<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by HUMMERDOGG:
Price is merely a reflection of supply/demand balances regardless what anyone says. </div></BLOCKQUOTE>Dogg, respectfully this is simply not true. When the price at the pump can be raised due to the fear of future "production" disruption, this is not being controlled by supply/demand.
When Opec can artificially control the price/barrell by lowering production, that does not follow typical supply/demand. World supply has not magically jump 100% in 4 years yet prices at the pump have, with nothing but "fear" from the war as the reason for the increase.
Any other business that saw a 100% increase in retail cost in such a short period due to supply/demand would have experience a shortfall in product available, which would cause the increase. We have had no gas shortages. Even when Katrina hit there were no shortages due to supply. The only shortages created were due to lack of electricity to fill the trucks so they could get to the stations. The facility here in MS had enough to continue it's normal supply for nearly a month without any additional refining. This why the release of strategic petroleum reserves was just not a big deal and would have very little effect.
Speaking of 4 years ago. That was after all of the mega-mergers of the oil companies took place. The industry was found to have been price fixing even then by cutting refining production and holding back delivery of produced fuels to get prices higher. Again, in 4 years demand has not increased 100%, supply and prices are being controlled by the fewer larger, merged oil companies just like OPEC can control the price for a barrel of crude. In the US, though, we have anti-trust laws to supposedly guard against this.
Whether collusion is occuring amongst the major oil companies (I wouldn't be surprised) is one thing, but price-fixing is definitely occuring and it is totally and completely outside the parameters of common supply/demand.
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