Making a Bet on Gasoline for 2006

90% 0f amateurs lose money trading commodities. The commodities market is not designed for investing.

By the time the word gets on the street it is to late.

I don't think there will be any gas shortage.

 

I would be willing to bet that Americans will buy gas and support Muslims in their spending in 2006.

 

I would have been willing to bet that the pump price of gas would have never dropped below $2.50 but I would have lost.

Why did the price drop consiering that sales didn't decrease when the price approached $3?

 

I bet I'll need gas this year.

 

Yes, but what other retail product is priced less than people are willing to pay?

Considet the econ text example about pricing theater seats. The owner raises his price until the net profit falls. But the net profit didn't fall as the price of gas was raised, indicating that gas is under priced.

 

I don't think so either. Gasoline, like any other consumer good that derives from a commodity, still adheres to the laws of supply and demand, which is why prices fluctuate. When prices go up, we always end up using less. When prices go down, we always end up using more. That's been demonstrated time after time after time. Somewhere, we've gotten this notion that we're "entitled" to low gasoline prices. Says who? Also, it seems we have short term memories. When adjusted for inflation, gasoline prices are the lowest the've been in some 20 or so years.