I was watching the news this morning and they had a story on about the decrease in demand for gasoline. In April 2008, Americans decrease the miles driven over March 2008 by 400 MILLION miles. Over the same time last year, we drove 1.4 BILLION less miles. Overall, inventories have increased 2%. This is the first increase in 17 years.

This is proof in the pudding that the classical rules of supply and demand are no longer present in oil market. They can "claim" all they want that it's China and India's fault, but I don't think they can have an instantaeous impact, like the oil companies would like us to believe. Case in point, if all the increase supply created by American consumers was now going elsewhere, then we would not see an increase in inventories. Market manipulation is in play.

I also saw another story about how food companies are not increasing their prices, but they are reducing their package sizes. A cleaver way to trick the consumer into thinking that they aren't paying more, but obviously they are, because they get less for the same price.

I know that people are hurting in this country financially, but in a lot of ways, I believe that the increases in prices are necessary to force people to make some changes. The bottomline is that the American way of life is not sustainable. I argue in business all the time that the global economy is not sustainable. The increase margins company receive by using cheap labor, will eventually get eaten up by increases in fuel costs. All of these years of hearing that we don't need government intervention and that the market will decided has finally come to reality. We are going to be forced to consume less, and to me, that is a wonderful thing.

All of the changes that I have made in my life for ecological reasons, has had a positive impact on my family's economic situation. In the future, we will no longer ask the question, "what are the costs of going green?" The new questions is "what are the costs of NOT going green?"

Not going green is a good question because if the oil companies will not compete against each other, then it is time to compete with alternatives and renewables.

The 1.4 Billion less miles driven comes from Trucker Log books. That means there was a significant decrease in commerce by highway. Could be railroads are seeing an increase in hauling but not if the manufacturing base is lowering. I bet railroads are hauling alot less automobiles out of Detroit these days but not from the docks as the imports come in.

Price per barrel is creaping up towards the 135 mark today while the dollar is still losing value. The Street is reacting by selling off, again, so much for stability.


http://www.bloomberg.com/index.html?Intro=intro3

They won't be able to claim it's China's fault for long. China is raising prices in a deliberate attempt to cut demand.

Excellent! I think that China has an increased demand for power that is far greater than the increased demand for gas. They are building everything for us now. I seriously doubt that working in Wal-Mart's sweat shop has greatly increased the standard of living for the average citizen.

Lnk: http://uk.reuters.com/article/hongkongMktR...G15945620080620

It looks like the winners are the oil companies in China and the losers are everyone else. Sounds like they are learning some lessons from our markets.

This is a new age of commerce for China. They are learning about inflation, trade balance and fossil fuel demand. To conserve fossil fuels, price is a factor. Diesel and gasolene were subsidized in China making for a kind of artificial demand by lowering the price. That condition has been corrected through using the United States as a bad example. Excessive inflation leads to recession, so if our demented leaders have been conserving fuels through price in a time of two wars in the middle east, we have been taken for the benefit of a few One-Percenters not reinvesting that money in alternative, renewables or new supplies from less volatile regions of the world, Alaska would be a shortterm fix discarded several years ago.

I remember hearing my righty friends say that if the war in Iraq would push gas prices down to $0.40 per gallon, then they were all for it. That was never ever the intention.

It's heart breaking to me to think about all the money wasted in Iraq. Imagine if he had spent all of those dollars investing in alternative energy technology. We could have solved the problem. Oil is a national security liability. How good would it have been for our economic future for us to be the ones to solve the problem and own the patents? We are missing an opportunity!

Yea, I can actually give you a true life story on that one. During the Fall 2004 election I needed to fill up my home heating oil tank for the winter. I usually buy pretty early, like in summertime, if I am able to do so. Anyhow, I called my supplier and asked for price on a full fillup of 250 gallons because there are quanity discounts to consider.

Well now, this here dealer told me the price and then added. We are advising our customers to wait until after the election because we expect prices to decrease. I made an instant decision and told them to deliver 250 gallons that week. Now why did I do that ? That's because continued volatility in the Middle East would raise prices in the shorterm not lower them. An expected re-election by Bush and Cheney would only raise prices by the sable rattlers remaining in office.

Now, I would have to check my records and the market but I think, that was the cheapest price I have paid for home heating oil in the last 4 years. Being that I am retired/disabled but with an income above the cutoff for fuel assistance, I had to borrow money last season to fill my tank. Just no saving money on a fixed income. While the rich get richer, the poor get poorer, the disparity of income deal. All I can say is that if utility companies shutoff people that cannot afford to pay their electric bills, those utilities companies better make damn sure there is no one in that home who is dependent on electricity for apparatus to keep them alive. Pencil pushers hardly ever consider the human condition.

Bush and Cheney lied to me personally.

Darn, double post again. So let me add that the failures of oil companies to drill on pre-existing leases is interesting to me too.

They also got a bunch of new areas opened up in the Gulf of Mexico as recently as 2006.