Gas Prices

[MissileMan]

Apparently, higher gas prices aren't in response to a price increase in crude. The oil companies jacked up gas prices so they could make a bigger profit.
http://www.washingtonpost.com/wp-dyn/content/article/2005/04/28/AR2005042801906.html

Anyone else thinks that's ?

 

[Mr. P]

Apparently, higher gas prices aren't in response to a price increase in crude. The oil companies jacked up gas prices so they could make a bigger profit.
http://www.washingtonpost.com/wp-dyn/content/article/2005/04/28/AR2005042801906.html

Anyone else thinks that's ?

It's called gouging, right? Any reasonably intelligent person knew this was going on, but what are you going to do? I am NOT a supporter of Gov. intervention into business, but I think this needs to be addressed.
There is no reason for prises to be so high. The bad news, they most likely will never be below $2/gal
again..

 

[no1tovote4]

Prices are still well below the 1970s when adjusted for inflation, even with companies increasing prices in order to create more profit.

 

[dmp]

Prices are still well below the 1970s when adjusted for inflation, even with companies increasing prices in order to create more profit.

That doesn't excuse it...it's unethical - what they do.

 

[dilloduck]

That doesn't excuse it...it's unethical - what they do.

I would hope that ANY business would hope to make a profit. Is that bad?

 

[sitarro]

I find it awful hard to believe that these are profit figures . When I worked for a rig company in the 70s they rented a small jackup rig for 100,000 dollars a day . Most would drill for a minimum of 30 days and a lot of times would hit dry holes . Ad the price of all of the supplies , the crews , the service companies , helicopter and boats rentals , leases , insurance and all of the other cost involved with being on a platform 100 miles out in the Gulf to the salaries of everyone in the infrastructure of the company and then refining cost and I don't believe that there could possibly be that high of a profit margin .
Now bottled water , that is a different story .. . a dollar for a 16 ounce bottle of filtered water? How about that crappy assed coffee at Starbucks , 5 bucks for two shots of coffee in some warm chocolate milk ?What is the profit margins on that stuff ?
The people that work in the oil industry work very dangerous jobs . The technology involved in finding , drilling , extracting , refining has become more and more expensive and complex . These people also work harder than anyone I have ever seen in all kinds of weather 24 hours a day . I have been on rigs 130 miles out in 23 degree temperatures , 50 mile an hour winds and sleet , nothing stops the drilling .
I'm curious . . . what would be a "fair" price for their products?

 

[insein]

It's called gouging, right? Any reasonably intelligent person knew this was going on, but what are you going to do? I am NOT a supporter of Gov. intervention into business, but I think this needs to be addressed.
There is no reason for prises to be so high. The bad news, they most likely will never be below $2/gal
again..

You are correct. I begin pondering this the other day. Each week we reach another new deci-level for gas. Every week we hope to see it go down just a few cents. So when it jumps from 2.15 to 2.45 in 4 days, then back to 2.35 after a week, we feel relieved. I came to the realization that they (oil companies) know this and we will never see a 1 in front of our gas prices EVER again.

The thing is, the level at which people cant afford it hasnt been reached yet. People still drive more then ever. Instead of walking to the 7/11 down the street, we drive. I know im guilty of it myself sometimes. Then we all drive to our relatives that live 50+ miles away when we could do without it. Most have jobs that involve ridiculous commutes of 2+ hours each way. We do it to ourselves.

While im sure oil companies can make tons of money at lower prices, why should they? We keep on buying it at 2.45 as much as we did at 1.45. Im not saying it doesnt suck. Im just saying from their standpoint, they can get away with it, so why not do it. :bj2:

 

[007]

I find it awful hard to believe that these are profit figures . When I worked for a rig company in the 70s they rented a small jackup rig for 100,000 dollars a day . Most would drill for a minimum of 30 days and a lot of times would hit dry holes . Ad the price of all of the supplies , the crews , the service companies , helicopter and boats rentals , leases , insurance and all of the other cost involved with being on a platform 100 miles out in the Gulf to the salaries of everyone in the infrastructure of the company and then refining cost and I don't believe that there could possibly be that high of a profit margin .
Now bottled water , that is a different story .. . a dollar for a 16 ounce bottle of filtered water? How about that crappy assed coffee at Starbucks , 5 bucks for two shots of coffee in some warm chocolate milk ?What is the profit margins on that stuff ?
The people that work in the oil industry work very dangerous jobs . The technology involved in finding , drilling , extracting , refining has become more and more expensive and complex . These people also work harder than anyone I have ever seen in all kinds of weather 24 hours a day . I have been on rigs 130 miles out in 23 degree temperatures , 50 mile an hour winds and sleet , nothing stops the drilling .
I'm curious . . . what would be a "fair" price for their products?

Maybe that's true of getting oil out of the gulf, but over in the middle east, where all you have to do is stick a pipe in the ground and the stuff comes boiling out, what over head do they have there?

The oil companies are filthy rich, and powerful enough to hike the crap out of thier prices with complete impunity from retrobution. The money's too big for any politician to go near it. Politicians whore themselves out to money.

 

[sitarro]

It is very easy to blame faceless oil companies but are they the ones truely to blame ? How about the asswipe do nothings on Wall Street jacking up the price of oil with their speculative buying and selling?
I don't have any ties to big oil but I can see that it is very simplistic to blame them , everyone should take some of the blame . If you drive a vehicle that gets 8 miles to the gallon and commute 40 miles to work every day; point the finger at yourself (that's TEN gallons a day just for your commute). If you are one of the hysterical environmentalist that has prevented our country from using Nuclear power or building new refineries tap yourself on the shoulder . If, after the gas stations raise their prices just for Memorial Day weekend and you insist on still having to drive across the country to Lake Powell pulling a boat behind your RV , you are the spoiled ass that will never do anything about the constant fluctuations at the pump . Americans are the ones that have been allowing what is happening now by making dumb ass decisions every day .Choosing to listen to the ad agencies and getting talked into rediculous vehicles that weight several tons and have huge engines to tool down the highway at 90 miles an hour while watching DVDs and talking on the phone. . .great choices!
Quit blaming the oil companies for keeping the price of their efforts artificially low for many years , I doubt that there are many out there that would take on the risk of spending the capital it takes to punch holes in the earth blindly looking for prehistoric liquid gold .If it is so easy why isn't everyone working in the oil industry ?
Oh by the way , those rediculous gas guzzling land yachts are 50,000 dollars , who are the ones making outrageous profits that can afford to drive those?

 

[sitarro]

Maybe that's true of getting oil out of the gulf, but over in the middle east, where all you have to do is stick a pipe in the ground and the stuff comes boiling out, what over head do they have there?

The oil companies are filthy rich, and powerful enough to hike the crap out of thier prices with complete impunity from retrobution. The money's too big for any politician to go near it. Politicians whore themselves out to money.

Well Pale ,
How about Harley , are we really suppose to believe that there is a value in an 18 to 20 thousand dollar motorcycle that the engineers haven't figured out how to muffle or get it to idle correctly. Harley Davidson has taken their new found popularity and rode it all of the way to the bank . How much obscene profit are they making just off of leather jackets and dew rags .
It may be less expensive to drill in the Middle East in the desert but then there are plenty of other costs involved . You have to pay people to live or die in that hell hole and then ship that crude back to the states where it gets changed magically to gasoline .
Again , it is not the capitalistic way to criticise another man's profit , if you could be making it you would too .The fact that Harley can still be selling those gaudy, loud, lead sleds is a testament to how well capitalism works . If you can create a market , you can sell products that are clearly no match for their competition merely by talking people into thinking they are cool .
Now go ahead and ding me for speaking the truth .

 

[Mr. P]

sitarro...I understand and somewhat agree with what you have posted..
However, IMO a comparison of motorcycle companies to oil companies is not valid.
If Harley is asking 20k for a bike I have the option of buying a Honda or whatever.
If GM is asking 50k for a truck, I have the option of looking to another manufacturer.
What choice do we have with Gas? Where is the competition?

For the record...I think oil companies should make as much profit as possible, until
the cost to the public begins to affect other parts of the economy, which it is now.
Oil companies must be more responsible...IMO..Gas is a necessity, and the Countries
economy depends on it. And don't forget...they are making massive profits..They could be
a bit more flexible.

 

[sitarro]

sitarro...I understand and somewhat agree with what you have posted..
However, IMO a comparison of motorcycle companies to oil companies is not valid.
If Harley is asking 20k for a bike I have the option of buying a Honda or whatever.
If GM is asking 50k for a truck, I have the option of looking to another manufacturer.
What choice do we have with Gas? Where is the competition?

For the record...I think oil companies should make as much profit as possible, until
the cost to the public begins to affect other parts of the economy, which it is now.
Oil companies must be more responsible...IMO..Gas is a necessity, and the Countries
economy depends on it. And don't forget...they are making massive profits..They could be
a bit more flexible.

You think that maybe there is a bit of bias in this article?. . .

"Increasing demand in China, India and elsewhere has pushed the world's oil production close to its limits, leaving little cushion in the event of a terrorist attack or some other problem that affects production. Concern over those issues has caused traders to bid up the price of crude."

Traders have been forced to drive the price of crude oil up?That is where the responcibility lies . . . Wall Street! The oil companies haven't raised the price of what they do , Wall Street has raised the price of crude.

Americans have brought most of this on themselves by giving total control to the gasoline producers . We have made assinine choices from moving hours away from where we work and refusing to use mass transit to our choices in what we drive, bigger isn't always better.Same with home size , how many 3000 -6000 square foot homes are inhabited by 2 people. what is the point of a home that size . Not only are houses too big they are poorely designed . Why aren't homes oriented to the sun rather than some street front . By taking the sun's path into consideration a home can be designed to be much more energy efficient . But then developers wouldn't be able to get the highest amount of profit possible .
Again , blame the oil companies if it makes you feel better about your own choices in life.

 

[Mr. P]

You think that maybe there is a bit of bias in this article?. . .

A bit bias? Hell no.. Extremely bias is more like it.

"Increasing demand in China, India and elsewhere has pushed the world's oil production close to its limits,

........Greenpeace/ Environmentalist

Traders have been forced to drive the price of crude oil up?That is where the responsibility lies . . . Wall Street!

.....Anti-capitalist...Socialist

Americans have brought most of this on themselves

.......Anti-USA

But then developers wouldn't be able to get the highest amount of profit possible .

.......Anti-business

 

[MissileMan]

You think that maybe there is a bit of bias in this article?. . .

"Increasing demand in China, India and elsewhere has pushed the world's oil production close to its limits, leaving little cushion in the event of a terrorist attack or some other problem that affects production. Concern over those issues has caused traders to bid up the price of crude."

Except that even with this increase in crude prices, Mobil had record profits. Which means that the increase in crude apparently had little effect on Mobil's production cost, or they jacked up gas prices by a significantly higher percentage than the increase in the price of crude.

 

[JOKER96BRAVO]

You know what's funny?
I heard a story on the radio about gas prices.
They compaired other Would be items priced by the gallon like pepto
and it was kinda funny.

 

[elephant]

sitarro...I understand and somewhat agree with what you have posted..
However, IMO a comparison of motorcycle companies to oil companies is not valid.
If Harley is asking 20k for a bike I have the option of buying a Honda or whatever.
If GM is asking 50k for a truck, I have the option of looking to another manufacturer.
What choice do we have with Gas? Where is the competition?

For the record...I think oil companies should make as much profit as possible, until
the cost to the public begins to affect other parts of the economy, which it is now.
Oil companies must be more responsible...IMO..Gas is a necessity, and the Countries
economy depends on it. And don't forget...they are making massive profits..They could be
a bit more flexible.

The competition:

Ride the bus or a train
Move closer to your work
Buy a vehicle that gets better MPG - hybrid or natural gas cars, maybe a motorcycle

I know these are not substitutes for gas, but for transportation, that is why we use gas right?

These companies should be allowed to charge whatever price they want.

 

[elephant]

Except that even with this increase in crude prices, Mobil had record profits. Which means that the increase in crude apparently had little effect on Mobil's production cost, or they jacked up gas prices by a significantly higher percentage than the increase in the price of crude.

Because they already owned oil reserves, and oil was increasing in price, they sold some of the oil or some of the options they own and make profit.

They raise prices at the pumps because people are willing to pay. They make profit.

These two actions are not necessarily related. Except that they are both profitable.

Mobil is in business to make profit and doing so keeps the shareholders happy.

 

[Mr. P]

The competition:

Ride the bus or a train
Move closer to your work
Buy a vehicle that gets better MPG - hybrid or natural gas cars, maybe a motorcycle

I know these are not substitutes for gas, but for transportation, that is why we use gas right?

These companies should be allowed to charge whatever price they want.

Your list does not address price market competition. :blah2:

 

[elephant]

Your list does not address price market competition. :blah2:

The market for gasoline is an oligopoly and does act like a market from Economics 1. Redefining the market as one step removed, that is, we buy gas to travel, introduces a large enough number of competitors that "perfect competition" is the best description of the "new" market.

A relative decrease in the price of substitute transportation will decrease the demand for gas and gas prices will eventually decrease to the marginal cost of production.

 

[Mr. P]

The market for gasoline is an oligopoly and does act like a market from Economics 1. Redefining the market as one step removed, that is, we buy gas to travel, introduces a large enough number of competitors that "perfect competition" is the best description of the "new" market.

A relative decrease in the price of substitute transportation will decrease the demand for gas and gas prices will eventually decrease to the marginal cost of production.

Sure I understand that and agree for the most part.
However, even if mass transit became a reality, I as an oil company
CEO with close ties to the other few CEOs would simply agree to cut production and keep prices high to maintain that profit. Call it collusion or price leader, it doesn't matter nothing changes. This helps no one. So what we truly need is MORE competition..Be it alternative fuel
or new wells from different companies. IMO