Thread: Gas prices drop

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Originally Posted by ford2custom

This will undoubtedly spin off onto another point since I don’t claim to be well versed on goods, product demand I just know that the price is way up when the barrel of oil goes up but it doesn’t come down when the price of oil per barrel falls to almost half from a few months ago. Set me straight I do not take offense when you know more then me, I just get some quick knowledge.

Richard

That's why I like "conversing" with you Richard.

We could get into a long discussion that probably would bore most everyone. For some reason economics doesn't enthrall a lot of people in our country. One election year example is how many people buy into the BS that any President of the US can "create a job". Or maybe that should be "real job", they do employ a bunch of political hacks for a while.

But briefly, commodities almost always follow a "rocket/feather" pricing scenario. The retail prices go up like a rocket, and fall like a feather. Someone mentioned earlier (robot I think) that retail marketers have to work through their inventory. On the way up they have to anticipate future pricing and build in enough profit to be able to buy the next quantity of inventory. On the way down theY're stuck with the higher priced inventory until they can move it. Figuring out how to maintain a balance between pricing/profit/sales can be a real bitch for a business owner who wants to survive in a volatile market. Gasoline is pretty emotion inspiring, so let's bring up something else. Been in a hardware place to buy copper piping? Copper prices, like most commodities that are reacting to economic slow down, are falling, but the pipes on the rack are still at the same high price they were months ago. Again, working off the higher price inventory. It would be the same for steel, aluminum, and on and on. There's also the matter of finding a price point that the market will bare, and the effects competition has on that, but that's a whole 'nother discussion.

As for regulating the price of gasoline we've been there, done that, in the late '70s early '80s. Just like in most things, when the government steps in and quashes the free market prices climb and supplies tighten (often resulting in rationing). When oil prices were deregulated in '82 or 3 those politicians that favor big government meddling were predicting immediate price "gouging". Of course they were wrong and prices dropped, and dropped, and dropped as supplies increased (competition almost always improves the breed) to the point in the 1990s where we were "spoiled" again. That's why just the "threat" of our drilling for more oil caused the "speculators" (those who make buying decisions on how they guess the future pricing will be) to bid down the future pricing of oil. Then the awareness of global monetary tightening added more fuel to the fire (pun intended ). But then, you're a speculator, so you know that. Government meddling that blocks the exploration and production of a known, highly efficient, infrastructure already in place energy source can only be harmful to our accessibility and ability to pay. Add to that the waste of tax dollars in search of a silver bullet alternative and the hidden cost rises as well. The more we disincentiveize our job/wealth producers, and the more uncompetitive (with the rest of the world) we make ourselves the worse it will be for our jobs market and economy (which are tightly intertwined). Which brings me full circle back to the comment about Presidents don't create jobs, they can only be part of the incentive/disincentive component of the equation. Those evil corporations and "greedy rich people" are the ones with the track record of job creation. Political blustering to the contrary should be labeled as what it is...........................a lie.