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BobLfoot

Major Tangent - Read at your own Risk

39 posts in this topic

I've been programming computers for 30+ years and PLC's for 20+, but I am still puzzled by seemingly simple economics. In the past month I've seen gasonline prices go from $3.25/US Gal {$0.86/liter} down to $2.18/US Gal {$0.58/liter} without any major increase in supply or decrease in demand. Like to know what puppet puilled the strings. Only thing I can figure is with elections coming in November the ruling party wants low commodities prices for consumers. Others please share your wisdom this one really puzzles me.

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Prices historically go up every spring right before memorial day and historically go down every fall right after labor day. This has been happening for years, and it hasn't mattered which party is in the WH. One thing you can count on - with the explosion of new drivers in China and India and the escalating demand those countries are placing on the world oil supply along with North America's (all of North America, its not just the US) unslakable thirst for oil, prices will never go down to the levels we saw just a couple of years ago. It will fluctuate, but the overall trend is always up. Here is something some environmentalists have to say about it to put it all in perspective. http://commonsblog.org/archives/000666.php

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I personally think it is all just a game, that the Oil Industry and The Government plays with us. Like How many barrels does the US alone have in reserve and what was payed for those barrels and why when the cost/barrel gets so high cant We use from the reserves, something somewhere there has to be a way to stop this Madness

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It is the traders that buy future gas that bid up the prices. There were many traders willing to buy oil at $70 a gallon just in case the price of oil when to $80. The prices the traders are willing to pay will always lead the real price of the commodity itself. These higher prices are passed on to you. A few years ago we did a project for a company that makes french fries. We were told the most important person was the one who bought the potato futures or potatoes in the ground or even yet to be planted. This way they are guaranteed a potatoes at a set price. This can be handy in case there is a crop failure or some infestation.

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What about the oil field in Alaska? I think it is still shut down but yet the prices drop. Same thing with the refineries that were damaged during last year's hurricane season. Not sure they are running at full capacity . All very interesting.

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I heard, though I can't back this story...I tried to DIGG for it, but couldn't... Anyway I heard, that the big three are hurting really, really bad on SUV sales. And they have enough influence in the oil company execs to lower prices so the big three can unload SUV's that are sitting on the lots.... again, that was all hear say.....just what I hear from talking with some big wigs. I am totally BAFFLED at this price drop as well. Makes you wonder just how thick those oil execs wallets got over the summer....don't get me started....

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Just means they have money to spend on new controls engineers and systems. Seem to recall a posting for techs in tulsa at an oilfield. LOL

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What I have heard is this: There are several reasons for the oil price dropping. The most important one is the ABSENCE of hurricanes like the ones that interrupted the oil production in the mexican gulf last year. The traders had factored in that there should have been some hurricanes by now. As there has not been any major hurricanes, the oil prices drops accordingly. Unless someone invents cheap and reliable cold fusion for everybody, then I aggree that in general the oil prices can only go in one direction: UP.

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Just curious Jesper what does pertrol cost in Hamlet's country?

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It used to be 10 Kr/liter = 1.70 USD/liter Now it is 9 Kr/liter = 1.52 USD/liter. Diesel/Heating oil is approx 8 Kr/Liter =1.35 USD/liter

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Must make the sub USD prices per liter I listed seem like heaven? EH?

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Not really. I believe that everything is interconnected. The high prices are mostly due to government taxes. I do not complain, because I realise that it is for the better of everyone. I am forced to use a fuel-efficient car, but that is not really a handicap for me, as I am not as car crazy like some people I know. A recent "cool" trend over here is to drive huge 4-wheel-drive SUV types.There are not many, but enough for one to notice it. I wonder where this strange fad is coming from, eh ? At least they have to pay extra big bills for gas and environmental taxes.

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...and look for parking spots big enough

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About the big three, why is it over the last 10 years cars gas milage has for the most part remained the same? I definitely think they are tied to the oil companies. My 10 year old pickup gets the same gas milage as a new one. What if we sold service like this? Here, buy my product, but the only thing you are going to get is shiny paint and a comfortable operators chair. Production will remain the same. We would get kicked out of the owner's office before the second hand moved on our watch. I don't mean to offend anyone that works for the big three, I just wonder if they are giving us a trully advanced engine/drivetrain. We have all heard the rumor before about someone recieving a car that gets 50mpg when it should only get 20 and the dealer mysteriously tweaks the car and now it get's 20. Those stories are always he said she said. Enough rambling-how about that cold fusion. Well, maybe we should start with hydrogen.

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Because until recently, there hasn't been customer demand for fuel efficent vehicles in the US and why spend precious profits on R&D when your customers weren't looking to buy it. (interesting, never heard the 50mpg story). Take Ford for instance. Ford has two assembly plants on one site in Wayne MI; Wayne Assembly that builds the Focus and Michigan Truck that builds the behemoth Navigator/Expedition. Until recently, MI Truck was the only assembly plant running 3 shifts, 20 hours a day, 6-7 days a week because they couldn't keep up with demand. Yet the Focus was not profitable and was only made available because in green states (California) the auto makers can only sell a gas guzzler if they also sell a corresponding quota of fuel efficient cars. So, the product development money kept going back into the products that had an immediate return on investment (SUVs with lots of creature comforts) and cars like the Focus didn't change one iota but had to be still made. Now, of course, all 3 companies were caught with their pants around their ankles when gas prices shot up and nobody wanted a big SUV. DCX has a slight leg up because they've been utilizing some fuel savings technology their parent company Mercedes refined in the 1990s (the ability to run on fewer cylinders AND actually save fuel) and they put that in their best selling 300c with the Hemi. The other two are playing catch up. Thats been my take on it but of course I'm in the middle of it and sometimes the forest can't be seen through the trees. Edited by jstolaruk

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Apparently Cadillac tried this some years ago. I did a quick search on it and found a lot of disscussion but not many facts.

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Yeah, its an old idea, but I only know of Mercedes that stuck with it and made it work for the consumer automotive market.

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I own an Opel Astra which is almost like a Ford Focus mentioned in the post above. I use it mostly for commuting, and I get an average 15 Kilometers per liter. You have to figure out what that is in Miles per Gallon. :) Edit: Some popular small cars over here achieve 20 or even 25 kilometers per liter. Edited by JesperMP

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If my conversion is right, thats about 35mpg; not too shabby! 25 km/l would be a huge 58mpg!

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That 25 km per liter is for a VW Lupo with a special turbodiesel engine. It is rated at "3 liters per 100 km" but the 4 liters per 100 km is more realistic. The car is relatively expensive because of the engine, but on the other hand it is granted extra government tax reduction because of the extremely low fuel consumption. So I see quite a few in the streets here - but not as many as the SUVs though. The point is that such low fuel consumption is possible with todays technology. It is 'regular' small car.

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My calculations are a little higher. But maybe I'm doing it wrong. Where is Alaric when you need him?

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I used 0.621 miles / kilometer and 0.264 gallons / liter. So: ( 15km / L ) * ( 0.621 / 0.264 ) = 9.381m / 0.264g = 35.284 miles / gal Edited by jstolaruk

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We have all heard the rumor before about someone recieving a car that gets 50mpg when it should only get 20 and the dealer mysteriously tweaks the car and now it get's 20. Those stories are always he said she said. This was a quote from my previous post. Sorry my quoting didn't work correctly. Throughout my life from time to time I have heard people say that someone they know has bought a car in the past and the thing got an astronomical amount of mileage per gallon. I usually hear like 50-60 miles. Then they go to the dealer and tell them, which they immediately ask to see the car. When the customer recieves it back it magically only gets it's rated mileage. Now the best part is when you ask them who this person is so you can speak to them, it's always like their aunt's neighbor who recently moved to Antartica. Needless to say it can't be proven and I would like to think of it as an urban legend. Maybe I should report it to mythbusters. (Good show by the way)

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My 1987 Volvo 744 (yeah, just left university, can't afford anything newer) does about 0,9-1,0 l per 10 km (that is 23-26 mpg for you over the pond). That is seen as more or less lousy over here. Actually, all of it isn't petrol, as I usually mix about 15-20% E85 (85% ethanol, 15% petrol) in it. The car actually drinks a little less gas with E85 mixed in, even though the energy content of ethanol is lower. And as petrol is about 10,50-12 SEK/liter here, and E85 costs 8-9 SEK/liter, I save about 0,20 SEK per km... :) E85, by the way, is becoming more and more usual as a fuel over here. Still, when the car finally dies on me, which probably won't last that many years as it's quite rusty, I'll buy me a new one, a really small, efficient one.

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Amazing how so many bright intelligent people could be stumped by a question like -- Why is the gas proce where it is?

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