Oil is approaching all time inflation adjusted highs of $100/barrel?

Question

...yet gas prices continue to lag behind and oil companies are making less profits than before. This is due to lower seasonal demand for gas-which is normal and expected. This proves the high gas prices after Katrina was due to high seasonal demand and higher demands from displaced New Orleaneans. But when it get to summer '08 (assuming oil prices are the same or higher), certainly the libs and economically uninformed will claim "gas gouging"!!! Why no uproar now? When will people realize that simple supply demand and free market forces create the price you pay at the pump?

fathead-I know the price is nearly $100/barrel, however the all time infaltion adjusted high is something like $120/barrel in the early 80's, thats what I meant.

And to those throwing around childish insults, grow up. Or get out of the thread. You make yourselves look even more ridiculous (if its even possible).

Answer 1

It's not /simple/ suply and demand. There's suply of oil, but speculation also factors into it, and refinery capacity has been a really issue in America, too.

The key to understanding it, though, is realizing that oil and gas are fungible commodities. There is no way for a company to 'gouge' as prices, if they did, a competitor would undercut thier prices and take away all thier business.

Answer 2

True, in the 80's there was a spike in prices that we haven't yet reached in inflation valued dollars....yet! Why we have had so much inflation is another story for another time. But undoubtably the price of fuel is now generally higher over a much longer span of time than ever before. Price in the 80's was a 'smash and grab' situation, but now it's more like being nibbled to death by ducks. I'm always stunned when people blame the non-existant 'libs' for such a wide variety of sins. (...the libs will claim 'gas gouging') Even the most well constructed strawman must have a virtue or two, but not this one. The right wing talk show bozos have made this particular strawman enemy bullet-proof. You can accuse the 'libs' of any crime, belief, thought or error in judgement and the ditto-heads will believe every word of it. But let's get back to the antics of the Oil Mafia. Yeah, they gouge, skate on taxes, hide money in various money laundries, bribe government officials when ever they can, accept the most transparent of tax breaks and subsidies from their congressional cronies and deliberately squeeze their product to make a few, or a few billion, extra bucks. Hey! It's business! Simple supply and demand would be a nice thing, too bad these Oil Mafia godfathers have left that concept behind along with the 'free' market'. These bums, with the blessing of the Bush Junta will ratchet up the price of a gallon of motion lotion to the point where the public begins to demand that 'something be done'...at that point the price will drop a few percent for a period of time. Not quite as low as it was before the last rise though....and the next rise will take it a penny or so above the last rise. What a deal. Al Capone should have had it so good! At least let's understand that we're getting hosed, but do we have to have people actually side with the guys doing the hosing? Get back to me on this!

Answer 3

Hey fathead (I hope I don't get reported for calling you that hah!)

I think he means the current dollar price of oil is an all-time high even counting historical prices in terms of inflation and dollar purchasing power.



Now to the asker's question, these "market forces" are not profit gouging as the economically uninformed claim nor are they actual "market forces." A major part of this equation is the dollar's slow-motion collapse.

I know what you're thinking, next summer's gas prices are going to be $3.70 - $4.00 a gallon based on seasonal demand & today's prices and you're trying to point out that there's a lag in the crude price & pump price based on seasons. I just wanted to add that some of these "market forces" are indeed political and show the consequences of government that spends a lot of money.

Answer 4

Supply and demand is the answer. The reason there is still no uproar is because oil is still cheaper here than in most European countries.Although, I believe we will catch up soon enough. Oil is on the marketplace, and congress has no, and shouldn't be allowed any, control over the market. We probably will run out of fuel or have our fuel supply cut off within my lifetime, so my hopes are on the brilliant scientists and engineers to develop a replacement.

Answer 5

That "adjusted for inflation" is a lie.

I had this discussion with the Sunday radio syndicated money show host, something Brinker (close). He made a similar claim a year or so ago. I told him that the average person's income has NOT increased 100% like gas did. "Adjusted for inflation" is to broad of a term to be 1:1 on all commodities.

He conceded that I was correct in my assesment. Only CEOs income have kept up and/or surpassed inflation of ALL commodities over the past several years.

Also, min wage remained at $5.xx forever while prices tripled on some things.

Answer 6

No. The $100/barrel figure is NOT inflation adjusted. It is the actual market price.

Answer 7

That is pure BS. The gas prices have gone up MORE in relation to the rise in oil prices--and the oil companies are posting record profits right and left.

Do you REALLY expect anyone to be dumb enough to believe this? ROTFLMAO!

Answer 8

actually it's already over the all time inflation adjusted high

Answer 9

see table below historical oil prices.............

also adjusted for inflation

Answer 10

Bush and his cronies are probably rolling in money, right about now.