Oil Barrel Prices Between 1970 and June 2008

[Vercingetorix]

[Martin2]

Gee, thanks. I need gas today or tomorrow, and I know it is going to hurt.

[mwhities]

Maybe we'll all luck up and there will be another oil crash. Even if it is for a few years. (I hope.)

[moosicman]

Yeah, how do we cause an oil crash!!!

[matt151617]

Originally Posted by moosicman

Yeah, how do we cause an oil crash!!!

Stop using it.

I doubt you'll see any reduction in price... especially when the oil companies reported $460 billion in profits since January 1st.

[USF_Diver]

Looks like alot of stocks prior to the big tech bubble burst.

[cgvmer]

So if the cost of oil was $60 a barrel and the oil was 40% of the cost of $1.50 gallon of gas. So Oil cost $.60 and transportation and refining cost $.90. When oil triples in price to $180 a barrel we should expect the 40% of a gallon of gasoline to triple to $1.80 but the "other" cost should remain the same at $.90 so when a barrel of oil reaches $180 per barrel we should expect gasoline to reach $2.70 per gallon.........so why are we paying $4.00?

[ScubaToys Larry]

Mainly because of the devaluation of the US Dollar. If you are buying foreign product with a currency that has very little world wide value - your overseas products will cost you much more.

For example, last year when I was in Australia - it was 70 cents would buy an Australian Dollar - When I was there last week - it was virtually 1 - 1. So that means, vs their currency - the dollar has lost 30% value - so 30% of the additional money you are paying is simply that your dollar holds way less value.

Check out the trends of our currency vs the Euro, Brazilian Dollars, etc.

When we stop spending money on production of things that don't return revenue (like tanks, and bullets, and bombs, and pay for people fighting) and turn that money into things that help domestic production (build cars, factories, technology) then things can turn.

It's the basic economy 101 course - a country can produce "Guns or Butter" and unless you are selling the Guns as a product - they don't help the local economy. Because resources are spent building guns, you now have to import more of your butter - and that drives up the price of foreign butter, and drives down your dollar even more.

Now this makes it great for exporting companies - we sell more to overseas areas now as their currency will buy more US goods, and if you go to Disney you will see more foreign travelers vacationing in the US as their dollar goes farther - but if you are not in a sector that gets funds from overseas spending, and you have to spend to purchase overseas products - then it's a tough thing.

But if it makes you feel any better - the price of gas in australia was running about $1.75 - per litre... and 4.4 litres per gallon. So it's still a lot cheaper than other places.

[cgvmer]

Larry,
I agree to a point. Given the costs I refer to are in dollars, the component of that which is mainly impacted by the devaluation is the crude itself. The refining is a local issue.
Much of this cost increases are the impacts of speculation in the gas commodity markets.
When you look at that $7.7 per gallon cost of gasoline, how much is tax? Typically in Europe (not sure of OZ) the tax is 50% or more. That is how they maintain their roads.

[ScubaToys Larry]

What does it matter anyway... I've got several compressors, lot's of scuba tanks, and I'm just waiting for this baby to hit the market: YouTube - Air Car from France (1 of 2)