Originally Posted by Michael Beard (Post 416669)

Question the premise. Look beyond gas.

While increased supply and lower prices would be great for everyone, the idea that gas can magically be $2/gal again is a dream. The profit margin on gasoline is about 8 cents per gallon. They could lower prices $.08/gal, basically giving their product away, and any market fluctuation would make them go from making billions to losing billions in a heartbeat. When you're selling billions of units of any product, you're *going* to make a lot of money.

The real culprit of high prices: The Federal Reserve. It stuns me how many people don't know that the Fed is NOT a government-run agency. The Fed has been pumping a STAGGERING amount of unbacked currency into the system starting out with $3 Trillion in "stimulus" and then hiding an additional $1 Trillion per year right out in the open under the name "Quantitative Easing". Maybe the public would pay more attention if they called it counterfeiting. We are essentially buying our own debt. The devaluation of our currency through the massive increase in the money supply causes prices to rise. It's called inflation. Anyone that actually shops knows that the CPI measurement of inflation is as bogus as what they call "unemployment".

The only reason we haven't gone completely over the cliff is that the funny money on the books has been bottlenecked in the banks. Banks get money from the Fed at near-zero interest, and sit on it for a 3% return. They have no incentive to lend. If the Federal Reserve turns off the spigot, the markets will crash. If banks let the money supply spike out into the public, hyperinflation destroys the economy. If the Fed doesn't stop manipulating our currency, other countries may stop lending to us, credit rating gets downgraded further, interest rates rise, and destroys the economy. Probably the only thing keeping everything going right now is that other countries are doing it too.

Quite frankly, I don't see a way out. The math doesn't work, and no one's really interested in actually fixing the problem. It needed to be set on the path to be fixed a dozen years ago.

Originally Posted by John Kissel (Post 416699)

As far as crude being marketed as a commodity, I have never understood, and my heating oil dealer told me a few years ago, their org. was trying to get it so that only those in the oil business could buy and sell crude. Home heating was $3.41 last week, Shell 93 was $3.75, and Hess 93 was $3.57 this week. Then add in Lucas fuel treatment so we don't have problems.The other stuff won't start a brush fire so I don't mess with it. Care to guess why my days of riding up and down the highway to race are over??? John Kissel

Originally Posted by Ed Wright (Post 416715)

That is most of it right there. Traders.

Originally Posted by FINESPLINE (Post 416776)

That is the problem. Oil as a commodity being traded by people on paper. There should be a law that for you to trade oil you would have to be able to delivery of the product.