The real reason for high gas and diesel prices

There are some that had bought in to the many lies about "supply & demand" and how we are running out of oil. Here is an article that supports what I have been saying on the topic. There is PLENTY of oil, we even EXPORT some of it daily to other countries as part of our trade agreements.
Read it and weep, imagine prices dropping in half overnight!

"Dan Dicker, who has spent nearly three decades in the oil market, has a profoundly disturbing explanation of why the price of oil, and the gasoline that comes from the crude product, has risen so dramatically in recent months. It turns out, Dicker says, that the price has nothing to do with supply and demand for oil. It's the financial market for oil, filled with both professional speculators and amateur investors betting on poorly understood oil exchange-traded funds, who have ratcheted up the price of gas to such sky high levels.

"There is no supply issue going on here - what you have is the perception of the possibility of a supply issue," Dicker says. "A whole bunch of people are pouring money into an oil market trying to take advantage of what they perceive to be a real risk in supply. It's a marketplace that I argue should not be allowed to be wagered on like a stock or bond."

Dicker notes that Libya produces only 1.3 million barrels of oil a day, just a tiny fraction of the world oil market. Even if Libyan crude were lost to the world market in the current turmoil, and there is no sign that it is, Saudi Arabia has 5 million barrels a day to use in case of an emergency.

Dicker, who has just published a book called Oil's Endless Bid: Taming The Price of Oil To Secure Our Economy, makes a strong case that if the government stepped in and regulated oil trading so that only investors with a genuine interest in the physical product, such as airlines and heating oil companies, could buy and sell oil futures, then the price of oil would fall by 50% overnight and our economy would be much better off."

I factor in that high gas prices is the only way people will buy the high dollar hy-brid or all electric cars. Government Motors has alot of Volts to unload !

730, I agree 100%. The price is driven 100% by speculators, hoping to make a few dollars from others fears. The potential supply far outweighs the demand. Take the speculators out of the equation and gasoline would once again be at $1.00 per gallon or even less, and diesel would once again be more economical to purchase than gasoline.

It seems that diesel prices didn't pass gas until everyone that had a small trailer and owned a pickup bought a diesel pickup too. Sure seems to me that there is a lot more diesel daily drivers than there was 10-15 years ago.

History has it that diesel was similar to lobster in that it was discarded before folks found a need for it.
I don't mind paying a little extra for a good lobster. It is a decision that I make, not something that me and every other driver MUST purchase in order to go to the jobs that are left in this country.
They have told many lies about diesel in an attempt to justify their greed. I read not so many years ago that as more people began to burn diesel, the price would slide down as a result of economies to scale - Bull Shift!!!) There are more diesel users today than ever before but the price is HIGHER than gas, which is higher than it should be.
I realize that the very small percentage of investors that are reaping benefits from this greed are happy as a baby with warm milk, but it is at the expense of the nation's economic recovery. Sounds like another "Roman Empire" decision if you ask me.

I am a self employed ag mechanic. These fuel prices have me charging the customer extra just to pass on my costs. I'm afraid it will get to the point where it will cost me business if this continues. Its not fair for me to have to charge them but then again its also not fair for me to have my familys vacation and other extras cut short by someones greed.....

Unfortunately the whole country is in the same situation as you are. Those who can't increase their incomes will get squeezed. In the mid 1970's it created a situation of a stagnant economy and rapidly rising priced nicknamed STAG-FLATION.

How the retail price of gas and diesel is determained is a VERY complicated topic.

Several things I do notice though.......

No one complains about how oil speculators are driving up the stock market when it helps their 401k.

No one complained when BP and Exxon paid out billions with a B.

Very few really let the price of gas affect their driving habits or the car they buy.

John in La,

I already addressed the "Roman" factors surrounding this.
There will always be folks that will not complain as long as their bread is getting buttered. But we have a large middle class sector that was doing good to break even BEFORE the gas prices spiked. Their trip to work and church now cost them money that they just do not have.
And remember, few employers are going to give them a raise to help them. Many employers are looking for ways to cut wages, not increase them.
Trust me, the rubber band will finally break and the "Romans" will not come out as good as they think, even having most of the dollars.

I have said on these forums many times , fuels of ANY kind and food sources of ANY kind should be prohibited from being traded on the market. Think oil trading is a problem? Wait 'til they start the same thing with food source commodities. Back in 1976 , the price at harvest time for navy beans skyrocketed from a norm of $16 - $20 a hundred wt. to over $57 !!! Never before and hopefully never again. It was short lived but many a new tractor was bought that year! If this kind of freinzied trading goes rampant in commodities like it does oil , you could pay $6 per gal for milk one week and $2 in a month or so. Natural resources and food products have NO place on the stock market... Heaven forbid those fat "pretty boys" ever have to work for a living.

Yeah, nothing new here. Our current outstanding leaders in Washington were bantering around the idea of limits on the way oil futures are traded but I don't think anything came of it. Big surprise.

(quoted from post at 18:27:19 03/28/11) I have said on these forums many times , fuels of ANY kind and food sources of ANY kind should be prohibited from being traded on the market. Think oil trading is a problem? Wait 'til they start the same thing with food source commodities. Back in 1976 , the price at harvest time for navy beans skyrocketed from a norm of $16 - $20 a hundred wt. to over $57 !!! Never before and hopefully never again. It was short lived but many a new tractor was bought that year! If this kind of freinzied trading goes rampant in commodities like it does oil , you could pay $6 per gal for milk one week and $2 in a month or so. Natural resources and food products have NO place on the stock market... Heaven forbid those fat "pretty boys" ever have to work for a living.

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You hit the nail squarely on the head!

How is the US government making a law going to affect a WORLD market?

If oil is $103 here, it's $103 in China, Brazil, Russia... everywhere!

We can't just stand up and say, "Oil's only $52 now cuz Uncle Sam sez so." We'll have a supply problem by the end of the afternoon.

Oil prices are certainly caused by wild speculation, but there's no law the US government can make that will fix it.

What do you mean there is nothing the gov can do to get the prices down fast. I remember Pres Clinton coming on TV and saying the high prices where not justified and if they don't come down soon he would dump the oil reserves on the market. I can't remember how much they came down but it was quite a bit and it came down by the end of that week. Hasn't been a Pres. since that has done anything about this problem.

(quoted from post at 14:19:20 03/29/11) What do you mean there is nothing the gov can do to get the prices down fast. I remember Pres Clinton coming on TV and saying the high prices where not justified and if they don't come down soon he would dump the oil reserves on the market. I can't remember how much they came down but it was quite a bit and it came down by the end of that week. Hasn't been a Pres. since that has done anything about this problem.

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I remember Clinton doing that, but you can bet the current administration will not do the same thing. That guy wants to buy oil from Brazil.

"makes a strong case that if the government stepped in" They stepped in during the 70's. How has the Department of energy helped matters? If anything Government regulations have compounded the problem.

I was looking thru fuel receipts a couple nights ago - #2 diesel was $1.79 a gallon in Missouri in April of 2009.
There is no reasonable explanation of a 100% increase in (2) years other than GREED.
Most of the commercial trucking is independent in this country.
There needs to be a shut down of commerce with drivers locking up their rigs for 24 hours as a protest to #2 diesel prices.
If this happened in any major markets, prices at the pumps whould drop immediately - if not sooner.

Until deregulation in the 80s, there were limits on who could do how much trading in the futures markets. Unless you were a significant producer, processor, or user, you cold only do so much trading. If you owned an oil company, a refinery, an airline, large trucking company, railroad, etc., you could play the markets. That kept the prices driven squarely and nearly exclusively on supplies and demand.

The Dep't of Energy was supposed to drive development of alternative fuel sources, so we wouldn't have to buy so much oil off everyone else, not drive down the cost of oil.

Yet those people with retirement and pension funds. We don't mind seeing our assettes increase with oil stocks. In order to keep up with inflation. And to make up for losses in banks, realestate, tech bubble etc.

(quoted from post at 08:32:20 04/05/11)
Yet those people with retirement and pension funds. We don't mind seeing our assettes increase with oil stocks. In order to keep up with inflation. And to make up for losses in banks, realestate, tech bubble etc.

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It works both ways. Some folks are still building their retirement funds, but because of these high fuel prices they can no longer contribute any more funds to the retirement package.

You hit the nail on the head here! Bravo and I agree totally with you!