No doubt less than inflation …. the problem is the accelerated, short-term increase.

If things gradually increased, there would be an “acclimatization”. What we’ve experienced is a doubling of price in the span of a few years.

Price shock cannot be dismissed by the argument of underinflation.

also in the last 30 years drilling and refining technology have greatly advanced making it cheaper to produce fuel, so the prices should not have raised with inflation.

Dean: gradual changes don’t occur because it is a commodity on a global scale. Please leave the little isolated home you live in behind and look at the *why’s* on a global scale. Price spikes occur in many industries (hell, if a share spikes, most people are damn glad of it because they, wait for it, can profiteer from it!). Price shocks occurin financial markets more due to insecurity on the futures than anything else. Also, for god/allah/buddha/deity-of-your-choice’s sake, don’t even dare bring OPEC in on this debate. Look at global output capacity – it’s near 100%.

Captain America: Yes, in the last 30 years drilling and refining technologies have greatly advanced, but the feedstock being used as the input is diminishing (supply) as the demand has concurrently rapidly increased. Please go and do Economics 101 on supply and demand to understand that your statement requires no change in feedstock supply or end use demand. You may also be comforted to know that because of the high prices for oil, more oil fields are coming online (either new or mothballed) – but only because the margins required by the company, and ultimately the shareholders who own the company/companies, are being met.

#3, I guess GM and Ford will be thrilled to read your awesome explanation of why rising gas prices are good for everyone. I’m sure SUV sales are on the rebound as I type. Dean, Cpt. USA, and the rest of us will, I am sure, soon be wearing the same style of rose-colored shades you prescribe. Weeee!!

meh. overpopulation is busting our balls now, and its only going to get worse.

Hey Joel, how do they know supplies are diminishing??? last I checked they had no way of knowing how much actual oil supply is there to use. With all that bloody profits, seems like things would get updated, find more oil, etc. Oh wait, that would shrink the size of their wallets and heads a little while helping the world and we can’t be having that now.

Oye. #3 is the only guy with any sense here. The rest of you are chicken littles or tin foil hat conspiracists. There is a world of energy out there that until now was simply too expensive to extract. At $2.50 a gallon, which is a perfectly reasonable amount for gas in a market with nearly 1/3 of the world’s population rapidly reaching 1st world status (China/India), oil sands, shale oil, ehtanol, bio-diesel, internal combustion hydrogen, etc. become competitive products.

And, that is very good. We don’t need competition amongst oil companies, we need competition amongst energy suppliers. A broader source of energy is good for the market and will help drive innovation and efficiency.

You guys must not live on planet earth. Its not population, SUVs, or the refining capacity of the oil industry. Its 2 simple things. [1]price gouging as evidenced by the Grotesque profits posted by the oil industry last week. And [2]political instability in the middle east as a result of W’s short sighted arrogant war mongering is the the driving force behing the spike in crude oil prices. And don’t try to compare US to European oil prices, there’s a ton of additional tax on gas in Europe to pay for health care, and other issues that You’re unaware of. So stop trying to argue stupid ass supply and demand nonsense. Its just greed and irresponsible leadership in the USA, that’s all.

In response to #5, I read an article about the oil fields in Suadi Arabia (Some of the Worlds RICHEST fields), and they of late have been pumping more water into the wells, then oil has been coming out. That is a sign that the amount of oil (which floats to the surface under the pressure and displacement) left in the wells is diminishing.

As #6 said, we need the higher prices so that CONSUMERS demand other sources of energy, so that there is enough interest in researching and finding cost effective alternatives.
All the political “solutions” are short-term vote whoring solutions. Higher prices will do what they preach, make us reduce consumption and preserve. The higher prices will also make us focus on new and other technologies. Go read about what happened when the Whaling industry had nearly wiped out whales and whale oil (THE primary source of fuel) became so expensive that NO ONE but the rich could afford it. New fuel sources were researched and found ONLY because there was a demand.

“Its just greed and irresponsible leadership in the USA, that’s all”
YIKES. Try doing some REAL reading and research before you jump to conclusions. Your “reasons” are both wrong, and that is not my opinion, it is facts backed by research and reading of history.

Wow Throm, great support for your opinion. You oughta be a lawyer.

“Thom”, my apologies for misspelling your name.

#8 -> Bingo!

Thom #9 – makes some sense. Americans don’t ever look back beyond last week. The whale oil thing is exactly right..

But first, If the price is high enough they’ll drill on Martha’s Vineyard and Naples FL … FOR SURE: commies (planning an attack on Brownsville) will be discovered in Venezuela and it will become the 53rd state and the name changed to Exxonia.

Shortly thereafter, someone will re-discover Syn-Diesel or methanol (probably a Chinese company because we’ve become engineering slackers..) and Saudis will be back to riding camels. …’till then bring me a 2L diesel in an attractive SUV body.

j i m

Bring in the Ethanol…

I like how they always try to make is sound good by adjusting for inflation. BS. $3.00 is $3.00 out of my pocket. I don’t go to the pump and say to myself, hell, I’m really only paying $1.24 nonsense.

#8 -> Wrongo

Sorry, as much as everyone hates Bush, oil price is determined by Supply and Demand. And that cost per barrel is the same in the States as it is in the EU. But you’re not completely wrong, politics do wreak havoc on the futures market and somewhat on the demand.

#2 – you’re right drilling and refining techniques have vastly improved over the last 30 years, but that just increased profit margins (as you’ve seen in the last year), that has no bearing on the demand, maybe the supply, but demand is out pacing it.

And Ethanol? Serious? It’s much more expensive (right now) and there’s huge shortage in The US (coupled with protectionist tariffs), plus its MUCH less efficient than petrol.
Bottom line: Ethanol currently costs you more money for less energy.

“Exxonia.” Now that’s funny. I can see a tv movie being made called that. The only problem with what you are saying, is it could come true (let’s hope not!) By that I mean the environment getting screwed because of the pressures of demand.

As far as the inflation excuse goes, it makes me feel better while I read the article, then I get mad too. With that “excuse” shouldn’t we be pissed off and demanding that bread only cost 5 cents a loaf? The problem with the inflation idea is that EVERYTHING costs more, so it still hurts to pay the high prices.

What we need to face now is that things are not going to get better, and prices will never go back to $1 a gallon.

“joel” and “mooseman” ….

I didn’t get into detail about supply/demand, alternative sources, blah, blah …

Plain and simple, the recent jump in prices is still below inflation-adjusted prices but the rapidity of the climb is what is of concern, not the actual final price. I know how the market works but the average Joe and Jane haven’t become accustomed to this relatively high price this soon and this fast.