It's the same old song, but not by the Four Tops: Blame the Oil Companies for Surging Gas Prices

We've been here before. Gasoline prices go up and a Democrat President wants to throw the DoJ at the oil companies. This is from the Washington Free Beacon:

Gas prices in the United States reached a seven-year high in November, with the average gallon of gas costing $3.41. One year ago, gas cost, on average, $1.29 less. Based on data from the American Automobile Association, Americans are spending roughly $19.65 more to fill up their cars than they did a year ago.
While the president alleges illegal activity by oil and gas companies, market analysts consistently point to a worldwide spike in demand as the primary driver of higher gas prices. Higher costs are not limited to the United States, with heating oil prices in the United Kingdom set to increase by 12 percent this winter when compared with last year. Biden's letter comes just days after White House Press Secretary Jen Psaki said higher gas prices show why Americans should transition to more "clean energy options."
Damien Courvalin, a senior commodity strategist at Goldman Sachs, warned that, without more investment in production from oil companies, gas prices could stay higher for several years. Democrats' demands that oil companies stop drilling activity, Courvalin said in an interview last month, will cause "much higher energy prices in the coming years."

So why is the Biden administration going after the oil companies? Who shut down the Keystone Pipeline? Who is talking about shutting down the Great Lakes' Line 5 pipeline? I hear that it pumps millions of gallons of oil into the United States. Who said during the campaign that he'd stop oil companies from constructing any refineries in the United States?

The average tax on a gallon of gas is about 50 cents (federal is about .18, and it varies by state). So government makes a profit of 50 cents per gallon without having to invest a dime. I don’t know what the oil companies make, but I would be surprised if it is anything near that. My guess is maybe 2 or three cents to the gas station, and what 10 cents to the oil company. Correct my numbers if I am wrong, but, who really is the greedy profiteer here?

“Blame the Oil Companies for Surging Gas Prices”

yep, right out of the ol’ Venezuelan playbook:

accusations of “profiteering” is a standard excuse in despotic governments whose “policies” cause wreck and ruin of their economies via runaway inflation and shortages of all basic goods necessary to live ... next up after “profiteering” are price “controls”, which guarantee the instant disappearance of any remaining such basic goods since the cost to produce said goods is always less than the allowed prices ... and finally, “nationalization” (confiscation) of the means of production is the last act of desperation, which guarantees that there will be no possibility of restoring any previous level of basic standard of living ...

https://www.investopedia.com/terms/c/crackspread.asp

About 17 bucks in gross margined on a barrel of oil at a dock to delivery to retail vendor. Add another 3 bucks if the pump is owned by the refiner.

From WTI -

20 Gallons of gasoline
12 Gallons of Low Sulfer D.

35-50 cents a gallon on gasoline before paying for the refinery, the storage, the distribution. .25 cents a gallon in NET profit is a excellent number for BP US midewest refinery.

https://www.cmegroup.com/markets/energy/refined-products/rbob-crack-spread-swap-futures.html

“supply and demand”

Not hard to understand. But this isn’t a matter of supply and demand. When one of the components of the assembly line of any product heading for the consumer’s money is remove, part or all of the supply of the product, for covert gains, that’s called robbery, not inflation. Inflation is a part of the supply and purchase chain. It’s what determines our markets and stocks.

The false narrative is not coming from the ones that create or buy the supply. It is all part of holding the need by graft thus creating the inflation. Supply and demand is based upon an existing product. It exists but is being withheld partially or totally.

wy69

“If you reduce the supply...”

If the supply is reduced by storms, insects, mad cow disease, or any other natural reason, that’s the definition we agree upon. But I’m saying this is not a supply problem when the product is being taken away for covert reason and not naturally. It is being done for gain of profit or power to reduce the capacity of the US. And that’s criminal here.

The same thing is being done at the ports on the left coast to create shortfall, thus inflation based upon intentional product reduction by the feds to generate funds and power over voters as Uncle Sugar is staying in the shadows. Not telling the whole truth by the port groups is just as much a lie as the feds assisting and hiding. Much bigger scale however and not as covert as people get hungry before they need to go buy the food and spend the gas. Better, more noticeable, effect.

wy69

I actually work IN THIS INDUSTRY, and used to work for little places like SHELL and BP in Houston and now work for huge pipeline company.

There is no COVERT taken away oil. Can you prove that?
Capacity reduction is only on FED LAND LEASES and Stopping of KEYSTONE XL which had flowed ZERO product, so that isn’t it.

This is TODAY’s news. https://oilprice.com/Energy/Energy-General/US-Oil-Rig-Count-Rises-As-Oil-Prices-Slide.html

Just saying that the only reason that I can see is money supply is up 32% and inflation on equipment to produce oil has gone up. At our company everything is more expensive. Those push prices up, lack of trucking, lack of drivers, lack of workers at plants and sites.

If you look at the actuals in RIG Count, (Expand to 5 yrs)
https://oilprice.com/rig-count
You can see the supply dropped of rigs until Trump took office then it jumped and prices fell (Supply/Demand) and then you can see the rig count dump when Biden took over and the oil prices rose (Supply/Demand)

Not sure what covert or unnatural thing you see. This is real stats and data on what is actually happening. Inflation and Reduction in E&P and Drilling made for more dollars chasing less product. ECON101 Stuff.

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