The Good of High Oil & Gas Prices (1 Viewer)

[THAJCODE]

Average local gas price ticks up -
New Orleans Louisiana Local Finance News Articles - NOLA.com

 

[Mr. Sparkle]

I hope things stabilize, but with India, China, and countless others increased demands, I don't see how or why oil prices will fall. I just think this area has more to gain from the current situation than any other in the US. Which in the short term could help.

I agree. New Orleans has always been on somewhat of a counter-cycle to the rest of America, and now is no exception. Especially if you have a connection to the energy sector and live in New Orleans. The only time I ever notice high gas prices is driving out of town. My commute is less than 4 miles each way.

The suburban lifestyle is crumbling under high fuel prices, bringing more folks back into our cities, looking for shorter commutes, walkable neighborhoods, etc. All the things NOLA has had for about 300 years.

 

[dtc]

Neat thread, but don't buy the excuse that increased demand in developing economies like China and India is driving price increases. That's not true. The majority of the increases have come from the decrease in the value of the dollar and worldwide speculation driven by "uncertainty."

Also, don't buy the nonsense about refineries not being profitable. It's a scam or doublespeak. The fact is, you have to refine oil to make gas. Gas is profitable, but its more profitable at $3 than $2 per gallon. Building refineries would negate the shortage argument offered by gas companies and this would be counterproductive. Why invest billions to increase supply and decrease margin?

Better yet is the fact that domestic oil costs the same today as it cost 4 years ago in many cases. Fields owned by big oil are already paid for. The equipment and investments made so the cost of oil from a field that used to pump at $13bbl is the same except the variable cost of labor and maintenance. One of the reasons big oil is so profitable is because they're selling their oil at $100bbl that cost the same as it did when they were selling it for $30.

What a charade, but as long as it sends us hunting and screaming for the next alternative, its all good. ALTMO