Friday, December 17, 2021

The Magical Oil Knob

      There's a funny thing about gasoline and diesel/heating oil: most of us act as if there's a magical knob on the U. S. President's desk, which he can fiddle with at will.  If prices go up, and we didn't vote for the guy, we blame him.  If prices drop, and we voted for the guy. we thank him.

      We are -- all! -- notably silent when prices climb under a President we like, or drop for a President we dislike.

      There's no knob.  There never has been.  At best, a President is like a cheerleader on the sidelines of a football game: they can get you roaring, and perhaps that affects the final score, but the grunt and impact and long, lovely throws are all done by other people.  A President can encourage or stop oil pipeline construction, but that's just a long, dry pipe, with no direct connection to your gas tank until the oil flows.  It does affect the futures market in oil; but the forces that drive oil prices are complex, often at odds with one another (OPEC vs. non-OPEC producers, for instance) and not always strictly rational.  The closer it gets to be a consumer product, the more market forces drive the price -- but the companies selling it to to you have made their own bets on prices, and which way they'll move.  They always hedge their bets.*

      Gas prices have dropped for the holidays.  I'm not much minded to praise or blame the President; he doesn't even have to fill the tank of the cars he rides in.  But I do have a mental image of Adam Smith on the sidelines, covering sheet after sheet of paper with notes, crumpling them up and throwing them away in increasing frustration; even the simplest explanation of fuel pricing gets into the tall grass very quickly, and from there into the weeds.
* Remember when crude oil prices briefly went negative?  Yeah, gas and diesel price at the pump never even got close to that, because J. Random Oil Company knows they'd better have a cushion when things change.  And it's true that we'd miss them very badly if they were gone.


Anonymous said...

sounding more liberal every day.

Ygolonac said...

Just another side-jacking for update: the Lazy Arm works! Might need to fiddle placement of the base a bit, and the ball-joint would be happier with less weight, but elsewise it hangs file - and is stable enough that touchscreening doesn't joggle things awry.

Might be able to swap to a 10" screen tablet, as my brother's Fire has done extinguished itself, and if it's just the battery (that's already inbound), then I keep it as a new-model replacement just arrived. Got four years out of it before it snuffed it, so not too bad for a hundred bucks or so.

Now if I could only deliver rolled-up-newspaper smacks to the content-creators who can't standardise on a single volume level - they speak (or otherwise have audio) between 70 to 50% of everything else I'm viewing; speech is clear, they're not mumbling or anything, but going from their audio to a different video (or worse yet, inserted commercials) is a ticket to BLARE TOWN!

Bah. I'm off to shake my fist at some clouds, but I just wanted to thank you again for the idea and discussion on hardware/how to make it work.

Roberta X said...

Ygolonac: I'm happy it is working out!

Anonymous: What, referring to Adam Smith and the actual forces that drive the prices of things sounds "liberal" to you? Don't blame me that so many of the Republicans have decided unhinged ignorance is better than the rationality of a Buckley or a Goldwater -- I'm a libertarian, neither liberal nor conservative. My political leanings are not a secret.

I am of the opinion that Mr. Biden is fairly typical Democrat President: bad within normal limits. When the GOP works their way back up to offering a Presidential candidate with that meager level of performance, feel free to check back here, and I'll give them the same kind of exceedingly faint praise you think I have given the current tenant of 1600 Penn.

Joe said...

The law of supply and demand knows no political party. That said, the President can affect fuel prices by tinkering with supply (or potential supply). Shut down a lease here and there, restrict the flow of crude and prices soar. Add a lease or two and prices drop.

Gas prices are like all prices at the retail level. Price is determined not by what you paid to put that gas in the underground storage under the pump, but what it will cost to fill it up next week.

Roberta X said...

Joe: Warren G. Harding is dead, Albert Fall spent a year in jail and the only oil leases Uncle Sam controls are on Federal land.

Forbes has recently discussed the extent of Presidential control over gas prices. It's not much.