$98 per barrel oil

Jay Honeck wrote in
ups.com:

An increase of production of alternatives would only stand to drive the
price of oil even further up, based on the law of supply and demand...

This sounds backwards. Explain, please.

It's a monopolistic situation, driven by factors other than a free market,
so it works backwards.

If fewer people are buying oil, the oil companies need to increase their
price to the market in order to keep revenues and profit margins up. They
are public companies with market expectations, which further drives the
need for increased prices.

Until such time as the alternatives are readily available to the entire
general public, it will only compete for those people who can, for example,
afford to trash their 1990 Honda Accord for a brand new 2009 wok-oil
burning Honda Wokcord. Not to mention all of the existing infastructure in
homes and businesses that cannot easily or quickly be retrofit to use some
other alternative energy source.

Eventually, over time, as improvements in technology bring down the cost of
switching, the "competition" created may cause oil prices to start to drop.
However, because the oil prices are determined in a collusive manner, it is
unlikely that you will find much undercutting and price-warring that you
find in other industries when an alternative is introduced.

Even if GM or Honda or whomever were to introduce a Wok-Cord today that was
affordable and practical as an alternative to gas-powered cars, it will
take at least 10 years (and proably twice that) before the impact is
significant enough to bring the oil companies back to free-market demand
curves. Especially if the oil companies continue playing the market so well
the way they have been. All they will have to do is keep the price low
enough to reduce the incentive to switch, and then they can gouge you every
holiday to make up the difference...

If you don't believe me, why don't you own a Prius?

Judah wrote:
Jay Honeck wrote in
ups.com:


An increase of production of alternatives would only stand to drive the
price of oil even further up, based on the law of supply and demand...

This sounds backwards. Explain, please.


It's a monopolistic situation, driven by factors other than a free market,
so it works backwards.

If fewer people are buying oil, the oil companies need to increase their
price to the market in order to keep revenues and profit margins up. They
are public companies with market expectations, which further drives the
need for increased prices.


Complete and utter hogwash. One merely has to watch the market reports
and every time there is a down trend in demand or an uptick in supply
the price drops. If all our cars suddenly got 10 mpg more the price of
oil and therefore gas would plummet.




If you don't believe me, why don't you own a Prius?

Why waste money on that overpriced roller skate when you can spend less
and get better gas mileage?

Newps wrote in
:

Complete and utter hogwash. One merely has to watch the market reports
and every time there is a down trend in demand or an uptick in supply
the price drops. If all our cars suddenly got 10 mpg more the price of
oil and therefore gas would plummet.

But supply is controlled by OPEC, not by free market forces, so your
observations are skewed. OPEC magically cuts supply at Holiday periods to
maximize profit taking. It happens now every holiday like clockwork. Google
"holiday gas price increase" and read articles from NYTimes and Wash Post,
and plenty of other sources that describe this phenomenon going back to 2004,
and that's just when it became so blatant that we figured it out...


If you don't believe me, why don't you own a Prius?

Why waste money on that overpriced roller skate when you can spend less
and get better gas mileage?

Proving my point exactly.

Judah wrote:

But supply is controlled by OPEC, not by free market forces, so your
observations are skewed. OPEC magically cuts supply at Holiday periods to
maximize profit taking. It happens now every holiday like clockwork. Google
"holiday gas price increase" and read articles from NYTimes and Wash Post,
and plenty of other sources that describe this phenomenon going back to 2004,
and that's just when it became so blatant that we figured it out...


Well then isn't about time we start to replace more of these Opec-
controlled imported oil with more our own domestic production?

Oh that's right, we can't so that, that's Baaaaad! So let's just
keep whining about it.

Or perhaps if we all just pay a "carbon tax" maybe the problem will
just go away.

"Newps" wrote in message
. ..

If fewer people are buying oil, the oil companies need to increase their
price to the market in order to keep revenues and profit margins up. They
are public companies with market expectations, which further drives the
need for increased prices.


Complete and utter hogwash. One merely has to watch the market reports
and every time there is a down trend in demand or an uptick in supply the
price drops. If all our cars suddenly got 10 mpg more the price of oil
and therefore gas would plummet.

Like OPEC gives a crap about "demand"?