$2 gal fuel? TOLD YOU SO
Not to toot my own horn too loud. Just over two years ago I posted that $2 gal fuel could be coming. I linked to an oil industry trade journal showing potential huge price drops in fuel related to th...
Forum Discussion
It is totally a supply issue. Oil has a very in-elastic demand curve meaning no matter what the price the demand for it changes very little. Think about it, even if it was free, you, me and most every other person and business in the world couldn't really use much more, at least in the short to mid term. Eventually we could all buy gas guzzlers, change all our electrical generating to oil etc., but that would only happen over many years if we even wanted to make those changes.
There are political and macro economic considerations, but they are secondary to the fact that there is more oil available than we can readily consume at this particular time, hence the price falls in a desperate attempt to get people to buy more, with very limited results, hence we get prices spiraling down until they reach the point that production is more expensive than the revenue sales bring in and the producers stop producing creating a shortage and an upward spiral until production is brought back on line. Simple economics, no republicans, democrats, whigs or torries needed.
There are political and macro economic considerations, but they are secondary to the fact that there is more oil available than we can readily consume at this particular time, hence the price falls in a desperate attempt to get people to buy more, with very limited results, hence we get prices spiraling down until they reach the point that production is more expensive than the revenue sales bring in and the producers stop producing creating a shortage and an upward spiral until production is brought back on line. Simple economics, no republicans, democrats, whigs or torries needed.
