[HoustonCurmudgeon]

DG

I have neither the time nor patience to explain Oilfield Eco 101 to this poster. You care to do it?

[NovemberCharlie]

How about I try, I made a thing on this last time gas prices spiked:

Here's the Supply/Demand curves for oil.
 

 |\       /S  |  |        /S  |  |  \     /S
 | \     /    |  |       /    |  |   \   /
 |  \   /     |  |\     /     |  |    \ /
 |   \ /      |  | \   /      |  |-----X
$|----X       | $|  \ /       | $|    /|\
 |   /|\      |  |---X        |  |   / | \
 |  / | \     |  |  /|\       |  |  /  |  \D
 | /  |  \    |  | / | \D     |  | /   |
 |/___|___\D  |  |/__|__\__   |  |/____|___
  Oil Sold    |   Oil Sold    |   Oil Sold
              |               |
   All Cos.   | Exxon/Mobil,  | Other Cos.,
Before Boycott|During Boycott |During Boycott
              |               |
              |               |

This is why it wouldn't work. When you boycott Exxon, the demand curve for Exxon moves to the left. Since Exxon is selling less oil, they charge less for it.
But, assuming the total demand stays the same, those boycotters will go to Texaco, BP/Amoco, ELF, etc.,driving their prices up. So, by boycotting, you raise prices for yourself, and lower them for the people who stay with Exxon. This means there will be tremendous incentive to break the boycott, and buy from Exxon.
Once the boycott fails, the prices go right back to there they started.
 
 

Here's the profits.

      _             _
 |\  / \           / \
 | \ | |           | |
 |  /   \         /   \
 | | \   |       |     |
$| |  \  |       |     |
 |/    \  \     /       \
 ||     \ |     |       |
 ||      \|     |       |
 |________\    /         \

This is a very bad rendition of a parabola, pulled out to the side to make it slightly easier to see.  The parabola represents total income for the company, number of units sold times price of sale. If you sell too high, your loss of volume will sap revenue. Sell low, and you don't make enough on each to make a profit.

[breakem]

I can explain it in two words: record profits.

[RBroadfoot]

Can't waste my time either, but Snopes has a pretty good write-up:

http://www.snopes.com/inboxer/petition/gasout.htm

[RBroadfoot]

Can't waste my time either, but Snopes has a pretty good write-up:

http://www.snopes.com/inboxer/petition/gasout.htm

[danamco]

I have neither the time nor patience to explain Oilfield Eco 101 to this poster. You care to do it?


How come when the gas station lowers his price, the other guy on the corner across from him does the same???

[SAJ]

Curmudgeon -- Nor am I inclined to chip in with a companion piece on NYMEX, exhaustion curves, replacement cost, distribution considerations, back-end costs, and/or secondary and tertiary storage (or the lack thereof).

Am I correct in guessing that you, like I, view this price level as a combination of mkt cyclics and an attempt by OPEC to interfere in this year's election?

FReegards!