WHY would any company sell their oil for $25, if the world price is $125?
Are you going to sell your house for 1/4 of the price of the other houses on your block, to be a nice guy?
Earth to Tatze.......come in Tatze.....
I would look at it as an opportunity to undercut the competition and bring in more business. $25 was just an example. My point in using that low a number was that oil companies were profitable when the cost of a barrel of oil was that low.
I understand charging what you can, in this case the market price, but I’m not understanding the internal workings of it. Does Exxon or any oil company own every step of the process? Drilling, refining, corner station? If so, the only thing that changes is the amount they charge themselves for the oil. And if so, then their profit margin is not the 8-10% they are reporting. Some obviously buy oil from foreign sources. But I’m asking about the ones that drill here and sell here. Do they sell to themselves or is some step of the process a different company?
I guess the real difference is that oil is a commodity, not just some random product. The economics work a little differently.