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SugarDrive

Price of Gas

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The big thing now is to avoid complacency. We can't let todays lower prices cloud our efforts at reducing our oil consumption and the developement of alternate methods.

The reason prices rose was we reached the ceiling in capacity of global oil production. There is only so much that can be produced and demand was high. The current worldwide econmic crisis has effectively reduced oil consumption moving us away from that ceiling and reducing costs.

But today's low oil prices combined with the global credit crisis are setting us up for the next violent upswing in oil prices as demand once again will eventually collide with the ceiling in oil production capacity. I envision this occuring within the next 2-3 years.

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quote:
Originally posted by andreseng:

The reason prices rose was we reached the ceiling in capacity of global oil production. There is only so much that can be produced and demand was high. The current worldwide econmic crisis has effectively reduced oil consumption moving us away from that ceiling and reducing costs.

Cheyenne, what part did I miss?

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quote:
Originally posted by folding chair:

so, i don't think anyone has fully answered the question proposed by Jodi and myself.

i am still waiting. Razzer

and George, i agree with you about complacency. i think we should ride bikes and parachutes.

I ride my bike everywhere i can Big Grin For many reasons not just because its better for the enviromento. Apart from when its raining as it did a bit today.

Ok so the G man pretty much answered your question in short, high demand along with limited supply leads to high prices. Prices have now fallen due to lower demand and due to the credit crunch effecting affordability.

Oil prices may very well be on the rise again in less than 2 years.

Horrible economy does not necessarily go hand in hand with high price increases. For instance an economy suffering from high unemployment/low output, will usually be shrinking, which can be very bad. And therefor in order for the economy to grow prices may need to fall before rising again.

The price of oil got so high for a number of reasons. Fall in reserves, speculation/expectations, the situations in the middle east, demand increases (India and China), among other things like conspiracy theories.

I saw somewhere mention that prices were on the decline (CPI not Oil prices) so the sudden drop in oil prices could have some interpretation towards a poor economy. In my opinion I wouldnt say this sharp decline was an overall positive thing for the economy as a whole. But I havn't really dabbled in this topic so I havn't really got anything to back that up

Im avoiding coursework at 3 in the morning and am rather tired so this is inevitably unsuccinct, quite lacking in substance and most likely significantly inaccurate. I study economics so just felt like posting in on this convo

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