What is Digg?68 Comments
- vondrak, on 11/02/2009, -0/+29What doesn't make gas prices go up?
- AlaskaLoneWolf, on 11/02/2009, -2/+20Here's what I don't fvcking get... in Alaska, a place where we pump this sh!t out of the ground, the price is the highest in the United States. Can anyone explain that to me?
- TLNEditor, on 11/02/2009, -0/+15Save your permanent fund checks and build a refinery.
- monodelasno, on 11/02/2009, -1/+13Driven by market speculation again. The US inventory is well above average, in fact there is an estimated 125 million barrels of crude simply sitting in tankers with no where to put it.
- AngryDeuce, on 11/02/2009, -1/+13According to my mother, whose lived in Fairbanks for for quite a while now, the bulk of the crude oil that we pump out of the ground in AK is actually sold for use outside of the country. Don't ask me why, it's totally retarded...but the proceeds from that sale are where the APFD (Alaska Permanent Fund Dividend) checks come from.
They could probably keep the oil here in the U.S., but that would eliminate the $1200-$1400 per person checks every year, and from what my mother tells me a lot of families depend on that money literally for their survival in the winter months... - edstate, on 11/02/2009, -1/+13The "weak dollar policy" is an actual policy. There are benefits to both a weak, strong, and neutral dollar. Depending on who you ask. One main thing the Weak Dollar helps is our exports, which are few and far between, save for our tech industry. One main thing it hurts is our import purchasing power. Our cheap Chinese toys aren't so cheap anymore. But some things are a bit more complicated, like this.
Economics is friggin interesting, to say the least. - Bloodwine, on 11/02/2009, -0/+10So the media is actually starting to mention speculation is one of the reasons why crude oil is trading higher than it should be, and was a large reason for the $150/barrel oil pre-recession?
I hope that shuts up all the supply and demand idiots on Digg that used to yell at me when I'd mention oil speculation. - martinaoe2, on 11/02/2009, -1/+9The fed/gov spending has increased the money supply. Inflation will follow.
- brad3378, on 11/02/2009, -2/+10Pick your poison:
Higher prices (via a weaker dollar) or lower wages.
Welcome to the global economy.
Good luck competing against Chinese wages with
your $100,000 art history degree and $250,000 Mortgage. - jsffive, on 11/02/2009, -0/+7I have a problem with this statement: "Since oil is bought and sold in dollars, it's cheaper when the dollar is down. That in turn draws speculators, who drive up the price."
When the dollar is down, it requires MORE dollars to buy something. It's that simple. Ms. Salisbury doesn't know her head from her ass. Printing more currency NEVER makes something that you buy with said currency CHEAPER. It makes it more expensive.
It doesn't have a damned thing to do with speculators. It's a simple exercise in supply and demand. If you have MORE of something, it's worth LESS. If you have LESS of something, it's worth more. Since the Federal Reserve doubled their balance sheet in the past year, it should come as no surprise that the one thing that virtually everyone buys with U.S. dollars is going to go up in price.
It's much the same reason why, when they pumped billions of credit dollars into the housing industry, it caused house prices to go up.
But it can only last so long. We're on the precipice of a crack up boom. - NSResponder, on 11/02/2009, -3/+10Hey, don't worry! Ben Bernanke says a weak dollar doesn't matter, because we'll just buy local! Oh, wait.
-jcr - PeppermintPig, on 11/02/2009, -3/+10Competition.
- Barackalypse, on 11/02/2009, -1/+8The most amusing thing of all is the Government taxes you on the inflation that it causes (yes, I know the gas tax is a somewhat special case being that for the Feds and many States it is a fixed price per gallon).
- theratdotus, on 11/02/2009, -0/+62010, the year of hyper inflation. get ready for a rude awakening!
- rizzo2008, on 11/02/2009, -0/+6Most of the oil produced in Alaska is exported to Japan and the location of the refineries is the big factor when it comes to cost of the finished gasoline/diesel fuel. Also winter diesel fuel mixes cost a bit more
- Bloodwine, on 11/02/2009, -0/+5I think fixing the oil market would be rather simple, we'd just go back to making oil contract buyers take delivery of the oil.
I'm sure that would cause other problems because so many funds and investors have built a sizeable portion of their schemes around oil, including some pension funds. - PeppermintPig, on 11/02/2009, -4/+8Are you saying the competition DIDN'T push the prices lower? If that's not what you meant, then clarify what you actually mean because you're not making sense, and it appears you're just being a troll.
Competition does lower prices, which is not confined to a single point in the chain of production/commerce as you imply by limiting the application of the term to gas stations. Competition also promotes innovation, which also lowers prices. At any point along the chain, it is possible for anti-competitive forces, such as cartels, creating price control effects.
So this week you're a former gas station owner? Somehow the closest I think you ever got to gas was huffing it to get high. - korvan504521, on 11/02/2009, -0/+4unfortunately we can't all live in superdense cities.
- cyberdork, on 11/02/2009, -0/+4Wow, I just saw Alaska has 6 oil refineries!
http://en.wikipedia.org/wiki/List_of_oil_refinerie ... - Kronos6948, on 11/02/2009, -0/+4How about a little of both! Seems like what we've got!
- Ne007, on 11/02/2009, -1/+5There is ALWAYS some excuse.
- borez, on 11/02/2009, -2/+6"Washington, said the gas price hikes were driven by crude oil prices"
If this is the case, then when oil fell from $150 to $40 last year then gas/petrol prices should have plummeted through the floor, did they... did they *****. The highs and lows maybe loosely connected, but as to what kinda of scale they use, I'm guessing it one of those magical off centre by a mile scales that doesn't quite add up, but... it does magically increase when there's a holiday period, that's for sure.
Also this article complete fails to mention that Iran has just shifted it's oil trading away from the petrodollar and we can expect other countries to follow suit ( funny how the kept that one out of the news eh ) it makes absolutely no sense what-so-ever for Russia ( already part trading in Rubble's ) China and Europe to be trading in Dollars any more, they're simply propping up the US trade deficit, and considering the dollar nearly crippled the world economy last year, then ( I presume they're thinking ) that it's time for a shift away from the dollar as the Worlds premium reserve currency.
What this will in turn do for the price of oil/barrel is anybodies guess, it's going to be interesting ride though. For sure. - AwakeAmerican, on 11/02/2009, -0/+4LOL
- Elranzer, on 11/02/2009, -1/+5We don't have competition in the oil industry, we have cartels.
- rizzo2008, on 11/02/2009, -1/+4um that's why an art history degree is a stupid idea. Also what matter most isn't wages but purchasing powering. "Lower" wages typically means lower prices as well due to deflation (which is what would have happened had the government stayed out of the private sector during the financial crisis this past year) so your purchasing power will probably remain the same if not increase. Raising prices and wages through overspending can decrease purchasing power so your higher wages mean very little.
- Zippo, on 11/02/2009, -0/+3Yeah... If the US dollar goes down, gas goes up. And if the Canadian dollar goes up, gas goes up.
There's really no winning.
The sooner we get away from gas, the better. - geopiscean, on 11/02/2009, -1/+4OMG..is the gas prices again goin to climb up...
- dutchguilder2, on 11/02/2009, -1/+4On average, a barrel oil passes through 18 traders (Goldman Sachs, etc.) from the time it is pumped until it is refined into gasoline, each taking their cut along the way.
- monodelasno, on 11/02/2009, -0/+3Alaska doesn't have refineries.
- Mayday408, on 11/02/2009, -0/+3My common sense tells me this
You get the oil from alaska, but not gas. Gas is imported, and that is what makes it expensive. Truck drivers in the frozen tundra get paid bank for their job. - magamiako, on 11/02/2009, -1/+4How about we stop letting people "invest" in our oil market?
Rather than having a Supply & Demand market with oil, we have a Supply & "What we think demand might be" market, which in almost every case is far higher than what the actual demand comes out to be--but they don't care because they just shaved money off the top for themselves. - tsotha, on 11/02/2009, -0/+3What you're missing here is the fixed cost oil companies and refineries have regardless of the price of oil. The cost to refine and ship a gallon of gas is independent of the cost of crude, so there will always be some floor below which the price of gas will not fall. Just because the price of a barrel of oil falls from $160 to $40 doesn't mean the price of gas will fall by 75%.
- borez, on 11/02/2009, -0/+3You're cheap Chinese toys have funded China into the position of being a massive economic world player, they're buying up sustainable commodities left right and centre from the US and other part of the World.
The irony of this is darkly poetic. - stillhateyou, on 11/02/2009, -0/+2"I hope that shuts up all the supply and demand idiots on Digg that used to yell at me when I'd mention oil speculation."
Oh don't worry, nothing will shut the free market fundamentalists up. Just ignore them. - oreobarbie, on 11/02/2009, -0/+2Excuses excuses. Where are my solar powered flying cars?!?!
- 1234brandon, on 11/02/2009, -3/+5Sucks for me, I drive 52 miles each way to work.
- dilbert, on 11/02/2009, -0/+2Dollar goes down, Euro goes up, in Europe the gas prices go up. Yay economics!
- sweet8, on 11/02/2009, -0/+2imagine if we had a weak dollar, weak economy, and it was Labor Day!
- thebudda, on 11/02/2009, -3/+5Wow, if we'd started drilling at home and building new refineries 2 years ago we'd be almost halfway to telling OPEC to F*** OFF and be that much closer to energy independence. Let's all thank the environmental extremists and the liberal idiots in DC that can't figure out simple issues like this and keep strapping down the private sector.
- vertinox, on 11/02/2009, -0/+2On a side note, a weaker dollar does make import more expensive which leads to investment into producing goods at home which in turns gives Americans more jobs than where it had a stronger dollar.
The problem is that China pegs their currency at a fixed rate against ours and we have to import oil no matter what.
Well if we can solve the oil dependency thing then we can probaly fix most other problem...
Actually the weak dollar isn't the problem. Its the fact we have to import oil. - bman1984, on 11/02/2009, -0/+2They are still trying to work out how to rape the lower and middle class with the next energy source. As soon as they have that worked out, we will move away from gas. It won't help me or you a bit.
- Chunken, on 11/02/2009, -1/+3they always find some reason to to keep the price high
- rizzo2008, on 11/02/2009, -6/+7Thanks Federal Government for driving up the price of commodities again
- borez, on 11/02/2009, -1/+2Well if that's the case mate, although I'm not sure because I'm an idiot according to you but... how come when oil was peaking at $150/barrel last year then the price at the pumps was paralleling it on a daily basis?
Work that one out eh. I mean I've tried, but I'm just an idiot. - fonebone, on 11/02/2009, -1/+2You are wrong:
"When the dollar is down, it requires MORE dollars to buy something."
This only applies to something that is priced in a currency other than dollars.
The original statement is correct:
"Since oil is bought and sold in dollars, it's cheaper when the dollar is down. That in turn draws speculators, who drive up the price."
When the dollar is down, you're paying less (same dollar amount, but worth less), i.e. cheaper. Look at it from the perspective of someone from another country, e.g. Japan. Say $1=100 yen and oil is $20 (2000 yen). When the dollar loses value, say to $1 = 90 yen, oil is still $20, but for Japan oil is now only 1800 yen, i.e. oil has become cheaper (nominally cheaper for the whole world except the US and cheaper for the market as a whole).
So when oil is cheaper because of something that's not fundamentally oil related (i.e. the currency in which it is traded goes down), speculators will jump on the opportunity to grab an undervalued commodity and re-sell it at the correct price.
From an American perspective, this is inflation. You reap what you sow. - Taiyoryu, on 11/02/2009, -0/+1Yes. Let's blame only the federal government. It's not like aggregate personal consumer choices don't affect the economy at all.
- cyberdork, on 11/02/2009, -4/+5Seems like you don't understand the difference between oil and gasoline.... sad...
- 1234brandon, on 11/03/2009, -0/+1If it were possible I would. Unfortunately its financially impossible right now.
- WageSlave, on 11/02/2009, -3/+4Move closer to work you idiot.
- SandyLanders, on 11/03/2009, -0/+1Right and we would not have to import oil if we can move the Democrats aside and really go after our own resources.
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