Oil exec: Prices driven by 'fundamentals'(congress still ignoring the need for domestic supplies)

CNN ^ | 5/21/2008 | Steve Hargreaves

[tobyhill]

NEW YORK (CNNMoney.com) -- Amid increasing public outcry over record-shattering oil and gas prices, senators hauled company executives in to testify Wednesday to ask what's behind the recent runup.

The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which topped $130 a barrel earlier in the day. The committee is set to question executives from Exxon Mobil (XOM, Fortune 500), ConocoPhillips (COP, Fortune 500), Shell Oil Co. (RDSA), Chevron (CVX, Fortune 500) and BP (BP).

"Normal supply and demand says prices should be around $55 to $60 a barrel," said Sen. Patrick Leahy, D-Vt., chairman of the committee. "Prices should not skyrocket like this in a properly functioning, competitive market."

Before the hearing even began, a heckler in the crowd shouted: "Stop ripping off the American public - bring these oil prices down."

But a top executive from BP said the high prices are being driven by global forces.

"We cannot change the world market," said Robert Malone, chairman and president of BP America Inc. "Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation."

[RightWhale]

we would be receiving the same amount of oil from there as we do from Saudi Arabia.

Probably not. Peak flow from ANWR would be about one million bpd and would last about a year. Then it would tail off. It would have been severely tailing off by now.

[wastedyears]

That sounds like fun.

[wastedyears]

Was this the same Jim Gilmore that ran for President?

[Lazamataz]

Sure, it’s always fun and games until someone puts an eye out.

[RightWhale]

Peak Oil in terms of velocity is now and has been since November. Reserves means either what is in the ground or what could be lifted right now but isn’t for whatever volitional choice. The bivocality is the exact cause of this continued non-comprehension of Peak Oil.

[Lazamataz]

Radioactive Nazi Zombies.

(shudder)

[Enchante]

"Prices should not skyrocket like this in a properly functioning, competitive market."

Well how can the market function properly, Sen. Leaky Leahy, when Demagogue jackals like YOU have conspired for years to limit crude oil production, constrain refinery output, and interfere with companies and the markets in countless ways? How can these 'Rats and RINOs sit there and say stuff like this with a straight face??

[Enchante]

"The U.S. purchases and consumes over 50% of the world’s oil"

WRONG. It's more like 22-23% and we are not in control so long as demand is pushing close to the limits of current available supply. When the Demagogues and RINOs allow the USA to actually maximize our own oil production then we might have a basis for bashing companies and countries. Until then, we are in the preposterous position of having screaming Demagogues like Leahy bleating about pricing and supply while blocking off substantial areas of potential production offshore and in ANWR.

[kempo]

Wrong, it takes 10 years to put ANWR on line. It would have started this year and the amount would have been almost exactly what we are getting from the country of Saudi Arabia for the next twenty years.

[mickie]

Just before he left office didn't BJclinton protect tens of thousands of acres of prime coal land so it couldn't be mined? Think it was to the benefit of another FOB. Wonder how much was donated to his "library"?

Also, Mario Cumo as Governor of NY. dismantled a nuclear power plant on Long Island, just months before it was to open. This plant cost the taxpayers billions of dollars and it was ruined so bad it could never be restarted. That SOB.......we are suffering now.

[Caipirabob]

We're all gonna turn into flesh-eating zombies.

I want to be the "fast, rage-virus" kind, not the shambling, stumbling, slow type. I'd like to get around for my brains, see the country and eat new people and all that...

[RightWhale]

It should be so simple, but it isn’t.

[count-your-change]

Here is bit of an article at mises.org, “What You Should Know About Inflation”, 3/11/08, by Henry Hazlitt,
“It is also an oversimplification to say that the value of an individual dollar depends simply on the present supply of dollars outstanding. It depends also on the expected future supply of dollars. If most people fear, for example, that the supply of dollars is going to be even greater a year from now than at present, then the present value of the dollar (as measured by its purchasing power) will be lower than the present quantity of dollars would otherwise warrant.”
Inflation decreases the cost of a dollar and no one really expects that to change. Right now the cost of a dollar is about 125th. of a barrel of oil and as expectations are that it will be even less in the future prices are bid up in the hope of ataying ahead of the inflation. Since I think the dollar I recieve today will be worth less in the near future I want more of them for my barrel of oil so I can purchase the same amount of goods tomorrow with my oil as I can today.
So the price of oil goes up not according to supply and demand of oil but supply and demand of dollars and the expectations of a greater supply of dollars.

[Anonymous Rex]

The vast majority of the speculators live and work here in the U.S. It would be easy enough to round them up and start looking into their financial transactions.

[Anonymous Rex]

Record profits on the part of the big oil companies is not being generated solely on an increase in production, it’s being generated on the artificially inflated cost of oil. They are complicit in that artificial inflation and anyone who doesn’t believe that has their head in the sand.

When they say things like “we’re doing what’s best for our shareholders” they are admitting it.

[wastedyears]

[kellynla]

"big oil?"



"The U.S. purchases and consumes over 50% of the world’s oil."

Which is inaccurate.

America imports about 25%.

"we purchase 50% of our oil from the world?"

Which is more accurate but entirely different from your previous statement. But according to the Dept. of Energy, "The DOE reports 38% of fossil fuels are imported while 62% are produced domestically."http://www.americanchronicle.com/articles/49977

[Anonymous Rex]

We aren’t talking about fossil fuels, we’re talking about oil, and as I had already said before when I corrected myself, my hands were faster than my brain.

[Anonymous Rex]

And yes, big oil. As in their CEO’s, board of directors, etc.

They have stated that they’re doing what’s best for THEIR shareholders, everyone else and our economy be damned.

[kellynla]

and if you have an IRA and/or a mutual fund,
more than likely you are part of “big oil.” LMAO