4/06/2005

Oil Prices Decreasing?

In the article "Greenspan: Market may cool energy prices" it talks about how Alan Greenspan gave a speech given to the National Petrochemical and Refiners Association, in hopes that it would strike conversation between consumers and producers. It looks like this is helping; a barrel of oil fell by 97 cents. I think prices will fall a little bit but stay high for awhile.

4 comments:

Rex said...
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Rex said...

It seems that Greenspan only has to breathe and the U.S. economy shifts. This article made reference to the failed attempt of President Bush’s push for energy legislation. Couldn’t the U.S. simply purchase large stockpiles of oil at lower prices and use them to maintain prices? Don’t they do this anyway? It seems to me there has to be a better way of influencing the price of fuel at the pumps.

Marie said...

I think that the oil prices may decrease for a little while, but they are always increasing during the summer season. I will be really interesting how high they may get this summer. I don't know why they don't just put technology to the test. Where are the articles about research to find cheaper ways to travel, or more gas efficient vehicles? I know that we have the capability to do something about it, so why aren’t we?

Dr. Tufte said...

-1 on Nick's post for a spelling error.

I think this is probably just a chance association rather than something important. Journalists are always associating price movements with whatever minor news event happened that day.

WRT Rex's comment, the governnment could do this but it would be dumb. This is just a price ceiling with extra costs. And no they don't do this anyway - they have the Strategic Petroleum Reserve to do something like this, but they are smart enough not to use it very often.

WRT Marie's comment, there is the simple fact that other technologies are just not good enough. Gas really is cheaper than other technologies (this is why our oil companies don't need to be subsidized, unlike "alternative" energy providers). Further, gas engines are not terribly efficient, and the technology to improve their efficiency has been improving more quickly than that for other technologies.