How could American Oil Companies lower the price? Or Could they?

[TLI]

You are quite welcome. I can only thank the many posters right herein FR for all the ideas, information and historical fact.

BTW, as we move into the future and plan ahead we should think about how we use the energy source. Examples... All future power plants should be Nuke or Clean Coal. Reserve the natural gas for heating homes. That will allow more fuel oil to be used in diesel trucks because it is not heating houses. The natural gas can. You can heat a home it natural gas but you can not get the hauling capacity by trying to run the 18 wheeler on it.

Get the automakers together on a relatively cheap electric car and start building the new technology Nuke power plants to handle the extra overnight charging demand. And get the automakers off the shoebox on a roller-skate designs. Hello GM / Ford / Honda your designs are BUTT-UGLY. Build these and we will buy.

However, you are going to have to give up on the $109,000 price tag. In return we will come off the 0-60mph in 3.9 seconds thing.

[#1CTYankee]

"But you can’t drive your car on geothermal energy. We need to develop mass production electric cars, then we can use the electric grid and on-site electric generation to power our cars."

The whole idea of alternative energy to to free up oil for other uses.

Obviously geothermal is not for powering road vehicles it's to free up heat, cooling and power generation from other means.

Why use coal, oil, natural gas, nuclear or others for electric generation?

Free, it's free!!! how is that a bad thing?

[Koblenz]

So if a company bought property with a lot of oil, or it signed a long term contract to pump oil at a fixed price, and the price of oil rises sharply, then yes, the oil company is doing well. In your scenario, it would be making significant profits. Of course, the same would apply if the company simply bought a lot of oil when it was cheap and put that oil in storage tanks.

Oil companies, however, buy a lot of crude or pay a commission based on the current market price.

[Tatze]

Oil companies, however, buy a lot of crude or pay a commission based on the current market price.

That was the piece I was missing. Thanks! So its the Federal Government getting rich with the commissions in addition to the taxes?

[Dog Gone]

Let's say that under Congressional pressure all of America's oil companies got together and said they were going to sell their oil at $50 per barrel.

They would all go to jail for attempting to set prices in collusion.

The misconception here is that oil companies can set the price for the oil they produce. They don't. They get the world price for what the produce whatever that might be.

Theoretically, Anadarko Petroleum could enter into a contract with a refiner to sell all of next year's production at $100/bbl. That would be legal.

They wouldn't do that unless they had a damn good reason to believe that oil prices for next year would average below that, or the shareholders would kick them all out.

If oil prices rose to $150/bbl for the year, the refiner would be in great shape as he could undersell the competition and increase market share.

But it's just not going to happen. There is too much uncertainty in the market right now for anyone to lock into a long-term price contract.