What's the 'REAL' reason for this economic downturn?

One basic fundamental seems to always be left out of consideration when you hear or see all these wildly educated Wall Street gurus speak about futures, trends, etc., the basic component of every single price in the land...the consumer! What did Wall Street think would happen when oil prices drove the price of gasoline up above $4.00 a gallon? Well, let me tell you what it did to me and my house. We had to cut back in everything. Financially, we were at a point of not being able to afford a fuel efficient vehicle, SO, we had one vehicle that only averaged about 16-19 mpg and one that averaged about 13-15 mpg! Our fault...true enough, but most Americans are/were in the same boat. The housing 'crisis' did not effect me directly as I rent. Thus, the one thing that I require is my job and the ability to get to and from my job each day. When one must pay in excess of $800.00 per month in fuel costs for just one vehicle, gee-whiz Oppey, we just cannot afford to go shopping anymore! The bare essentials is all we purchased. Needless to say, I pray daily for the absolute collapse of the oil industry! They deserve it 1000 times over! Billions of dollars in PROFIT in a single quarter! CRIMINAL! Criminal especially at the expense of people's lively hoods! I am a red-blooded American and spent 23+ years in service to my country and believe whole-heartedly in capitalism, but there comes a point where certain things should become illegal! When prices begin to drive folks into poverty, then we need to reassess how we are doing business. Just a humble opinion from a man with a 'commonsense' approach. Semper Fidelis.

how can the price of oil go up if the demand goes down due to the depres...

Suggestion by 71.102.45.226 on 2009-06-28 20:44:38

how can the price of oil go up if the demand goes down due to the depression we are in?

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Removal

Companies such as FedEx, DPWN, UPS, TNT, etc. have such lower fuel sensitivities than the airline industry due to their hedging abilities and much shorter lead times on purchase-to-delivery services. Given that both types of companies are, in essence, in the business of operating airlines, to list them both here is misleading. I have removed them.

With Light Crude Deliv 5/09 at $47.87, why hasn't the price of gasoline ...

Suggestion by 64.179.29.90 on 2009-04-22 18:06:52

With Light Crude Deliv 5/09 at $47.87, why hasn't the price of gasoline gone down? The price shot up the second prices got above $50. In fact, prices have gone up over 13 cents in the last week when oil prices were falling. On Monday, oil prices fell more that $4/ barrel. Did we see an immediate corresponding drop in oil prices? No!!! In fact, just the opposite happened. Prices went up. And Please, don't insult my intelligence by telling me about the "greater demand for Summer driving". If the price is quick to go up, and all circumstances are the same, prices should be quick to go down. I would like to have a plausible response. Thank You, Alphonse

Gas stations are, for the most part, locally owned and operated ( I'm assuming that you are living in America). Each individual gas station owner (or each individual that owns several gas stations) engages in forward contracts, frequently with a supplier taking gas from a parent's upstream operations but by no means always doing so. They add the Shell additives or Techron or whatever and brand the gas as their own at the pump. Because of the different scales and strategies of the various types of downstream point-of-sale operators, during times of volatility prices in a local area will tend to fluctuate the wildest for the operators with the lowest hedge rates and they will fluctuate the least for the operators who have tied contracts in far in advance. Typically, this means that gas lags behind crude for a few weeks and ends up roughly falling in line at any given point with a moving average of between 4 and 1.5 weeks ago of the crude price. This leads to less volatility at the pump and steadier revenue streams for pretty much everyone who isn't trading crude futures on margin.

You might have also noticed that pump prices fell from December 24 to 31 but rose during January 6 through 18. Last time pump averages were this high, the forward contract was trading at $51-55. I assure the circumstances are the same. Although summer driving does effect the demand for gasoline, my intuition is that changes in American gasoline consumption are significant enough in the global oil market to drive the crude price.

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where to obtain a list of oil prices per barrel

Suggestion by 68.183.17.246 on 2009-02-02 21:20:22

where to obtain a list of oil prices per barrel

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who are the authors??

Suggestion by 76.115.144.89 on 2008-11-17 20:59:37

who are the authors??

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reason for demand

Suggestion by 59.92.89.241 on 2008-10-17 10:16:27

reason for demand

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According to several web sources, California consumes more gas and diese...

Suggestion by Rlanham1963 on 2008-07-23 17:56:02

According to several web sources, California consumes more gas and diesel than China. Isn't the developing world thing a bit of a non issue?

The problem isn't whether it consumes more now. The problem is that China never consumed as much in the past as it does now - and demand continues to grow. That means that in the past, production capacity was enough to meet demand around the world. With China's demand growing so fast, though, and far higher than it has ever been, production capacity is now insufficient to meet demand at previous prices, forcing prices up to create an equilibrium. The same thing is happening in the silicon market, thanks to growing demand for solar power.--AviGandhi 11:34, July 23, 2008 (PDT)

In India Oil is subsidized by about 50% and still we end up paying $6/gl...

Suggestion by Premchand on 2008-07-17 14:32:40

In India Oil is subsidized by about 50% and still we end up paying $6/gl and they say the demand in oil prices are due to high consumption in India and China. Well if you see the automobile density in India is negligible compared to any of the western countries and still due to non availability of resources we end up paying more? How is globalization addressing this problem?

India has over a billion people. It makes sense that, despite the subsidy, the price is higher because while density might be negligible, the number of cars (hence, demand) is growing very quickly. I'm not a proponent of globalization, at least not in the way it's occurring right now, but in theory globalization allows India to receive oil and natural gas from countries with much smaller demand but much more petroleum (e.g. Iran, Russia). As more underdeveloped nations develop their resources, the theory is that they will be able to send oil abroad, to larger/growing markets. The question, however, is whether or not there is enough production capacity globally to meet growing GLOBAL demand - caused by the largest emerging players (like India and China). With oil prices as high as they are, I'd say no.--AviGandhi 11:34, July 23, 2008 (PDT)

In terms of cost to the end consumer, here in the UK the price at the pu...

Suggestion by AndyCox2001 on 2008-06-17 12:51:49

In terms of cost to the end consumer, here in the UK the price at the pumps is largely made up of tax. Is it this tax that impacts on consumer wallets rather than the ups and downs of the price of a barrel?

No. The tax is relatively constant. It's the price of a barrel that matters to volatility, as refiners are forced to pass on as much of their costs as possible (and still they're starting to lose money), as well as demand for gasoline (remember, gasoline is also a commodity, making it susceptible to both pricing pressure from inputs and competitors).--AviGandhi 11:34, July 23, 2008 (PDT)

We pay $4/gl for gas. ER pays >$8/gal. Is the difference because of t...

Suggestion by 64.12.117.10 on 2008-06-12 02:03:28

We pay $4/gl for gas. ER pays >$8/gal. Is the difference because of taxes? How much does China pay?

The difference is taxes. Exxon spent $5 billion on taxes in the U.S. and $25 billion on taxes elsewhere (and they like Americans to think they pay a lot in taxes - but no one knows that its not in America). European petroleum is much more heavily taxed.--AviGandhi 11:34, July 23, 2008 (PDT)

why are gas prices so high

Suggestion by 70.245.198.230 on 2007-11-18 22:16:01

why are gas prices so high

Gasoline is refined from oil. When oil prices rise, gasoline refiners are forced to raise gasoline prices in order to keep gas profitable.

What does the price of oil look like in terms of the euro?

Suggestion by Rhpurcell on 2007-11-03 08:23:24

What does the price of oil look like in terms of the euro?

Oil is priced in U.S. dollars internationally; just use whatever conversion rate you find on the net and that'll give you the equivalent.

RE Who benefits from increase in price--environmentalists:

How about adding environmentalists, those concerned, desirious of reducing car, truck useage--reduction of driving would make them happy.

I don't have the detailed information, but I hope someone with better information might consider above.

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