December 9, 200421 yr Author Thanks for posting southsider, I wasn't really sure of the authenticity of that site. Then again I can't fully trust what you post either, its a lose lose situation. Good for you. Seriously. I like people who don't believe what they read because the writer uses a lot of big words or writes really long winded stuff. I hope you do your own research and find the info you want Anyways, something I totally missed in my original response in all of this was energy prices affect on the dollar. The US just had the price of crude double within the course of a year. By depreciating the cost of the dollar, we probably had the effect of artifically keeping energy prices artificially high. Because crude trades in dollars, we pay in dollars, granted the price doubled, but now those dollars are worth 30-40% less, so the net effect is much less. It has OPEC talking about raising their trading range up to reflect the drop in the dollar.
December 9, 200421 yr Good for you. Seriously. I like people who don't believe what they read because the writer uses a lot of big words or writes really long winded stuff. I hope you do your own research and find the info you want Anyways, something I totally missed in my original response in all of this was energy prices affect on the dollar. The US just had the price of crude double within the course of a year. By depreciating the cost of the dollar, we probably had the effect of artifically keeping energy prices artificially high. Because crude trades in dollars, we pay in dollars, granted the price doubled, but now those dollars are worth 30-40% less, so the net effect is much less. It has OPEC talking about raising their trading range up to reflect the drop in the dollar. Not only does the low dollar have them worried but they are afraid that the 25% drop in oil's price in the last 2 weeks will become a total rout.
December 9, 200421 yr Author Not only does the low dollar have them worried but they are afraid that the 25% drop in oil's price in the last 2 weeks will become a total rout. So then if you put both together, it would be a HUGE kick in teeth for OPEC. Say crude falls back to the $30-$35 bbl levels, it would only be about 20-30% above where it started. Yet the dollars their getting are worth 30-40% LESS than what they were... OPEC is actually being smart here, and we are going to pay for it at the pump. IMO, $2 gas is here to stay as long as the dollar is where it is at now.
December 9, 200421 yr So then if you put both together, it would be a HUGE kick in teeth for OPEC. Say crude falls back to the $30-$35 bbl levels, it would only be about 20-30% above where it started. Yet the dollars their getting are worth 30-40% LESS than what they were... OPEC is actually being smart here, and we are going to pay for it at the pump. IMO, $2 gas is here to stay as long as the dollar is where it is at now. I'd like to see gas prices remain high, it encourages people to look at alternate sources of transportation. Something I think all of us should do.
December 10, 200421 yr Author I'd like to see gas prices remain high, it encourages people to look at alternate sources of transportation. Something I think all of us should do. The thing is, with elasticiy of gas as low as it is, it takes a HUGE move to affect people's buying habits. Gas would probably have to double at least in order to make any appreciable affect on demand.
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.