Now that the off-shore moratorium has been lifted, will the price of gas plummet?

[taterguy]

What's the point of drilling offshore if it doesn't mean cheap gas?

I expect the stuff to be under 2 bucks a gallon by July 4.

Nothing says Independence like cheap petrol.

Right?

[dipsydoodle]

1. Its an unassociated issue.

the price of oil is the price of oil.

[taterguy]

2. So what good is drilling offshore?

Surely there's something in it for me.

[dipsydoodle]

3. Supply and demand I guess

the more there is available the lower the price provided demand doesn't escalate.

[taterguy]

5. So how much has to be supplied for the price to go down?

Seriously, I think that's a discussion we should have before deciding whether or not the risk to our environment is worth it.

OTOH, if demand drives the price, does that mean that people who drive when they don't have to are screwing everybody else? And that those sanctimonious pricks that ride bikes everywhere are doing us all a favor?

[dipsydoodle]

7. Its not how much has to be supplied

its how much is available for supply. Demand drives the price when supply is restricted.

And btw - price , by definition, is what you are prepared to pay. That doesn't mean you as individual.

[taterguy]

9. Huh?

Seriously, no comprende.

[dipsydoodle]

11. You need to read up

on basic economics when you have the time.

That is not intended to be a facetious remark so please don't take it as such.

:hi:

[taterguy]

13. Do basic economics apply to oil?

How "limited" is the supply?

The vociferous debates on peak oil indicate that no one really knows.

How much of the demand is based on 'want' vs. 'need'?

Can't these complex questions be explained in a simple post on a message board?

[Spider Jerusalem]

14. Basic economics apply to everything

the supply is limited enough that in real terms it's demand that drives the price, because there is no surplus (it doesn't matter how much there is under the ocean bed, or in undicovered oilfields; that isn't supply, it's potential supply, and it takes years for an oilfield to come onstream and actually produce oil from first prospect and discovery).

And how much of the demand is based on 'want' vs 'need'? Quite a lot, but at the same time the need is there (oil isn't JUST transportation fuel after all, it provides a lot of other stuff besides). Without oil, industrial civilisation as we know it ceases to exist and economic growth doesn't happen.

[dipsydoodle]

17. Simplest answer I can find for you.

Economics Basics: Demand and Supply
http://www.investopedia.com/university/economics/economics3.asp

[taterguy]

18. So when the price goes up, demand decreases?

Doesn't seem to apply to gas prices.

[Spazito]

4. Nope, they just put more oil in 'storage', refine less, to continue to raise...

the price. There will be no glut in the market wrt gas.

[taterguy]

6. Bummer

[dipsydoodle]

8. Refinery capacity

is a wordwide problem.

[Spazito]

10. It is the timing of the shutdowns for 'maintenance' that is telling...

the 'problem' of refinery capacity is often used as the excuse for the price of gas remaining high or increasing. It is an artificial construct for the most part, imo.

Edited to add: When I say keeping the price of gas high, I mean relative to the U.S. Overall I would like to see the price of oil much higher, closer to the real costs of it's usage including environmentally, but that does not, imo, negate my point on why the price of gas doesn't go down regardless of the oil supply.

[RC]

12. That explains the price of gas going up 20¢ in the last few days here.

[Lagomorph]

15. It's free...

scoop up all you want.

[FBI_Un_Sub]

16. There is going to be a "practical moratorium"

There is going to be a "practical moratorium" The Coast Guard will meticulously "re-inspect" each and every rig. By the numbers, by the book, no short cuts. And the marine insurance carriers, the , will likely superimpose their own inspections with the own inspectors.