The Sunny Side Of High Oil Prices

Need Encouragement About Soaring Costs At The Pump? Just Look Overseas

(CBS)  If the prospect of paying $4 a gallon for gas is pretty unpleasant, spare a thought for consumers in Europe, who also have to contend with higher taxes. That means drivers in the U.K. pay a whopping $9.50 a gallon, reports CBS News correspondent Sheila MacVicar.

"It's ridiculous, really," one British motorist said. "It's getting to, 'is it really worth having a car?'"

What makes this surge in the price of oil different from past peaks is that it comes as consumers are already trying to cut their fuel consumption.

"In Western Europe and in the U.S. at the moment, oil demand is actually year-on-year falling," said Leo Drollas of the Centre for Global Energy Studies.

But oil-producing nations have cut production and the booming economies in India and China are soaking up any shortfall in demand.

Just as the price of a barrel of oil has been rising - from $56 a barrel in October 2006 to more than $110 today - the dollar has been dropping: Worth 80 Euro cents a year-and-a-half ago, and just 64 Euro cents today.

The dollar has lost value because the Federal Reserve continues to cut interest rates, the U.S. trade deficit is growing and international confidence has been shaken by the U.S. credit crisis.

A lower dollar helps makes oil a very attractive investment.

So in the commodity houses, the talk is of hot money flooding into the market: Pension funds, hedge funds. And speculators, they've pushed prices up by 20 percent.

The good news? Prices, say analysts, are unlikely to stay this high as demand slows and Saudi Arabia thinks about increasing supply.

The bad news? They're not coming down yet.

Pity the poor cabbies. They have no choice but to take these prices in stride.

"They're scandalous, but what can you do? You've got to have fuel," cab driver Jeff Thomas said. "If you don't have fuel then you don't work. As simple as that."

The message from Britain to consumers in the U.S. is as simple as this: Get used to it!

[libsrweak]

OK The one thing that really chaps my hide is that our president will step into the middle of a BASEBALL STRIKE and make them play so Americans can have their favorite pastime to watch, but then the same office refuses to do anything about those same Americans being gouged at the pumps?? OH I forgot... he is from oil, why would he cut his own profits? I guess, if you have the money, invest in oil companies, doesn''''t look like prices will change for our benefit. I can''''t believe thaqt Americans voted this MORON into office twice... I guess it is true, Be careful what you wish for!!! we sure are paying for it now huh?!?! Hope all of you that voted for Bush are not the ones complaining about the high gas prices.....You don''''t have the right to say a single solitary negative thing, you put him there, what did you think would happen? Now all of us get to pay for your idiocy.

Posted by VickieLu at 10:41 AM : Mar 14, 2008
+ report abuse

*******

this mentality is common amongst these young american liberals..obviously they want to mantain the level of lifestyle they are so accoustmed to..driving gas guzzling cars..how about this..you know there is a war BECAUSE OF OIL..we are DEPENDENT ON OIL..wellllll

conserve your arse..ride a bike..take the bus SACRIFICE A BIT...WHINE WHINE WHINE..

you fu cker hates the president but you want to president to act like hugo chavez and socialize our economy???

[egbertbear]

This is a silly comparison for more than one reason. I live in the UK and pay $9.50 a gallon - but my diesel engined Ford does 50 mpg. A friend has a diesel Honda Accord that will hit well over 60 mpg.

If you are an American driving round in a dumb SUV that does 15-20 mpg,you are probably paying more than I am for fuel per mile.

Try economy, try not consuming vast quantities of fuel for the sake of it. Despite what so many Americans seem to think, oil supplies are finite, world demand is rising, therefore the price will go up. Live with it and adapt.

[ttrye]

If you are a single and covet friends , I think the site militaryfriends.com/blog/military_single is suit for you

[rpmcneal1]

Public transportation is widely available in Europe unlike the US. We have no alternative but to pay or stay home and not work.

[lovegetpeace]

The Europeans are very smart. They have high income taxes and high gasoline taxes. Their Euro is going thru the roof.

[esyrdr413]

I agree 1,000 % with you Vickielu.

[vickielu]

OK The one thing that really chaps my hide is that our president will step into the middle of a BASEBALL STRIKE and make them play so Americans can have their favorite pastime to watch, but then the same office refuses to do anything about those same Americans being gouged at the pumps?? OH I forgot... he is from oil, why would he cut his own profits? I guess, if you have the money, invest in oil companies, doesn''t look like prices will change for our benefit. I can''t believe thaqt Americans voted this MORON into office twice... I guess it is true, Be careful what you wish for!!! we sure are paying for it now huh?!?! Hope all of you that voted for Bush are not the ones complaining about the high gas prices.....You don''t have the right to say a single solitary negative thing, you put him there, what did you think would happen? Now all of us get to pay for your idiocy.

[shanev137]

I''m so sick of hearing about this topic.

For starters, most of the high price of gas in socialist countries is TAX....TAX that goes to pay for all their subsidized health care, subsidized education, and subsidized public transportation.....WHICH IS EVERYWHERE....so in most cities you don''t even need to own a car to get around.....unlike here in the US, where everything is spread out horizontally instead of vertically.

Dumb article....worse than trying to comparing apples to oranges.

[angelline-2009]

sure they tell you about how high oil prices are in Europe NOW so you think ours aren''''t so bad, well wake up, Europe''''s prices have always been much higher than ours. There are some discuss on the site WEALTHYBEAUTY.c om

[stn_sage]

FKCaCBS has a valid point when he says one affect of this news story might be to convince American consumers that what they''re paying for a gallon of gas isn''t really so bad! Whether one likes this approach is a matter of individual taste. He is also correct when he states prices in Europe have been high for a long time---for DECADES everyone. As a result---

Cars in Europe are smaller,more fuel efficient, and they are further advanced in bringing onto the streets vehicles that rely on alternative forms of energy---such as electric or water-powered!

But, in light of HUGE oil industry profits, subsidies, and paybacks---at some point, maybe the next president---can and/or should step-in and initiate price controls!!