Does this graph help? Changes in enviromental regulations including ethanol caused refineries to shut down to make adjustments to the process. This happens every spring but combined with ethanol replacing MTBE requirements was a disaster.
Posted on 04/26/2006 6:35:00 PM PDT by Blood of Tyrants
Okay, I have seen a LOT of threads claiming that oil companies aren't really making that much on each gallon of gasoline.
Oh, really? (blink, blink) Then explain the record profits by the oil companies.
Why sure. First, US oil companies don't import all of their oil. In fact several companies actually import very little. Where do they get it? Why, from wells on private and federal land that they drilled on years and years ago. What is the extraction cost to get it out of these wells? You can be darned sure that it is nowhere near $75 a barrel. In fact, I read that it is somewhere around $7 to $15 a barrel. Add to this cost a small royalty that they pay the federal government or private land owner and refining and transportation cost and you come up with maybe $25 a barrel.
Now, mix in the oil they bought 3 or 4 months ago at $52 a barrel that is just now coming to the refinery and you have an average of between $25 and $40 a barrel.
So what we have is huge profits at the expense of the consumer. How long will it last? The prices will start to drop once they feel they are starting to harm the economy. Congress and the media and the consumers stop bothering them and they look for the next opportunity to do it all over again.
It is supply and demand. Just because you don't understand economics doesn't mean it isn't true.
Demand is not the amount consumed. It is a curve of how much consumers are willing to buy at different prices.
You understand. Congrats
Actually, Iraq had been out of OPEC for many years.
It was gotten back into OPEC, as soon as the Saddam statues started to fall.
Do you know what LIFO means? FIFO? Go Google it, learn it and then come back. I suppose that if you owned a refined commodity and the price of it skyrocketed you would gladly sell it for the pre sky-rocket price. Well it sure would be nice to buy all my gasoline from danmar.
BTW, when oil gets cheap again, as it most certainly will, I'll be looking for your post about how those poor oil companies can make any money at these prices.
How did you manage to get a sign-up date that is tomorrow's date: 4/27/06? Are you trapped in a time warp in the Romulon galaxy?
Have you shared them or did I miss it?
All I know is that alternative energy sources are light years away from being available and cost effective at the moment. Some of us drive older vehicles, and with the added costs of getting to the store and to the doctor, who can save for one of these hybrids, even if we wanted one? Mine is a 4 cylinder, and we quit using the Explorer 18 months ago!
You bet it's not a free market mode, but it gets so bloody confusing, that I hate to comment. Pass the diaper wipes, and the grocery money for next week...
If my memory serves me right, the Countries you have mentioned been around for some time. Are you telling me that those countries have changed their habit overnight?
Does this graph help? Changes in enviromental regulations including ethanol caused refineries to shut down to make adjustments to the process. This happens every spring but combined with ethanol replacing MTBE requirements was a disaster.
I may be the odd one in the bunch but I'll say yes to that question...
When I go to the gas station, I feel as though they are holding a gun to my head when I pay them, because I'm certainly not doing it willingly...
The CEO gets a bonus of almost a half a billion dollars...There is no person on the face of the earth that is worth anywher near that much money...They are just squandering the money they basically robbed from me and millions of other Americans...
So how does this work??? Do the speculators actually bid on the crude like at an auction??? The Arabs sound like they control the price of crude...I read yesterday that the Saudi's don't want the oil to go below 60 dollars a barrel???
And I'll add, it's even more tragic when Freepers, who should know better, join the whiners.
AMEN.
The oil & gas industry is primarily driven by the free market forces of supply and demand. Governmnent taxation, regulation, tariffs, and limits on exploration interfere with free market forces in some ways and impede free market forces. But it's basically a world-wide free market system, with one big exception: OPEC is a foreign cartel that restricts output to maintain higher prices. Right now OPEC has very little excess capacity so the cartel is not having any significant effect on prices, but they did cause higher prices 3-5 years ago.
Are you really that silly? There are myraid forces at work that all affect prices. Underlying it all, and the reason why gas prices have been trending up over years is exactly that these countries ARE changing their habits.
China, Indonesia, Thailand, Korea, Oman, Pakistan, Brazil, Argentina, India; go anywhere and find the same thing, an explosion of automobiles. My friend, you are standing in a very long line of gas buyers, and you had better get used to being outbid.
Tomorrow. I have to go to work tomorrow in hopes of increasing the supply of oil.
Way past my bedtime. I'll try to respond in the morning.
"don't understand economics"?
Ha!
How about simple math?
If the price is up many times what the demand is that equals market manipulation, and price fixing.
On the other hand if "Demand is not the amount consumed", then the "curve of how much consumers are willing to buy at different prices" must be a measure of how badly you can swindle consumers before they lynch you.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.