The base price of the commodity (crude oil) is set by a world-wide market that has fluctuated hugely in the last ten years- something like $12-70/barrel. Take a look at this chart:
http://futures.tradingcharts.com/chart/CO/M The last three years have seen steadily rising prices for crude. Is lack of competition to blame? Consider that OPEC alone controls the lion's share of crude, yes, I think that's fair to say, but that is reality. What interests me is gasonline prices, not crude prices. Check out this chart of U.S. gasoline prices, both in real and inflation-adjusted dollars: http://inflationdata.com/Inflation/images/charts/InfAdjGas1918_2005.gif Apart from the OPEC embargo-induced gas crisis of the 70's and the price bump in the 30's we've been on a downward trend in inflation-adjusted gas prices since cars were invented. Only in this period of the last three years with rising crude prices have we seen rising gasoline prices (in inflation-adjusted terms). That's a remarkable track record for an industry that is constantly inventing more complicated and expensive ways to extract oil from places we previously could not get it (e.g. the Gulf of Mexico). The good news- it looks to me like the $3.00 spike is gone and things will return to the previous slow growth in prices of the last three years. The bad news- continued booming Asian economies will create a bigger and bigger demand for oil, and prices will continue to rise. The only ways out of the cycle are for us to use less energy or find alternate sources for our needs. >On 11/8/05, Robert Munn <[EMAIL PROTECTED]> wrote: >> The price of crude oil has gone up because of increased worldwide demand, but >> that is only part of the story. The price of gasoline has gone up because of >> a >> worlwide shortage of refining capacity. The hurricanes in the Gulf did a lot >> of >> damage to refineries in the region, further limiting capacity and causing a >> very >> large short-term spike in gasoline prices. > >Personally, I only buy this argument after acnowledging that the root >cause of these problems (refining shortages, supply/demand issues) is >lack of competition. I think that there are too few companies in >control of too much supply. They really have no incintive to adjust >prices or be competitive simply because they don't have to. > >-Cameron ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Discover CFTicket - The leading ColdFusion Help Desk and Trouble Ticket application http://www.houseoffusion.com/banners/view.cfm?bannerid=48 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:180479 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
