Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: SengirV
Oil companies play no part in the present gas prices? Really? You’re going with that?

Here's a little lesson on economics. Of course oil companies always make as much money as they can, but that is a function of both price and volume.

They cannot unilaterally raise prices, because they have competition, and their volume would drop to zero, if they raised prices too much.

They could make more money by producing much more oil, and lowering prices a bit to get more sales volume, but the government prevents them from producing more oil in the U.S. There are oil fields offshore, and in Alaska, that would easily be cost effective for them to develop, were it not for government interference.

People often get upset with the supplier, when the price of something they need (or want badly) goes up, but they seldom take a rational look at the economics of the situation.

12 posted on 04/15/2008 2:48:21 PM PDT by 3niner (War is one game where the home team always loses.)
[ Post Reply | Private Reply | To 3 | View Replies ]


To: 3niner

Don’t forget that they don’t just “make” gasoline anymore...

The EPA mandates several special blends for the major metropolitan areas of the country, which has the added effect of short supply. This results as refineries shut down and flush out one production run for say Chicago, then produce the L.A. blend, and so on and so forth...


18 posted on 04/15/2008 3:43:33 PM PDT by shotgun
[ Post Reply | Private Reply | To 12 | View Replies ]

To: 3niner

I suggest you read this article - http://www.reuters.com/article/reutersEdge/idUSL014607420071001

Future speculation is causing oil prices to go up. When do you ever see higher volume lead to higher prices? That’s easy, when speculation outstrips the supply.

Can you please tell me who does speculation on oil futures? Hmmm, could it be the ONLY companies that can actually take deliveries on such product? That’s right, your friendly neighborhood “innocent” oil companies.


19 posted on 04/15/2008 4:47:48 PM PDT by SengirV
[ Post Reply | Private Reply | To 12 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson