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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Keith Feral who wrote (185665)	4/26/2006 9:32:27 AM
From: jttmab	Read Replies (2) \| Respond to of 281500

I think the major disruption is that there is not enough refining capacity. That's a stretch calling the status quo a major disruption. The oil companies don't want to increase refining capacity significantly. Why would they? So they could increase the gas supply, lower the price, and lower profits? Limiting refining capacity creates a bottleneck in supply. You produce enough at the highest possible price to optimize the cost/profit curve. Oil/gas doesn't have the classic supply/demand curves. If the price of gas were to drop in half are people going to start taking the scenic drive to work? Are they going to a Safeway that's 40 miles away rather than 5 miles. I don't think so. Americans are pretty good at complaining about gas prices and not changing their driving habits. An aside: interesting that all these Americans who are plush with tax cuts in a great economy are saying they are impacted with high gas prices. jttmab