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.
Diego1618 wrote:The [retail] dealer is making about eight to ten cents a gallon (gross). On Monday he gets a load but then he gets another load on Saturday which costs him 30 cents a gallon more. A load is 9000 gallons x .30 cents = $2700.00. If he sold every drop of that previous load before Saturday at the original price he made $900.00 profit....on "THAT" load. Now all of a sudden he has to pay an additional $2700.00 for the next load. Prescription for bankruptcy! If he does not increase his prices daily to account for the wholesale price increases along the the line....well, I'm sure you can now understand the problem.
Which follows, "If Dr. X can do an appendectomy, so can I."
Armchair quarterbacks can never fail.
Saddam did not have the capability to disrupt oil supplies?
Price and Costs have no mathematical relationship.
It does not matter if it's jelly beans or gasoline. Price is determined by the market and is a function of supply and demand. The producer can attempt to control his costs, but he can not set price based on those costs.
All producers want their costs to be lower than price, but are not always successful at that --- see General Motors.
The war is absolutely about oil. Without oil, Saddam wouldn't have the resources to threaten his neighbors or us. Without oil, Iran would not be manipulating the market like it is. Without oil, Saudi terrorists wouldn't haven't been able to raise the funds to launch attacks. Every time we fill up our pump, we are directly or indirectly sending money to fundamentalist regimes in the MiddleEast. And when they begin to act up, we pay through our taxes (or our children will) to send our forces over there (not to mention the great sacricifices that we ask our enlisted soliders to make)
I'd contend that in today's world, the most patriotic person on the road is not the person in a big SUV with an american flag bumper sticker, it's the guy on a bicycle.
You are a rather nasty human being?
Reason one. They have to make enough money from the gas in their tanks today to pay for the next delivery.
Reason two. You don't stop buying it when the price goes up -- i.e. you are willing to pay a higher price so they are willing to charge it. They do the exact same thing you would do in your business.
Dividends on common stock are puny. Maybe shareholders are hoping for a run-up in stock price, but that is not spectacular either.
Contortions of reality are not reality.
Saddam demanded surrender to his power. If it's not one thing, it's another. All folks had to do is bow down to the SOB's demands and everything would be peaceful.
Sorry. I'm not really. The ignorance about this subject is so widespread and deep that I am more alarmed than anything. When I see Republicans, who should know better, getting on this bandwagon I feel for the country. If we wind up with state owned oil companies because of this it is no one's fault but our own.
I'll make this bet with any Freeper: oil wil be cheaper in the future if the free market is allowed to work. Oil will be more expensive in the future if not.
OK, now I've got a bit of time to answer.
Concerning how there is no oil shortage, and how there's actually an oil glut, if you do a news search on the words "oil glut", you'll find some current information on this subject.
http://news.google.com/news?hl=en&tab=wn&q=%22oil+glut%22&ie=UTF-8&scoring=d
Here's an article that might be worth posting.
Peak Oil Panic
http://www.reason.com/0605/fe.rb.peak.shtml
Here's another.
State seeks remedy to oil glut
http://www.jacksonholestartrib.com/articles/2006/03/28/news/wyoming/f235263e68876d708725713f0004b4e6.txt
As far saying the price of gas or oil is too high, or that it's ridiculous, that of course is just my opinion, verses the opinion of those who say it's really cheap at this price, and actually worth a lot more.
At least Dr. X would be a doctor.
When did Thomas Sowell become an economist?
You are aware he has a Ph.D in economics, right?
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