"Gorf" wrote in message
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"RCE" wrote in message
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"Doug Kanter" wrote in message
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"Gorf" wrote in message
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"Doug Kanter" wrote in message
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"RCE" wrote in message
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Again, stolen from another NG, the following is a portion of an
article
published in the "Economist".

It seems to refute some of the Peak Oil doom and gloom arguments.

The hell with "the peak". How about just doing our part to lower
prices?
Or,
are Americans too friggin' busy, lazy or stupid to make the effort?



Just like the tech bubble, the real and the estate bubble. The price
of
gas
is high right now because of speculators hoping to make money off of
it.
Because Bush has threatened Iran, and Iran has said that they would
block
the straight of Humus if attacked. Speculators on the commodity
market
are
driving up the price. Add to this artificial shortages due to the
implementation of "ethanol based" fuel.
If the Iran issue blows over, prices will plummet.

Why don't you buy a small fuel efficient car?





Iran just said they intend to share their nuclear technology with
Sudan.
This may not blow over.


Assume for a minute that political influences on the price of oil were
suddenly gone ... OPEC resumed setting reasonable oil prices and
everything
is hunky-dorey with the world.

Then, assume everybody that drives a car in the world got a flash of
insight
and traded in their current vehicles for replacements that got twice the
fuel mileage.

What would happen to the price of gas? Go up, down or stay the same?

I say it would double in price.

RCE

The capitalist law of supply and demand says that the price would drop.
But
of course as long as the government is in league with oil monopolies, you
are probably correct the price would go up....



I am sure it would double quickly, but not for government reasons.

Large, public corporations are controlled by the stockholders. By
stockholders, I don't mean John Q. Public's personal investments, but by
major institutional investors managing big money market and retirement
accounts.
These investors are as much interested, or more so, in revenues and the
steady growth of .... than in the minor quarterly swings in profits.

If the segment of oil company's revenues that are derived from gasoline
sales suddenly dropped by one half, these investors would be screaming for
the revenue deficit to be made up immediatately. The big oil companies
cannot afford to lose confidence in the investment banking community, and
would raise prices to make up the revenue deficit.

So, switching to high mpg cars may make you feel good, and, if you believe
the world is about to run out of oil you could convince yourself that you
are doing some good, but if you think it's going to control the price of a
gallon of gas, you are really misguided.

RCE