Friday, November 02, 2007


Friday Fragments

Hi there! First time posting.

Regarding the oil prices isn't it convenient that it happens to be right on time for holiday driving season at the end of the month and at the same time that folks are filling up their oil tanks for the winter to heat their homes?

Hmmm... Interesting to see that play out.
Has anybody else noticed that the price of oil has doubled in the last year, but the price of gasoline hasn't changed much?

I thought that the price of gas shot up early, to maximize profits, and now the price of oil is catching up. The oil companies did make record profits last year, didn't they? A CNN headline from Feb:
Exxon posts biggest annual profit ever
Record oil prices help the world's largest public oil company earn $39.5 billion in 2006.

And that's on a very cursory google. They just anticipated the growth in the price of oil and grabbed their profits while they could.
The price of gas jumped 10 cents this morning as a result of your blog posting. ;-) Seriously, I watch a particular Chevron station on my drive to work; it had been stable for weeks at 2.85, jumped to 2.89 earlier in the week and hit 2.99 this morning.

Remember, the price of oil that is reported in the news is the spot price for a particular grade of oil on the global market, not the contracted price paid by any particular company that has a long-term lease agreement with the country that lives above the oil.

What you might not have noticed is the anticorrelation between the value of the dollar in euros and the price of oil. Anyone want to calculate the price of oil in a more stable currency as a function of time by comparing those two commodity prices?
Here, gas has gone up 33 cents in four days. Sunday? $2.84. Thursday morning? $3.17. On Tuesday was a jump to $3.07.

I think I need a new hobby. ;-)
I have to disagree on the oil thing. compared to one year ago, the NYMEX crude oil index is up roughly 38%. Also compared to one year ago, the average price of regular gas is up 34%. Hardly a large gap, especially considering that much more than just the price of crude goes into the price of gas.

So, gas is actually roughly keeping pace with oil, which is not to say that one or both won't shoot up for other reasons.
The price increase in gas last year had a lot to do with refinery capacity and the lack thereof. Regulations around building new refineries and the fact that price uncertainty makes building more capacity a risky investment means that we'll be stuck with this for a while, if not forever. Higher crude prices shouldn't affect it that much, unless they get a lot higher.
The car flashes a light when the key is not in the ignition?

So the light flashes ALL of the time?

Is it me, or is this completely insane, not to mention hard on the battery?
Paladin - You can increase refinery capacity without building a new refinery, and that is what has been done in the US along with higher utilization rates of existing capacity. The situation is complicated by the designer blends needed in various regions and the need to change them from season to season. That causes a temporary supply and demand problem in specific areas that is unrelated to oil price or availability.
Being labeled "journalist" won't offer the protections afforded to traditional journalists.

For example, the US House of Representatives passed the Free Flow of Information Act of 2007 (a federal shield law), Oct. 16. Yet the language of the bill covers only those who earn a "substantial portion" of his or her livelihood from journalism or those who practice journalism for "substantial financial gain.”

Most bloggers and student journalists earn little or no pay, therefore we will not be protected.

Everyone needs to support and defend student journalists on his or her campus. We're both practicing our First Amendment rights.
Complaining about gas prices?
Take a look at the Netherlands:
we are paying $8 a gallon now...
but then, I can commute by bicycle...
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