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.
How does the US government regulate the world oil market traders? Key word here is WORLD
No outrage. I don't buy it. I have no choice about gasoline as there is no public transportation in my area.
And since when did 10.6% profit become record.
ExxonMobil is the merger of two huge Oil companies to make 1 giant Oil company.
The 36.1 Billon profit was on 370 billion of sales.
Less than 10 % profit.>>Is that the new Govt. imposed limit for any business or investment?
Who should get to set profit levels?
Would you like your investments or 401K to be limited to a maximum profit of 10%
If it costs a farmer $2/bushel to grow corn,Should his sale price be a max of $2.20/bushel??
Consumption was down last month
Maybe here (but I don't think so) but it's a world market.
You'd be a hero. A broke one, but a hero nonetheless.
The rates to sell the product you have is based on the price of future supply and right now the price of gasoline is very violatile, pardon the pun.
Those with longer memories remember the debates of the earlier oil embargoes and price hikes. Gas shortages because of price fixing. It is damn pricey right now, but it's available too. No economist uses nominal numbers when it comes to long term trends, but politicians and the media do, for different reasons.
First, a barrel of oil is a barrel of oil, it is fungible.
Yes, we sell Alaskan crude the the Japanese, because it is closer, not because we are being ripped off. The nominal number of dollars (whatever that is) changes over time. The price of oil in dollars is an abstraction, unless you actually have to buy it, which is another issue ;)
As an aside, during the good old days a gallon cost approx. .26c, say, maybe .35, for a long time.
I collected coins as a kid, and right now a pre-65 quarter is "worth" about $2.50 because in those days, they were made of silver and copper, not copper and nickle like today. Too, demand is far higher.
What's happened in the US is wages have GONE DOWN relative to the price of oil. There's a price to be paid for inflationary welfare statist spending, defense umbrella for half the world, etc,. We live in a wonderful country, where so much has been given by so many in so many ways -
America is still the last best hope, no matter what the self-doubters try to tell you.
The "invisible hand" of the marketplace is grabbing our b*lls and twisting.
So the oil companies own assets (oil and oil fields) that have increased considerably in value. Do you expect them to pretend that this hasn't happened, and, out of the goodness of their hearts, sell it to consumers at far below its market value?
--put very simply, if you are a retailer, you sell the gas you have on hand at a price reflecting what it will cost to replace it--
Stop driving. Live in a cave and show them!
A meager ten percent profit is not greed. You might want to read Dr. Sewell's basic Economics book. You don't seem to have a clue about markets.
All you can think about is "poor me". The rules haven't changed since I started driving in 1960. If I can't afford the gas, I stay home. PERIOD.
I think it's ironic, the extreme sacrifices that "the greatest generation" went through during WWII. Now the country is filled with whiney snots complaining that gas prices are too high. Grow up. There are bigger problems in this country than what you pay for a tank of gas. Which ones are you solving?
Just paid 3.29 a gallon today. The clerk told me he had just received a fax to hike it 10 cents. Chevron. I would have drove into town and bought from Arco, but as usual...the tank was empty.
This whole thing is a buttload of BS. The more platitudes I hear from politicans and oil companies, the angrier I get.
Those who own the oil sell it for the highest price they can get. If they could get $175 per barrel, that's what the price would be.
That's the free market. The reason why oil is twice as expensive as it was four years ago is, like the stock price of dot-com stock seven years ago, based on what people are willing to pay.
Now, there's a lot of reasons traders are willing to pay the higher price. Here are some. One, instability because of the Amadineslob of Iran and the commie of Venezuela. Two, demand increases in China and India. Three, growth in the U.S. economy (we pay $3 per gallon because we can afford it). Four, year after year of bigger low gas mileage cars (we bought 'em cause they're cool) that aren't your Dad's old Datsun 210 or Chevy Chevette. Five, nitwit DemocRATS who voted against domestic drilling.
RIGHT!
I have been telling my whining lib friends this for years. We don't have to be "self-sufficient" to lower prices. If the US produced 2 million more barrels a day (we easily have the oil in ANWR and offshore), that would provide the cushion on the world market needed to push prices down.
I am sick of libs saying that since ANWR won't supply the US will all its oil, there's no point in drilling there.
Even better you can say stuff like Nancy Pelosi, and even get away with it......Pelosi: "Americans Are Paying the Price at the Pump for Republican Corruption"
*rolling eyes*
That's the ticket!
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