Thursday, July 31, 2008

Oh, really?

"Oil prices shot up Wednesday, jumping as much as $5 a barrel and halting a dramatic two-week slide after the government reported a surprise drop in gasoline supplies."

That was the lead paragraph on an Associated Press story that appeared in Wednesday's O-R. The story went on to say that the drop in gas supplies suggests that record oil prices haven't curbed U.S. fuel demand "to the extent that some energy market analysts had anticipated." Really? A front-page story in the same edition cited a Federal Highway Administration report saying that Americans drove 9.6 billion - yes, billion - fewer miles this May than in May 2007. So, clearly, demand for gasoline is plunging. Call me a conspiracy theorist, but I'm guessing the "surprise drop" in gasoline supplies was really the result of the oil companies deliberately refining less gasoline in order to create a higher crude price, which, in turn, could justify them keeping gasoline prices at their current $4-a-gallon level, or even raising them. Anyone else smell a rat here?



Blogger Ellipses said...


9.6 billion fewer miles at an average 25 mpg fuel economy = 384 million gallons of gas. 384 million x 4 dollars per gallon is just over 1.5 billion dollars (which is revenue at this point)... If we were to assume that Exxon were the world's only oil company, that would account for a little more than 1% of of it's annual revenue. We know, however, that Exxon only produces 3% of the world's oil...

A 9.6 billion mile reduction in our monthly travel is insignificant.

In March, we drove 11 billion fewer miles than we did in March 07... which was 257 billion miles. That is a reduction of 4%... considering gas prices increased 30% in that period, our consumption was declining at a lower rate than prices rising...

Sleep well, Brant... there is no conspiracy :-)


July 31, 2008 at 11:24 AM  
Blogger Brant said...

It just makes me feel better to believe the oil companies are trying to screw us. ;)

July 31, 2008 at 11:39 AM  
Anonymous Anonymous said...

Oh, they are, they are. And the government helps them. I'm surprised that the other oil companies didn't pull a "dogpile on the rabbit" when T. Boone Pickens said he is going to invest in wind power.

Brant, my brother, nothing is going to change. As gas prices rise, those who can no longer afford to drive will stop driving. Those who can pay will drive just as much. But with everything that moves or that must be carried on a moving object (like food) tied to the price of oil, we're screwed bigtime. No president, Republican or Democrat, will be able to bail us out. Unless we annex the Middle East and kill everyone there who wants to throw us out, we will never break our dependence on oil until you and I are long dead and our kids are faced with a problem far worse than what we now see.

July 31, 2008 at 12:04 PM  
Blogger Ellipses said...

So... should I max out the plastic on my bucket list and live out my days in the forest? There is plenty of room in this dynamic world... you can be bullish on oil and bullish on wind/water/solar at the same time... Do you think anyone would have guessed 70 years ago that coal would still be relevant in 2008? Oil will be a profitable business for decades to come... but there is big money to be made in alternative energies, hence, Pickens... Human beings are naturally an eschatologically obsessed species... that comes from self-awareness. The world has been on the brink of armageddon since before the term was bastardized out of hebrew geography.

-ellipses... don't worry, be happy

July 31, 2008 at 2:08 PM  
Anonymous Anonymous said...

Until your children die a horrible, oil-slicked death in the Petroleum Wars of 2056. :)

July 31, 2008 at 4:26 PM  
Blogger Ellipses said...

2056? Will there still be oil then?


July 31, 2008 at 4:57 PM  
Anonymous Anonymous said...

only Mazola

July 31, 2008 at 8:01 PM  
Blogger Ellipses said...

Not if we use all the corn for ethanol :-)


August 1, 2008 at 8:06 AM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home