This is a little off topic, but has kept my rearend parked at the house when I ought to be fishing. I figure this has effected everyone across the board and you will find this interesting. It has me seriously wondering if I'll ever be able to afford another boat.
My job allows me to do a little day trading on the stock market and I came across this while doing some research on a stock. It sounds like Wall Street's and Washington's best kept secret was let out of the bag today.
http://www.marketwatch.com/news/story/wall-street-blame-runaway-energy/story.aspx?guid=%7B789899AB%2DFD58%2D4110%2D9C54%2D7A42B8D50907%7D&siteid=yhoof

well that must have wanted to keep it a secert, cause it's not there anymore

Try it now, It should work.

I'm no finance major or economics major, but the bad part about it is that reality and speculation are two different things. Reality doesn't always happen, instead speculation takes the lead and there go prices, UP! When in reality it shouldn't be going up as sharply. Speculation kills a lot of markets and unfortunately it hurts everyone, over nothing, not reality just speculation.

Let's not forget the most important underlying fact:

Oil Supplies are peaking

You can talk speculation and market manipulation all day/night because these are also affecting the price. But under it all, there's just not enough to go around anymore.

Heck, I'd love to buy a boat, but I have enough problems filling my compact pickup up right now. I'm planning on downsizing.

High/skyrocketing oil prices are here to stay.

There was a video clip last week on the WWW of an annalist saying that if we were strictly on a supply and demand based market instead of a speculative market oil would be up from what it was 3 years ago but only to about the $45 to $50 a barrel range. I'm guessing if that were so we would be paying around $1.50 for unleaded. I think if the general public can here about this the FTC will be forced to do something about it and soon. I've been wanting another bass boat for a while but I'm not even going to think about it if I have to put $3.50 to $4.00 a gallon fuel in it and my tow vehicle.

Nice article - perhaps that's the reason for 10% of the high
cost of oil. Here are two more:

1. From 1986-2001 over 800,000 oil patch jobs were lost
in the USA. The children of those that were laid off
for the most part were told not to work in the E&P industry
and ride the roller coaster.

2. Imagine that you with your 1 gal gas can are standing
at a cash register station at a long counter. As you look
at the register next to you there are 10 Chinese standing
in line with their gas cans offering 20 cents more than
you per gal. The next cash register has 7 Indians (India)
with their gas cans offering to pay 25 cents more per gal
than you..........

Three years ago China reps went to Canada, Mexico, Venz
Trinidad, and Brazil and offered them contracts to buy
any extra oil that they might produce.

The Ledbetter Legend.

I was talking to an old oil guy here a couple of weeks ago. He was saying that oil should be in the 60 dollar/barrel range. I'm thinking all things equal, that $100/barrel should be the par about now.

I'm driving down to RC tomorrow afternoon, it hurts just thinking about the drive.

gas.. phooey. Diesel is just plain out right disgusting in price now! $4.24 at the walmart.. thats the cheapest around! I expect to see $5.00 by the end of summer. I plan on buying a compact car to commute with and only run the diesel to the lake.

I think you got that crossed up. Reality always happens, speculation doesn't. Or am I missing something?

you think it will take that long??

If y'all think about it we should start seeing prices level off soon, that is unless it really is being manipulated.

Recently I read that gas consumption was down 4% in the US. The reason for this is simple people aren't driving nearly as much.

To me what this means is that price and demand are starting to come in line with each other, and as the demand slows so should the price increases.

I've been telling my son that the price of gas will continue to go up for as long as we keep buying and using more gas. I've also told him that if he wants to see prices stop going up he has to use less gas. This applies to all of us.

For all of our lifes we have had cheap gas in comparison to the rest of the world, how many times have you heard about how gas was $3/gallon in Canada while we were $1.25 etc. This is true, Europe has always paid lots more than us.

Oil industry has also pretty much written it's own check in this country at the pumps. Every day prices change, and always have. When I started driving Gas was $.65/ gallon, then it went to $.98 for a couple years, then $1.10 then $1.50 and on and on and on and not once did I slow down on how much I used. I still filled my tank twice a week, I still drove 60 miles just to have lunch with friends, still filled my 60 gallon boat tank 3 times a month etc...

Finally it reach $3 and I finally realized to pay for all that I was sacrificing things like replacing my Garage door opener, putting a fuel flow meter in my boat, even changing the oil in my car just so I didn't have to give up all that driving. I decided to cut back on the fuel I used.

I first changed the fuel I allotted in my boat from three tanks to two per month, that made a 25% difference, then my trips across town to visit friend got cut from weekly to once a month, another 10% of my fuel, and finally now my boat gets one tank a month, and instead of driving the 2 miles to starbucks I walk *IF* I go.

I've cut my gas bills from 270 gallons a month to 140 gallons, and if I can find a way of reducing it more I would like to see it under 100 gallons without sacrificing more time on the water than I already have.

I'd guess that with the demands being reduced 4% I am not the only one that's cut back like this, and the more people that cut back the more chance we have of leveling out these prices. When they see a 10-20% reduction in demand the prices will stop going up for a while.

The "experts" at a seminar I attended this week are talking 2010 before we see oil level off and it will be over $200 a barrel. That Grapevine tournament series is looking better and better each day.

I'm just stupid. Somehow I can't help to think that a company that makes over 1.3 billion/month profit is a little bit responsible for higher gas prices. I'm a business man, if I raise prices and everything remains the same, my profit margin increases. So in my pea sized brain, if the oil companies continue to set world record breaking quarterly profits, whatever expenses they are incurring is being greatly overshadowed by the price of the product. I really wish someone could explain that in terms I could get my arms around. If they were reporting losses, breaking even or only a couple of million profit in a quarter, I could swallow the fuel pump prices easier. But over a billion profit a month?? Was I sleeping in economics 101?

Also, how does a windfall profit tax that is sometimes rattled by the government going to help the consumers with lower fuel prices? I understand how the government will get their money, I don't understand how it translates to lower fuel prices at the pump.

Castnet...

Their profits are up, BUT their markup isn't. As you put it your a businessman, if you bought an item for $1.00 and maked it up 30% you make $.30. If the same product cost you $10.00 and you marked it up 30% you make $3.00...

Oil companies are seeing the same affect. Prices of oil has increased 1000% from $10.00 a barrel to $100 a barrel. So of course their profits are going to increase by 1000% simply based on basic numbers.

You wouldn't change your 30% markup on a product if it's price went up 10 times as long as your customers kept buying that product, so why should the oil companies change their markup if we keep buying gas?

My mind is weak in this area, all I know is that now my gas bill has turned into a boat payment and my grocery bill has turned into a truck payment. Something has to give and the raise I get or got doesn't even come close to matching the new outgoing amount. Now there is talk about my credit card payments going up to a higher amount to get americans out of debt. Where do I get more money to pay for all this increase? Do I have to take out a second job or lower my standards of living? Why is it that the standard of living I chose 5 years ago no longer works? I was building money in several areas 5 years ago and now I have taken money from all the areas and most of them are gone now. The bottom is near and then all my creditors will be the ones suffering. What has to happen? Also, why must the Middle income guy have to do all the changing?


Jody

this is depressing...i think im just gonna have to buy a house on the lake and use the $$$ i spend driving there to pay for it and the $$$ i spend paying for gas in the boat to buy groceries...or shall we live where we work so we dont have to spend as much, im only 26 and i remember when i started driving and gas was $.70 a gal and my mom told me stories how it was like $.25 when she was a kid and now my kids see $3 increase...wheres the middle i would think it should be somewhere in the $1.50 range at max.

It gets fun reading this thread and links to articles and books. The issue with gasoline and other energy prices going higher is that the demand remains nearly the same as prices increase. None of us want to change our habits of energy usage so why would the refiners and foreign countries not raise the price. If speculators raised the price but no one sent the oil tanker to pick up the expensive oil then the Saudies would lower the price.

I have heard others say and read in these forums people say if the price of gas dropped they would buy a larger boat or truck or SUV. That is exactly why the price goes up since the markets know the demand is out there waiting to pay the current price plus the increase.

The ones that get caught in the squeeze are those on fixed incomes and those barely making it each month. The increased costs for energy hit their pocketobok extremely hard. It does not hit as hard the person that is willing to spend $30,000 on a new bass and a large truck to pull it. All these people need to do is not buy the new boat but continue to consume energy at the maximum rate that their checkbook will allow regardless of the price.

So in the end yes the speculation has raised the cost of energy. It is a supply and demand and until we move to the next cheaper energy source the price will increase.

You hit it on the head, prices will continue to rise until prices reach a point that it causes the demand to go down.

If media reports are correct that gas usage is down 4% over last year then we are getting close to the point where prices will stop increasing. As the oil companies see the decrease in usage increase they will slow the price increases until they find a point where the two balance out. Higher prices will mean lower demand.

This happens in every market, not just gas. The interesting thing about gas is that it took longer to happen. Most products this happens pretty quick, look at the prices of things like rods and reels. They hit the market at a high price, and they slowly come down until the companies find a balance that allows them maximum profit while also insuring maximum sales.

Gas does this daily, look at the pump price. It goes up a few pennies, if sales stay at the same level then it goes up a few more. If sales drop off then they lower it a penny or two to try to stimulate people to buy. The problem is that lately when they increase the price a few pennies we just complacently pull up and pump the same amount of gass while doing nothing more than complaining about the price.

Complaining about the price will do nothing other than get your blood pressure up. Cut back on your usage of fuel and see what happens.

All of us are feeling the pain of these prices. Those of us in the middle feel it most because we were already living on the edge of what we could afford. Those living above the middle still feel it, but they complacently continue to pump that fuel. The poor already sacrifice and feel the pain, the gas just means one more thing they have to live without.

The middle feel it the most because they were finally at that point that things were comfortable and the sacrifices were on the luxuries. Now the sacrifices are starting to hit the necessities.

Facts are when gas broke $2.00 a gallon noone did anything but complain. When it broke $3.00 a gallon the complaints turned to demands that "someone" else do something about it. Maybe when the price breaks $4.00 a gallon the demands that someone else do something about it will turn to doing something about it yourself.

If not $4.00 then $5.00 or perhaps $6.00 but at some point each of us will need to decide when WE will do something about the price, and when enough people make the decission to do something about the price then the price will level off.

I made my decission at $3.25 per gallon, I began lowering my usage at that point, and $3.50 was when I decided it was time to cut out all the excessive gas usage.

At what price will you cut back? All of us have a point when we will decide it's too much....

I cant see blaming anyone other than ourselves, we keep paying the prices they set.

The world price of oil is set in dollars. As the Fed lowers the interest rate, the dollar becomes cheaper. The cheaper the dollar, the highter the price of oil. In the last few meetings the Fed has almost advertised beforehand that they are again lowering interest rates before their meeting. So, by attempting to bail out those subprime mortgages, they have increased the price of oil.

If you could save 50¢ a gallon by not speeding as severely, would you?

http://www.edmunds.com/advice/fueleconomy/articles/106842/article.html

That's a good link for everyone to read. I had already seen something similar and #6 was the only one I hadn't been doing. I now turn off my truck at the ramp when unloading and loading the boat at the ramp as well as some other times when the opportunity presented itself, which is usually when you don't want to have to.

The demand factor is huge. The population of the earth in the 1950's was 3 billion; now it is over 6 billion and is on course to increase another 3 billion+ twice as fast as it took before. More people = more use and as the developing countries become more modernize (think China and India especially), think about their impact to the demand, not only in building infrastructure, construction, etc., but the demand on food, and other necessities.

It isn't getting better. It is only beginning to get ugly. Not only do we need to rethink how we approach using commodities, but all peoples need to. Unfortunately, we in the USA have used most of the earth's natural resources than others on a comparative basis for quite some time. The others are quickly racing to match our insatiable appetite.

We (USA) cannot even cooperate among ourselves. Why would we think the rest of the world will cooperate too? It's a real global mess. I truly pray better heads prevail throughout our known world for the sake of future generations for all peoples.

I think most of us are now thinking about and doing whatever is necessary to lower our fuel expense.. I know I am and will have to continue doing to live within my means..

The real "trick" hear I beleive is that some folks have figured out how to manipulate the rate of exchange (Dollars to Euros) and the market between Europe and the USA and that is actually what has driven up the price of oil. These folks are coming into the US market and buying options on the up side of the price of oil then going to the European market and manipulating the price to there strike price in the US on the option trade and making a killing. That has got to be illigal or some sort of insider trading in my book. I printed this article at work and let some of the guys read it. A lot of them including me think that there needs to be a federal investigation into the dealings at Goldman Sachs and laws should be inacted immediatly to stop folks from doing this.
I am a conservative, formally in a family business and I firmly beleive in a free market, but in my book this shouldn't be happening, supply and demand ought to be the only controlling factors in this market, not some way to flim flam the world to make a fortune.
My two cents.