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.
The only reason you and like thinkers have this conspiracy theory of high gas prices is that you aren't thinking worldwide.
If you can convince me that there is some vast worldwide conspiracy, or even the existence of an organization with the power or influence capable of creating a conspiracy of this size and success, that has nothing to do with the hundreds of millions of new cars and drivers multiplying all across the globe over the past two decades all of whom are lining up to compete with you for gasoline, then maybe I'd be sympathetic.
I think you ought to start gritting and get cool.
Educate yourself and come back when you can make some sense.
I was going to respond to that post too, but my head was spinning and threatening to explode...I didn't know where to begin, I just wanted to cry. I like how you put your response.
What does that have to do with anything? I want the cost of crude to drop to $15 a barrel. There. I said it. By your logic, "xjcsa sounds like he controls the price of crude."
Oil prices have tripled since 2001. Gas prices have only doubled.
Oil prices have tripled since 2001. Gas prices have only doubled.
DId anyone heat Frank Lautenburg on Fox News today(about 4:30 or so, maybe 5:00) when he was speaking about the cost of Gasoline (he was with Cavuto or someone). He jabbered on for several minutes trying to lay ALL of the blame at the feet of W and "big oil". BUT.... when Cavuto(I think it was) asked him about the Demoncrats plan, and if it contained any NEW supply, he spoke double-talk about conservation, preserving the enviroment, alternative fuels and such. Not ONE thing he suggested will help the situation a BIT!! "no drilling in Alaska/pacific/Atlantic/ Mexico," (IOW.. BANANA.) So if THEY get their way, gas will most likely go WAY up, not down!!
The point is, regardless of the price of an item, or what the item is, the cost of the item compared to the value of the item. Less than 10% profit on a gallon of gas compared to 1000%+ profit on a pint of water pulled from the public water system. Government make more profit on gas, alcohol, and cigarettes than the manufacturers, distributors, warehousers, and sales outlets combined do. No one likes $3 gas. But it is a bargain, cheaper than it used to be, (comparative) and available.
Throwing stones at glass houses? You've never suffered from greed?
Maybe it was just over your head. Signed up today but I doubt you are a newbie.
It's not supply and demand that have taken oil prices this high. Prices have risen much faster and higher than demand has. Also production has been increased.
If Thomas Sowell can be an economist, so can I.
I'll take simple math over doubletalk any day.
Try this on for size: demand and price are the SAME THING! If there is not demand for gas at $3 a gallon or oil at $70 a barrel, then it won't sell and the price will drop. But there *is* demand at those prices right now, so they are sustained.
If your posts represent the economic understanding of the Constitution Party, then I'm very surprised. And staying far away.
Cut & Paste.
Folks with a lot more information than me generated that graph.
This Week In Petroleum, Gasoline, Energy Information Administration
Using that logic, we also do not have to buy a car. There are alternatives. They may not be as convenient, but you do have choices. If you want to play, you must pay.
Then as I said on another post...
Actually, we seem to be saying the same thing.
That it has nothing to do with supply and demand, and everything to do with charging whatever the market will bear.
True?
"Economics in One Lesson" by Henry Hazlitt ia another great elementary book on economics and is available online here for free.
Also, "The Concise Encyclopedia of Economics" is available online here
"Price Theory, An Intermediate Text" By David Friedman (Milton Friedman's son) is available online here.
"Cost and Choice: An Inquiry In Economic Theory" by James Buchanan is available here.
"Risk, Uncertainty, and Profit" by Frank Knight is available here.
The first book listed - "Economics in One Lesson" is an easy read and provides examples to make the concepts more accessible. All can be read by anyone unfamiliar with Economics and are great books.
AAAAArrrrrrghhh!!!!! I CAN'T TAKE IT!!!! PLEASE, FOR THE LOVE OF GOD, PLEASE TAKE AN ECONOMICS CLASS!!!!
Renewable isn't the same thing as being free. The cost of extracting oil is getting more and more expensive as companies have to drill deeper and deeper to get at it.
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