close-and-personal part of it.

  • avatar
    JustPassinThru

    …and why the price hikes?  What keeps prices in check, in general?
     
    COMPETITION.  Long ago, IBM was making a killing on a new device which didn’t cost much to make and was very useful.  Other people saw that and wanted in; and in no time at all, there were a thousand companies, big and small, making PCs.

    And the price of a PC went from over $3000 to under $250, even as performance increased a hundredfold.
     
    Right now virtually all oil comes from politically-unstable regions of the world; and much of that world is on fire with revolution.  So the world price of oil, already dictated, is blowing off the scales.
     
    There is only one way to answer that.  FIND OTHER SUPPLIES.  You know, the kind that our government has placed off-limits.
     
    More supply -> reduced price.  It’s ECON 101.

  • avatar
    Mike Kelley

    Bingo, JustPassinThru.  Our new legislature up in Helena is trying to open up resources that had been made off limits by the previous Democrat bunch.  I would love to see Montana start producing oil and gas like neighboring North Dakota is.  I know  a few working class folks from here that are over in North Dakota making good money right now, and it is stupid to have prevented the same thing here.  Elections matter.


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