Friday, December 5, 2008
When's The Parade For Oil Co. Executives?
It was only last summer when the likes of Hillary Clinton and Chuck Schumer were railing against the evil oil companies and the men who run them. There were calls for windfall profits tax and charges of collusion to drive prices higher. Oil was at $149 and gas was over $4 at the pump. Hysterical politicians were talking about $200 oil and $6 gas. According to democrats, it was a clear case of Big Oil sticking it to the American consumer. Of course, it was all nonsense and in reality purely a function of supply and demand. It was and oil has since dropped to $41 with gas under $2. So here's my question. If the evil oil company executives do control and manipulate the price of oil, how come it's dropping like a stone? Could it be a world wide recession has dramatically reduced the demand for oil and speculators have been run out of the oil market? Once again, democrats prove to be political demagogues with no concept how the world really works. Glad they're in charge for the next four years.
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3 comments:
Jim, your arg is solid but was this blame game only played by dem politicos?
I'd be more willing to deny collusion among the oil companies if the price per gallon had not been so often identical (down to the 9/10th of a cent)irrespective of the gas station. And gas stations managed (somehow) to keep in step despite frequent daily adjustments.
Maybe when prices per bbl are unusually high, there is more agreement among distributors? When prices per bbl are unusually low, economic Darwinism takes over?
Got no clue.
Jane,
The tenth of a cent pricing was a joke when gasoline was selling at 25 cents per gallon and it is an even worse joke today. For a one thousand gallon per year user, a tenth of a cent amounts to one single buck!
The pricing problem with gasoline stems from the fact that it is the most widely advertised commodity of all with large signs everywhere. Retailers simply have to stay competitive in down markets and hope to make up losses in up markets.
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