Hi Everybody
I have a few questions…
1. If the US is petroleum independent, why are our gas prices higher?
2. If farmers can’t sell their US beef, why have our beef prices gone through the roof? Why aren’t prices coming down if we have an abundance of beef?
3. Soy beans – If other countries aren’t buying our soy beans, why don’t the farmers develop livestock feed with soybeans? Horse feed has doubled in price and soy is a plant based protein source and could be made into horse feed.
I just need an educated answers to these questions.
Thanks for reading.
Questions about inflating prices “supply and demand”
byu/Alternative-Mix6568 ineconomy
Posted by Alternative-Mix6568
1 Comment
The idea of US being net exporter is an oversimplified argument. There are distinctions that matter: crude versus petroleum (which also includes natural gas derived oil and in fact makes a substantial part of it). Within crude, there’s light/sweet and heavy/sour crude. A large part of oil trade involves the latter one, and US imports around 7 million barrels per day as a result of it. To put that in perspective, 7 million barrels is 2x the oil produced by UAE. A little over half this import comes from Canada and Mexico.
The export itself is about petroleum products that are refined in the USA. So, despite of the argument that USA is generally the net exporter for last 5-6 years, the price impact from global crude prices is going to exist, along with the fact that companies will raise prices at every opportunity to profit from it.