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2008-07-30 Home Front Economy

Why oil prices are falling - not speculators

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Posted by Nimble Spemble 2008-07-30 08:13|| || Front Page|| [11131 views ] Top

#1 Actually the largest part of that drop IS due to speculators leaving the futures market for greener pastures. The drop in demand and the trheat of expanded production have dented the rate of increase, which is what the specualtors were riding - it provided them with irresistable margins. The riks now is greater, so they have left the futures market for more "conservative" players (who produce less wild swings).

The next step will be to actually get out of the way and let exploratory drilling get underway - at that point the "rent" chargable against future rpices will drop even fuirther - and when the futures drop, as we have seen, the spot market also drops.

Posted by OldSpook 2008-07-30 12:17|| 2008-07-30 12:17|| Front Page Top

#2 Fewer miles driven = fewer shopping trips, fewer job interviews, fewer visits to elderly family members & fewer camping trips with the kids. That's not progress. That's poverty, and what kind of idiot praises poverty?

Posted by Iblis 2008-07-30 12:41|| 2008-07-30 12:41|| Front Page Top

#3 I have read somewhere that one truck does as much damage to the roadbed as ten thousand cars. Increase the truck tax. That will force more freight onto the railroad and save the roads. There, that is my bureaucratic fix and I stand by it.

Posted by GolfBravoUSMC 2008-07-30 12:56|| 2008-07-30 12:56|| Front Page Top

#4 what kind of idiot praises poverty?

A Socialist, but for others, not himself.

Posted by Procopius2k 2008-07-30 13:09|| 2008-07-30 13:09|| Front Page Top

#5 I have read somewhere that one truck does as much damage to the roadbed as ten thousand cars.

I read somewhere that the moon is made of cheese, doesn't make it so. The highways in this country have been designed and constructed with the extra wear and tear of trucks factored in. Trucks are neither 10,000 times heavier or bigger than the average car, so it would be sort of preposterous to state they cause 10,000 times the damage.

Increase the truck tax.

Do that, and the cost of everything you buy will have to increase accordingly. There isn't a single thing that you own or consume that hasn't had at least two rides on a big-rig, and typically more.

That will force more freight onto the railroad and save the roads. There, that is my bureaucratic fix and I stand by it.

Considering the poor shape that much of the rail infrastructure is in, I doubt that it could take an increase in load or traffic. Besides, just about everything that can be shipped inter-modal is, however, some things have a time-to-market sensitivity, and these things have to go by truck.

So, you say you stand by your "bureaucratic fix", are you willing to pay for it? Are you willing to downgrade your lifestyle to accommodate your "fix"?

Posted by Grease Dark Lord of the Algonquins9226 2008-07-30 13:16|| 2008-07-30 13:16|| Front Page Top

#6 GolfBravo, the roads and bridges are designed for truck loads but the traffic system designs are driven by the automobile. If all the folks that have come to my state would leave we wouldn't have to go from 4 lane interstate to 8 lane and we should still be able to handle the trucks.

I don't see why someone driving an electric car should be exempt from paying for the roads they use any more than bicycle riders should be exempt for that extra 10 feet of roadway and right-of-way they use (that still has to be built to truck load standards if attached to existing roadway).

There ain't no free lunch. Don't ask for a service including roads) if you are not willing to pay for it.

Sorry folks, personal soapbox....

Posted by tipover 2008-07-30 13:26|| 2008-07-30 13:26|| Front Page Top

#7 "We are the change we have been waiting for."

Posted by Baltimore&Ohio RR 2008-07-30 13:31|| 2008-07-30 13:31|| Front Page Top

#8 User fees - make users pay only for what they use and stop collecting money from those who do not use. Anyone who really thinks that tax money collected for some purported specific purpose really goes to that purpose only also believes in honest politicians, thrifty bureaucrats and the tooth fairy,,,

Posted by M. Murcek">M. Murcek 2008-07-30 13:35|| 2008-07-30 13:35|| Front Page Top

#9 I have read somewhere that one truck does as much damage to the roadbed as ten thousand cars.

Road damage is proportional to the 4th power of loading.

(40tons/5axles) / (1.5tons/2axles)**4 = 12,945 times damage/mile driven

Freight trucks do not pay for the damage they cause, but their service is essential to a functioning society. So everyone puts a little into the kitty to cover the costs.

Posted by ed 2008-07-30 13:44|| 2008-07-30 13:44|| Front Page Top

#10 I suspect the only way that users of electric vehicles can be made pay for what they use is to have a vehicle mileage fee similar to what trucks pay. That will at least make them put into the road infrastructure that they use. Of course all of us will get to pay for their use of the grid unless the power company puts a separate meter on their charging systems.

Again, there ain't no free lunch. Someone WILL pay for all of this.

Posted by tipover 2008-07-30 13:45|| 2008-07-30 13:45|| Front Page Top

#11 Road damage is proportional to the 4th power of loading.

(40tons/5axles) / (1.5tons/2axles)**4 = 12,945 times damage/mile driven

I stand corrected.

Posted by Grease Dark Lord of the Algonquins9226 2008-07-30 13:51|| 2008-07-30 13:51|| Front Page Top

#12 When electric cars become popular, registration fees will go WAY up. Most likely it will be a flat fee per model, but basing it on model and last year's miles driven is the fairest.

Posted by ed 2008-07-30 13:54|| 2008-07-30 13:54|| Front Page Top

#13 The Chinese also hoarded fuel to run generators and other equipment following their massive earthquake, pushing up demand. After the Olympics, things should drop even more if no other catastrophe occurs, affecting global markets. Trucks are foundational to our economy. Colorado asks them to drive in the left (passing) lane to help balance out the ruts in the right because roads are so bad. The Midwest had a very harsh winter and flooding washed entire highways out, with some still closed following June floods in Iowa. 1/4 of the bridges need replaced nationwide. And the railroads are going gung-ho again, with many of the short lines up and running after years of disuse. RR employers require at least a high school diploma, giving the homeboys an edge over the cheap illegal labor pool filtering in and working for $5 and hour without overtime pay. School buses, often the largest cost of rural districts, are also starting to convert from diesel to propane. Property taxes usually fund schools and with values plummeting and record foreclosures, state and local revenues are really down, when the Feds are asking the states to pick up more of the costs. Local option sales taxes have been part of the answer to finding new funding, but you're right, switching to green technologies will pose unforeseen tax problems. It's a complex problem requiring a comprehensive solution.

Posted by Danielle 2008-07-30 14:22|| 2008-07-30 14:22|| Front Page Top

#14 I'm glad I could stimulate a little discussion, since the news from Iraq is so boring, what with winning and everything.

I have read somewhere that one truck does as much damage to the roadbed as ten thousand cars.

I defy anyone to drive from San Francisco to Los Angeles on I-5 and stay in the truck lane. You will need to replace your fillings and realign your front end when you get to LA .

Almost every Freeway in California is the same way, the right most lanes are beat to crap. An exception is I580 between Castro Valley and Oakland, reason - "No Trucks Allowed".

Our local city streets were fine until we put up a Costco. In a short time the streets between the Freeway and the Costco had to be ripped up and redone. Maybe it was all the shoppers? The streets leading to the parking lot seem to survive, but the one to the loading dock was lunched.

The local streets are an issue that needed to accommodate the heavy trucks, but, do we have to subsidize long haul trucks carrying Chinese goods from San Pedro to the Wal-Mart stores in the Midwest?

Thanks ed for the math lesson.

P.S. One could argue that high postal rates subsidize junk mail. We have to keep the rates high and cover the lost revenue due to e-mails and e-bills. If we raise the junk mail rates too high they will go away and hundreds of thousands of postal workers will be out of work.

So everyone puts a little into the kitty to cover the costs.

Posted by GolfBravoUSMC 2008-07-30 14:28|| 2008-07-30 14:28|| Front Page Top

#15 (40tons/5axles) / (1.5tons/2axles)**4 = 12,945 times damage/mile driven

The trucks also have larger tires and twice the number of tires per axle.

Posted by Abdominal Snowman 2008-07-30 14:36|| 2008-07-30 14:36|| Front Page Top

#16 SO the above numerical analysis is probably off by at least a factor of 16, plus whatever the tire size difference causes.

Posted by Abdominal Snowman 2008-07-30 14:44|| 2008-07-30 14:44|| Front Page Top

#17 Interesting. The much larger damage due to heavier wheel loads applies to trucks - and trains. The trucks do have more tires, AS, and run much higher tire pressures, (90 psi?) too. If it's 90 psi in the tire, what's the pressure the tire exerts on the road?

Also, twice the number of tires per axle may cause three or four times the load a foot below the surface of the roadway. Loads are distributed in (roughly) a 45-degree angle, so if wheels are spaced closely, those loads overlap. The purpose of the roadway - and railway - is to take the high wheel loads of the vehicle and distribute them over a sufficiently large area to the pressures the soil can stand without excessive deformation.

As for the rail infrastructure, Grease (#5) they are in the best shape in years, but also carrying all they can handle on many lines. Thru mush of the 20th century, they had excess capacity (empire builders) but cut back after WW II until the demand started outstripping supply. Wyoming (!) now has a bunch of triple-track line, (where 40 years ago there was none) for hauling low-sulfer coal to the utilities of the south and east.

If you want a silver bullet, get on the Obama wagon train, or go over to Kos.

Posted by Bobby 2008-07-30 17:06|| 2008-07-30 17:06|| Front Page Top

#18 Will gas conservation raise prices?

For the second time in twenty years locally we are going on water rationing. Like the last time, they also will raise to rates to cover the lost revenue resulting from successful conservation. This is to maintain the revenue to offset the costs of the infrastructure, etc.

Of course when the last water crises was over the rates did not go down. Hopefully the competition from the five major oil companies will keep this from happening like it has in a monopolistic water utility.

Posted by GolfBravoUSMC 2008-07-30 17:24|| 2008-07-30 17:24|| Front Page Top

#19 When the boys are thirsty in Atlanta, and theres beer in Texarcana, a black trans am is just not gonna cut it alone. You need a truck.

Posted by rjschwarz 2008-07-30 17:53|| 2008-07-30 17:53|| Front Page Top

#20 Off topic but I really enjoy how subject matter experts pop up on the Rantburg site. (grin) Have a great day.

Posted by tipover 2008-07-30 22:22|| 2008-07-30 22:22|| Front Page Top

#21 Rantburg U rules, tipover.

With the increase in oil prices I have been combining trips more. But, with trailing daughter #1 going off to university in September, and temporary daughter needing everything from underwear to jeans to sneakers, I cannot say I've been spending less on stuff this summer... and definitely more on food and hot water. ;-)

Posted by trailing wife ">trailing wife 2008-07-30 23:06|| 2008-07-30 23:06|| Front Page Top

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