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Another gas price observation

Old 11-23-2008, 06:02 AM
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Default Another gas price observation

Filled up last night for $1.67 here in NW Florida. Haven't seen it priced this low since at least 2003 and pre-hurricane Ivan. How low can it go?

Amazing, I never saw I'd see this again. Gotta go fill all my cans and caddy .
Old 11-23-2008, 07:25 AM
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Default Re: Another gas price observation

Wow - I paid 1.92 yesterday and I thought that was low. 1.67 is amazing. I do worry about this however - deflation isn't exactly what the economy needs right now either. If prices continue to decline people will defer purchasing, which will cause oversupply which will drive prices down further, which will lead to more deferrals which will decrease manufacturing / services that rely on sales which will increase unemployment .... ugh
On the other hand - low gas prices can also (a) increase individual savings or (b) increase individual spending - both of which would help to stabalize or stimulate the economy. I'm hoping for b !
Old 11-23-2008, 01:46 PM
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Default Re: Another gas price observation

LittleMrs - 11/23/2008 10:25 AM

Wow - I paid 1.92 yesterday and I thought that was low. 1.67 is amazing. I do worry about this however - deflation isn't exactly what the economy needs right now either. If prices continue to decline people will defer purchasing, which will cause oversupply which will drive prices down further, which will lead to more deferrals which will decrease manufacturing / services that rely on sales which will increase unemployment .... ugh
On the other hand - low gas prices can also (a) increase individual savings or (b) increase individual spending - both of which would help to stabalize or stimulate the economy. I'm hoping for b !
I tend to disagree with your first statement, just my opinion but the INFLATED fuel prices are what has brought on most of our current economic problems. People now have money to spend and like it or not the more people can spend the better the overall economy works. I think if the prices can stay below $2 gallon and we can trust that they will stay there then the economy will start turning back around
Old 11-23-2008, 02:26 PM
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Default Re: Another gas price observation

Every economic downturn we act like it's the end of the world. Yet everytime, we rebound. Remember 9/11 and what that did to US consumers. Remember the Internet bubble bursting and we thought it was the end of the world.

My god, how badly we need the optimism of Ronald Reagan.
Old 11-23-2008, 03:56 PM
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Default Re: Another gas price observation

I bought gas yesterday in Mobile for $1.57 /gallon. There was a new Texaco opening that had it at $1.59, this started a gas war on Old Shell Road. I filled up all 3 family cars, and wish I had of pulled the boat down there.

Old 11-23-2008, 04:32 PM
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The decrease in fuel prices should not be considered as part of the economic deflation. The downturn in fuel prices will do nothing but help the economy and may save our nation. This country was built with cheap energy in mind, and any future increase that is as fast as the increase we just got rid of will send us right back deeper than ever into complete doom. The powers that be now know we will choose gas and food over paying our mortgages and credit cards so I predict low fuel prices for a good long time. Just because gas goes up doesn't get rid of urban sprawl, it's here, and people have to drive. BTW, I have, in effect, gotton a $500 per month raise with my lower gasoline bill.
Old 11-23-2008, 04:35 PM
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Default Re: Another gas price observation

I just paid $1.89 which is on par for the area, I was almost empty and put a bit over 11 galons, I am thrilled not to be paying $44 for a compact car! No complaints here!
Old 11-23-2008, 08:07 PM
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Default Re: Another gas price observation

The current fuel price isn't anything new or out of the ordinary. This is simply a reality check back toward reality.

Gas should of never reach $4 given the actual supply/demand curve. This $4 spike was simply the aftermath of investor/speculators. Looks like those suckers are finally too broke to continue such spike.

Econ 101 at work.
Old 11-23-2008, 08:22 PM
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Default Re: Another gas price observation

Slamdancer - 11/23/2008 5:56 PM

I bought gas yesterday in Mobile for $1.57 /gallon. There was a new Texaco opening that had it at $1.59, this started a gas war on Old Shell Road. I filled up all 3 family cars, and wish I had of pulled the boat down there.
where at on old shell rd.? im goin that way tomorrow and i gotta fill up...
Old 11-25-2008, 11:42 PM
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Default Re: Another gas price observation

UaVaj - 11/23/2008 8:07 PM

The current fuel price isn't anything new or out of the ordinary. This is simply a reality check back toward reality.

Gas should of never reach $4 given the actual supply/demand curve. This $4 spike was simply the aftermath of investor/speculators. Looks like those suckers are finally too broke to continue such spike.

Econ 101 at work.
Yea, and if everyone believes that it was "just those horrible speculators" that were the only cause for the price run-up (and acts as such), we're going to be back at $4/gal before you know it. Oil at $50/bbl isnt sustainable in an environment of worldwide economic growth. So until we do something about our consumption levels (increased efficiency, conservation, alt fuels, etc), you can take your pick: affordable gas prices driven by world-wide recessions (i.e. no demand growth), or higher ($100) oil and economic growth.

Worldwide oil demand changes based on a function of worldwide economic growth. Its a formula somewhere along the lines of:

EconGrowth% - 2.5% = OilDemandGrowth % (dont quote me on the exact #s, they are just 'cuffs)

6 months ago, pre-mkt collapse, worldwide economy was probably being forecast to grow at something like 3.5% per year, which resulted in a forecast oil demand growth of 1.0% /yr. Now if you drop worldwide econ growth due to recession to say 2.5%, it results in a no-growth forecast for oil demand.

Thats the reality of "Econ 101" in the oil mkts.....

Now with that said, there is no doubt that the signficant money in the futures mkts probably served to accelerate the price impact of the expected demand growth, much as the lack of $$ being invested in ANY market right now (other than US govt $$) is probably overstating the downward trend in oil since there is no one out there to even buy value right now. But in my view the benefit of the $$ making a bet oil value is that is results in a stronger, more immediate price signal being sent to the market. You cant tell me that many of the soccer moms going from Suburbans to mid-sized suvs or station wagons in the past year (my wife included) would have happened if gas had onyl run up to $2.75, not $4+. Simply changing to smaller suvs isnt going to fix everything wrt the big picture energy crisis we are facing, but its the step in the right direction. Besides, there are only two ways to accomplish these changes....price signals from the mkt, or govt mandates. Personally i'll take the price signals.


Kinda makes alternative #3 (changing consumption levels) seem like less of a bad idea.


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