If at all possible I want to start a chain reaction to get everyone in the country (world, if possible) to not purchase gas or oil for 1 entire day. It would be interesting to see what would happen to the gas prices and stock market. Or we could go old school and burn up and oil tanker or field kinda like our forefathers did with the tea.
Whatever people don't buy that day they will just buy the next. Temporary shocks do not affect aggregate planning behavior anyways.
well let's just stop buying fuel until the government agrees to start using alternative fuel.
Ironman262 wrote:
well let's just stop buying fuel until the government agrees to start using alternative fuel.
If only that could be possible
Ironman262 wrote:
well let's just stop buying fuel until the government agrees to start using alternative fuel.
ah, the idealism of youth.
Ironman262 wrote:
well let's just stop buying fuel until the government agrees to start using alternative fuel.
I notice you suggested to stop buying fuel rather than to stop using fuel. If you (and others) are still going to end up using the same amount, just how do you figure there will be a drop in demand that will result in a drop in price? Don't they teach anything about economics in school these days, or did you just skip class for that lesson?http://www.snopes.com/politics/gasoline/gasout.asphttp://www.snopes.com/politics/gasoline/nogas.asp
Good point, but I ask this question - demand is down .5-1% in the last month, US reserves are at a 15 year high and oil hit a new high today.
2 months ago a barrel was priced in the $80s. Now two months later we are told in the press that the rise is due to the falling dollar as buying oil acts as a hedge against the dollar dropping.
The dollar has been dropping for some time now. It did not drop enough to warrant a 20%+ increase in two months. So, is it possible this run up is due to hedge funds and other traders buying up the price of oil and that at some point the bubble will "pop"? I have not seen one analyst saying that the current demand rates for oil warrants this price point.
Novel idea....where I work, at least 1/2 of the staff don't need to drive into the office, but most of the upper brass require we be here (for reference I haven't had a single face to face contact with another human today...all done over the web/phone). I know this wouldn't work for every business, but what if the businesses such as mine agree to allow a minimum of 1 employee to work from home 1 day per week. If 10 or 1,000's of businesses did this I would think there would be a marketly measurable drop in fuel consumption?
#$&^*, 1/2 my office could work from home everyday and do the same dam job.
Does that include boycotting petroleum-based products, like plastics? Or products that require petroleum at some phase of production?
Don't be a moron. Boycott useless ethanol; same environmental effects, increases food costs.
To do this, you will also have to not buy anything made of plastic, since that is made from petroleum products. Try going through a day where nothing you buy has any plastic.
You won't be able to eat virtually any food since most of it is grown from fertilizers and pesticides derived from petroleum products. You can't turn on any lights or use any electricity since most of that is powered by plants running on petroleum products. There will be many medicines you can't take as well.
Boy Wonder wrote:
So, is it possible this run up is due to hedge funds and other traders buying up the price of oil and that at some point the bubble will "pop"? I have not seen one analyst saying that the current demand rates for oil warrants this price point.
yes.
Wait until the oil reserves run dry and we all realize that ANWR will support about 1% of our consumption. Then you can be sure to go without oil for many days.
Oh -- and if you think the middle east hates us now...wait until their only commodity is gone.
Moron? I suggested the work thing, not boycotting anything.
You can't walk on carpet either. Almost all carpet is petroleum based.
People act like economic models drive price changes. People make decisions to change prices. In this case, people who know that they are experiencing a single day boycott make the decision to change prices (unless you think that someone will be able to spread the word of the boycott to everyone on the planet while keeping the oil companies in the dark about it). It isn't like the oil company executives will all be sitting in their offices and suddenly realize that there has been a demand side shock and immediately drop the price of their product despite the fact that they knew that there was a large boycott scheduled for today. In reality, they'll just expect sales at their gas stations to be sluggish for a single day. When going over the sales of gasoline later on, they'll notice low sales on the day of the boycott and increased sales on the days before and after. They'll ask each other, "what the hell was the point of that?" and continue to do business as usual.
You're probably thinking about that supply-demand model that you used in intro econ and thinking that it tells you that a drop in demand (with supply held constant) will cause a decrease in price. You are, of course, looking at it backwards. Models are a representation of what is going on in the real world. The real world creates the model, the model doesn't create reality. Prices fall because the company can't sell enough at the current price, not because some guy with a chalk board moved a line to the left and then wrote "p*" somewhere below the original price. If the guys at the oil company know the reason for their very short term excess inventory and know that it won't continue, there is no reason for them to drop prices (remember, they're the one's making the decision, not the model).
Here's an idea, why don't you cut your gas and oil usage by 75% - every day. That would be interesting to see what would happen.
Ironman262 wrote:
If at all possible I want to start a chain reaction to get everyone in the country (world, if possible) to not purchase gas or oil for 1 entire day. It would be interesting to see what would happen to the gas prices and stock market. Or we could go old school and burn up and oil tanker or field kinda like our forefathers did with the tea.
thanks for some voice of reason - most of this started when oil futures started trading. it takes a very small (relatively speaking) amount of cash to control 1000 barrels of oil. anyhow, the speculators are really driving the price up ... notice how the price goes up on even a rumor of "bad" news.Here's the quote from a commentator on Fox news ... and they should know."The New York Mercantile Exchange is the preeminent energy futures market in the world. It has become the price-setting mechanism for oil. Even OPEC refers to NYMEX when it sets its price targets. Right now it costs exactly $3,375 for anyone to control 1000 barrels of crude oil valued at roughly $67,000. Three grand to control nearly seventy!""Last August I happened to run into Senator Chuck Schumer (D-NY) outside my office here on Wall Street. I asked him why more pressure wasn’t being placed on the NYMEX to raise margin requirements given the high level of prices and the known fact that speculation was adding anywhere from $10 to $15 to the price of crude. His answer to me was, “That’s a good idea.”"Notice the price per barrel of crude in the quote ... obviously, nothing has changed, except the price has gone up.
chuck d wrote:
Boy Wonder wrote:So, is it possible this run up is due to hedge funds and other traders buying up the price of oil and that at some point the bubble will "pop"? I have not seen one analyst saying that the current demand rates for oil warrants this price point.
yes.
I think, if we are going to boycott oil for a day, then we must also cease breathing, or eating for an entire day as well.
1 day would have no noticeable impact. You would just consume more on the days before and after.
This logic seems lost on most individuals, I don't know why I bother.
Fact is this, we are well supplied with oil- no shortages this year unless something REALLY bad happens, like Katrinax2. But that doesn't mean prices will go down. I fully expect Oil to collapse sometime, and it will used to prop up the Dow. However, the floor is 85ish, if it gets there. It will do a V there, and then back to 95-100. But gasoline is the kicker. Demand will not fall off as much as some predict and prices will stay around 4 for the rest of the year instead of shrinking back. In some markets it will shrink back, in most it will not.
If you aren't in Commodities right now, you may want to wait for the speculative bubble to blow up, and a blow off to occur taking us back to floor levels, then load up again because this is a long bull, no matter the economic situation. These commodities are vital for EXISTENCE not merely consumption or other purposes. Prices can only go so far down.
Expect 5-6 dollar gasoline in 2009, 2010, and perhaps even outright shortages in some markets. From there it only gets worse. The Thing about Oil is that until 2010, we are sitting ducks in terms of new production capacity and as economic demand declines, SPR's across the world will pick up the slack. It will be a massive bidding war with obvious results. Do not get caught with your pants down!
supply numbers:
Days of supply:
SPR: ~65 (add 60 to all below)
Crude: 21.3
Gasoline: 26
Kerosene: 24.1
Distillate: 26.7
Propane: 17.5
http://tonto.eia.doe.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm
With domestic production that extends this supply out another 2 months. However, minimum operating levels exist with stocks of oil products, meaning fall below MOL and oil product deliveries become highly erratic.
When you include Mexican and Canadian Oil production, and also Saudi and Iraqi Oil production that is imported, the U.S is more than well supplied. Those four exporters will always form the basis of U.S imported oil. If those 4 and what we have now in the SPR and other stores was all we had, we could go 1.5-2.5 years (depending on demand, and production) before major shortages became problematic for agriculture and civil order. Rationing could extend those few years out another year or so before that point was reached.
In terms of MOL, we stand only 20 or so days away from major shortages, and by the time most tanks ran out of gas (gasoline demand is down because people are running their tanks dry) a day or so later, and food pantries had been raided, a month after MOL was breached people would start running out of food in most major urban areas. This is why its so important to have a nationwide plan if something like Katrina happens again, because something small could effect the entire country.
That said, with the level of supply we have (in terms of days of supply, not physical quantity, because demand is higher than it was 15 years ago) is quite great relatively to the last year, when shortages looked very probably and which we avoided by the skin of our teeth, literally. If we make it to 2010 without major shortages of any sort, new oil projects, ethanol production, natural gas powered vehicles and economic decay will keep oil demand within supply boundaries, meaning society won't implode, and society can cope more easily with more expensive oil.
If we see shortages now, before Wind Power generation has reached critical mass, before Coal to liquid projects have been started, before Ethanol production doubles again, etc, then all of the industry that it will take to make those things will be ravaged and it will make the next decade much harder. Remember, industrial capacity must be able to function for us to change off of Oil and to more reasonable sources, like renewables, NG, solar, wind, ethanol, coal, and nuclear. The current financial crisis is not helping, nor is the grandstanding by Mr. Iran and Mr. Chavez. They literally can screw everything up and put is in a depression. Thats why war is sometimes the answer, and if you don't fight it, well, you end up in a depression begging for handouts from Madame President.
Ironman262 wrote:
kinda like our forefathers did with the tea.
I am with you, except I do have some concerns about dumping oil in Boston Harbor.