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Gasoline could drop 50 cents/gallon by spring

Discussion in 'Fred's House of Pancakes' started by malorn, Feb 7, 2008.

  1. apriusfan

    apriusfan New Member

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    Don't even have to wait until Labor Day - GMC Sierra 1500 P/Us have 0% financing right now. And they get a little better than 12 mpg City....
     
  2. dogfriend

    dogfriend Human - Animal Hybrid

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    I already have a Ford Explorer that gets 15 mpg, thanks. :(
     
  3. apriusfan

    apriusfan New Member

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    Ha! But Explorers are wannabe trucks.... You could get a real truck for $0 down and 0% and you wouldn't have to wait for Labor Day to roll around.... And, you might even be able to get 15 mpg City in the bargain....
     
  4. dogfriend

    dogfriend Human - Animal Hybrid

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    Yes, but just like my Ford Explorer, those "real" trucks will drop in value as gas prices rise. So, if I just wait for awhile, I will be able to buy a really nice, hardly been driven gas guzzling "real" truck for a song. :D

    That's one reason I have the Explorer - its not worth much, but its useful when I need to throw some dirty stuff in the back from Home Depot or rent a small trailer to haul some landscaping material. So it doesn't get driven very much.

    Last year, I drove the Prius 15,800 miles and drove the Explorer about 1200 miles or less.

    If I buy one of those pristine used "real" trucks in the future, it will last forever because I will almost never drive it.
     
  5. ADMII

    ADMII Junior Member

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    $4.00 by the $th of July.
    "But like I said, oil isn't trading fundamentally. Here's why.
    As oil spikes above $101, predictions of $4 a gallon gasoline could become crude reality by spring. Be prepared. Crude is rebounding strongly, rising more than $2 a barrel to new records, as a historically weak dollar and the prospect of lower interest rates attracted even more money flow to oil markets. Instead of viewing 0.6% Q4 GDP growth, coupled with rising unemployment numbers, as a negative, investors are using it as fodder for further interest rate cut arguments. As interest rate cuts weaken the dollar further, crude futures offer traders a hedge against the falling dollar. And oil futures bought and sold in U.S. dollars are more attractive to foreigners as the dollar plummets." I quote Ian L. Cooper from his daily news letter. This guy is as sharp as they come.
     
  6. daniel

    daniel Cat Lovers Against the Bomb

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    It's been almost a month since malorn posted in this thread. I wonder why?
     
  7. dogfriend

    dogfriend Human - Animal Hybrid

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    I don't know, but I do know that here in Sacramento, gas prices are up $.40 since he first posted on Feb 7.
     

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  8. dogfriend

    dogfriend Human - Animal Hybrid

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    I have an Economics question for Malorn.

    What happens to the price of a product when the cost of raw material goes up?
     

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  9. samiam

    samiam Antipodean Prius Poster

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    Doesn't the answer depend on the profit margin the seller is currently enjoying? And whether continuing that level of profit will cause some buyers to shift elsewhere in the marketplace (other energy or transport products)?
     
  10. dogfriend

    dogfriend Human - Animal Hybrid

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    The seller (oil companies) can decide on whatever profit margin they want.

    There is no (short term) practical substitute for the majority of the buyers.
     
  11. ny biker

    ny biker Member

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    Yeah, the cost of raw materials goes up, and the oil companies have record profits.
     
  12. dogfriend

    dogfriend Human - Animal Hybrid

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    Yep. Some people wonder why the oil companies don't invest in more production facilities. Why should they? It would be self defeating from a profit standpoint. They just need to make sure that they don't get carried away so that people will actually take action to get away from using their product. If they don't get too obscenely greedy, they can ride this out for years.

    If they are smart, they are busy buying patents for new alternatives and setting themselves up to control the post-oil economy.
     
  13. burritos

    burritos Senior Member

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    I still think that the rise of oil prices is a function of the dollar going down as opposed to the price going up. Gold has followed the same value curve as oil, but it's not like we're consuming gold at record amounts.
     
  14. dogfriend

    dogfriend Human - Animal Hybrid

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    Its probably some of each. Lower dollar, Traders putting money on oil futures, and the traditional price rise in spring/summer.

    None of those factors seems to be pushing down the price of gas.
     
  15. tripp

    tripp Which it's a 'ybrid, ain't it?

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    And a weaker dollar means oil is cheaper for everybody else so their demand may increase as a result.

    The oil companies are in a bad situation, actually. Many of their proven reserves are dwindling and they're continually getting pushed out of new discoveries by the host countries. As a result, their slices of pie are getting smaller. That's why they're starting to get into biofuels (Conoco is setting up a huge R&D facility here in Denver and I know Chevron's involved).
     
  16. burritos

    burritos Senior Member

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    Sorry biofuels is a loser. We're running out of water as it is.
     
  17. tripp

    tripp Which it's a 'ybrid, ain't it?

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    Biofuels can mean any number of things. Right now it's ethanol/butanol, but it can also be pyrolysis/FT fuels, which don't require massive water inputs (or really any water inputs), as far as I know.

    They've also been involved in battery development, though it would seem the interest there is of a more sinister nature.
     
  18. nerfer

    nerfer A young senior member

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    Saudi Aramco said several years ago they don't want the price of oil to go over $35/barrel because that would encourage conservation and alternatives. Now they are saying at $100/barrel they won't increase production because "the demand isn't proven to keep that price". At least that's what they were saying in late 2007, I'm not sure what the reason was at the OPEC meeting this week when they kept at the status quo. You might think they're just protecting a lucrative income, but really it's because they can't produce more than they already are. (And don't blame Exxon or BP. They're just bit players compared to the nationalized companies, being pushed out of more and more markets, most recently Venezuela).

    Not to be too alarmist, but according to an EVWorld interview (you need a paid subscription to read the whole thing) of Matthew Simmons (the oil-banking exec turned peak-oil expert who wrote "Twilight in the Desert"), we've got somewhere between several months and a couple years before the Middle East starts production declines. Permanently. When people realize the truth about that, prices could double again. Conventional crude oil production already peaked in May 2005 (that doesn't include 'unconventional' sources like Canadian tar sands, which now accounts for 20% of U.S. petroleum imports).

    I don't know what will happen this spring, but I know in 4 years time, people will laugh (in a disgusted kind of way) at how cheap things were back in 2008, what were we thinking spending our money like we did.

    Maybe in California. Here it's more a matter of what to plant. If you put your ethanol plants next to feedlots, so the leftover slurry can be fed to the cows, it's not such a bad thing. But ethanol is not the best solution, by a long shot. We need serious research into algae-based biodiesel and cellulosic ethanol. That, real conservation, and real EVs are the only answers that will work in the time we have.
     
  19. apriusfan

    apriusfan New Member

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    There was a plan by the major refiners to add capacity until the recent push for ethanol production. Faced with additional supply from ethanol production, most of the refiners shelved the expansion plans because the increased ethanol production almost exactly matched the proposed increase in gasoline production. Nothing like keeping prices high by constraining supply. Don't look for any relief from the Federal government any time soon (especially if McCain is POTUS).

    It is not so much about the post-oil economy as it is about the present-oil economy. If the Prius was getting an average of 100 mpg along with other high mpg hybrids coming on-line, there would be less demand for gasoline and the current high prices could not be sustained. The whole objective of control over alternative technology patents is a market control measure.
     
  20. apriusfan

    apriusfan New Member

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    If one were to graph the price of petroleum vs. the price of a gallon of gas over time, there have been many times where the two were not linked. Right now is an example. Oil is fluctuating around $100/barrel, yet gasoline prices are headed northward.