Why Gas is Going Up

Basic thoughts which reflect my posts when gas was 2.00 a few weeks ago "sorry to say I told you so" are:
1. Its going up because it can. Seniments in the American public were far too high when it was 2.20/gal for it to "not" go up.
As long as seniments are high, that tells the greed guys in the highback leather chairs sitting in their skyscraper lofted offices that the market will bear higher prices... WE were baited perfectly!...
Now prices are high "before the summer run" and gives them an excuse.
2. The real bottom line after all the foo foo is mentioned.. the excused, reasons and the why's is that they are again making record profits?????????????????????????????????????????????????????????????????????????????????????????????//

If any of those excuses pan out, then why the record profits too?
Isn't their greed causing them to overplay their hand?

they aren't just satisfied with a healthy profit, but they have to have rape and pillage.

We are still buying SUV's and 8 bangers which only tells them, the turnip still have blood to give.

And they don't want to build refineries... that would lower the price... more work and less profit is not what they want...
they like the ideal of less work, more profit!

 

<div class='quotetop'>QUOTE(DaveinOlyWA @ Apr 26 2006, 12:30 PM) [snapback]245660[/snapback]</div>

yep.. we're screwed.. I wouldn't be surprised if it bumps 4.00/gal this time.

 

Oil and gasoline are commodities. Their prices rise and fall according to what the BUYER wants to pay. If the buyer wants/needs it, he is willing to pay more. If the buyer isn't willing to pay, the price goes down. You can have the rarest gem in the world. If no one wants to buy it, it's just another rock.

The oil companies are making record profits because it doesn't cost that much more to pull oil out of the ground now as when oil was $30 a barrel. So yes the guys in the leather chairs are saying "Hmmm...I can sell to one guy for $30 a barrel or another for $75 a barrel. Tough decision. NOT!!!"

It's an auction folks. With the product going to the highest bidder.

 

<div class='quotetop'>QUOTE(Whitestar @ Apr 28 2006, 05:14 PM) [snapback]246817[/snapback]</div>

Hmmm..... I'm going to make a note of this. And everytime something becomes more expensive than I LIKE, I'll take out my note and refresh my memory.

Fror every effect there is a cause. Using Occam's razor, look first for the simplest, most obvious explanation. Inso? Yah, hey, you betcha!!!! B)

 

Which is precisely why W's search for naughtiness on the part of the oil companies is ridiculous. They're not doing anything wrong. They're just enjoying the fruits of supply and demand. Since no one is willing to step up and actually state the problem the "solutions" will be misguided and ineffective.... idiots. It's sad that personal responsibility has been driven from the American psyche. Personal responsibilty on the part of American drivers would make this all so much easier.

 

<div class='quotetop'>QUOTE(tripp @ Apr 28 2006, 03:25 PM) [snapback]246878[/snapback]</div>

Not only are they not doing anything wrong, they are avoiding action by the feds against them by selling at what the market will bear. No public corporation can ignore the Sarbanes-Oxley requirement that they do all in their power to make money for their stockholders (provided they don't break any laws.)

 

OK, now how about this?


http://www.nytimes.com/2006/04/29/business...artner=homepage


And another element. The fantastic profits racked up the refining and distributing companies actually arise from the simple concept of "mark-up". They are applying the same percentage to the $70 crude that they did when it was $50 or less. Yet their costs for the value they add to the product are pretty much fixed.
So they should be getting a fixed fee rather than a %age markup.

But you never hear this mentioned in their press releases or in news reporting, which should be at least that analytical.

 

<div class='quotetop'>QUOTE(genalex @ Apr 29 2006, 01:24 AM) [snapback]247073[/snapback]</div>

Yes, the major oil companies had record profits last quarter. Way into the billions. Real big number. But, what many people can't seem to grasp is the scale of the number of gallons of gasoline sold to make that profit. You see such large profits and assume that it must be because a large precentage of what you pay for gas becomes their profit.

In fact, Exxon, Chevron, and Connaco-Phillips made only 8.19% profit last quarter.

So lets turn that into real numbers relating to what you pay for gas. The national average for state and federal taxes is 42 cents a gallon. So if gas is $3.00 a gallon, $2.58 is what the gas station is taking in, and 42 cents is the tax. Lets assume that all gas stations are oil company owned, which is clearly not the case, and assume that all $2.58 per gallon counts as the oil companies' sales.

Therefore, the oil company is making 21 cents a gallon in profit. (in reality, since the oil companies are not the final seller in most cases, the number is less)

So let's take all the profit away from the oil company. At most, you would drop the price of gas only 21 cents. So instead of $3.00 a gallon, it's $2.79 a gallon. Does that make you happy now?

 

Oh gee, looks like cheveron made a record 4 billion dollars in its last statement.... too bad oil cost so much....

I wonder how they are making such a profit if it cost so much????????

Who is going to stop this rape and pillage?

 

[/quote]
So let's take all the profit away from the oil company. At most, you would drop the price of gas only 21 cents. So instead of $3.00 a gallon, it's $2.79 a gallon. Does that make you happy now?
[/quote]


No, what makes me happy is owning a Prius.

The secret of getting rich in the US market lies in replication. That 21cents multiplied by gozillion gallons really add up. The issue here is one of a near national emergency. I'm biased, 'cause I was around when prices and profits were controlled and everyone had to give up all but essential driving. (It was called WW2 and we're now called the greatest generation.)

My point is that sacrifice is called for at every level if we're going to prevent this runaway of fuel costs from producing a genuine inflation across the entire economy. That's when your salary no longer meets your expenses and the value of your savings gets eroded. Prelude to depression. (I was here for that too.)

Maybe if some of us senior citizens were in Congress or the Administration, we'd be more alert and pro-active rather than diddling around with $100 band-aid proposals.

 

<div class='quotetop'>QUOTE(genalex @ Apr 30 2006, 11:43 PM) [snapback]247838[/snapback]</div>

With all respect.. I disagree.... I see it more like the company trying to see how much more work they can squeeze out of you to "survive".... then when they see you can do it... it becomes precidence and they expect it.. meanwhile you find out they are making more money than ever....

Its just a ploy to squeeze and make the public feel there is really a reason for the high prices since they are having to sacrifice.

If we saved enough to shave off 50% of our usage, they would only raise the price because they are selling less....
Its not supply "of gas" verses demand... its more like politics to see how much the market will bear... there is a difference..

I'm not too old, but I've been around long enough to see twice now the economy thrown for a loop due to oil shortages just find out after the fact that there were no shortages at all and that we were all buffalowed into thier chess game.

We are pawns... simple as that.

It about forcing the golden goose to crank out as many eggs as she will bear without killing her.

We have not made more refineries because we "don't" want more oil.. that would lower the price.

We have plenty of oil..... when I see the big oil companies getting in trouble "like the airlines" and running danger of going out of business because oil cost so much and the market cannot bear to pay for it...
But thats not the case at all!... they are making big time record profits.

Oil does't cost them more... why should it cost us more?...

Just because oil is trading at 75 dollars.. the amount they are selling it to us is too far inflated.. .hence the massive profits......

 

I think it will go just above $4/gallon then drop back to like the mid 30's. That gives us all time to adjust before it goes above $4 a gallon permanently. I think that the oil industry has many, many studies on how to do this. They know what we will tolerate and for how long.

 

<div class='quotetop'>QUOTE(hdrygas @ May 4 2006, 08:38 PM) [snapback]250057[/snapback]</div>

I agree with your estimate... unless we smarten up and go to congress this time and actually impliment some laws into action.

Last time they appeased us and we backed off.... until there are laws in place that "force" them to limit thier profits, they will do anything and everything they can.

They live so high above the laws of the common man that they see this merely as a market that is made to manipulate to their advantage and likeing.

There is a reason energy, telephone companies, utilites have been limited.... we ever we are dependent upon a monopoly, they should not be able to destroy the economy for thier own gain.

Problem is.... they back off just shy of destruction, in order not to kill thier golden goose.

I hope this makes us mad enough to do something about it.

I hope they cut their own throat by making it advantageous to develope alternative energies they cannot control like solar, hydro and wind.

It would sure be a pleasure to break free from thier grip and control and watch them stain thier leather chairs with thier tears when they are no longer needed.

Its true.... we are addicted to thier drug, until we get pissed enough, we will be thier servant and at thier mercy.

 

<div class='quotetop'>QUOTE(windstrings @ May 5 2006, 01:22 AM) [snapback]250097[/snapback]</div>

Please add nuclear energy to your list of alternatives. I think by now our experience with this form of power generation and our advancement in technology makes us ready to accept more nuclear power plants than the few we have in operation. I believe the public phobea is not justified by the experience in the US in the design, management and safety implementations of current and future installations.

 

I spoke to my daughter in Italy last night. I told her what gas prices were doing here. Her husbands grandparents are there visiting and when they left the states on 4/20 gas was $2.79. It was $3.33 thhis AM. I asked her if there had been significant increases in their gas, no their prices are pretty stable, but higher as most of our out of country posters have told us.

Question to folks outside the US.....Do you see the same wild fluctuation in gas prices that we see here?

I think this is just a clear statement to the manipulation that windstrings and hdrygas have alluded to.

 

<div class='quotetop'>QUOTE(genalex @ May 5 2006, 12:21 AM) [snapback]250122[/snapback]</div>

Nuclear is a wonderful Ideal in theory.... but they can completely "control" it since we cannot produce, harness, prepare, and transport it ourselves.

Until we start using energy that "we" can access without thier special help, they will have us over a barrel.

Nuclear is a good ideal as a nation etc.. but on a more personal level, we will be manipulated with nuclear just like with oil.
If what I'm saying is true and that there is no real immediate shortage and in fact we are just being manipulated, why would it be any different with nuclear?

Best case scenario is that home electricity would become very cheap and we have efficient plugin cars.

Until then, tapping into wind, hydro, and solar is the best practicle near reach solution... and even those won't work till "again" we have efficient plug in cars.

 

<div class='quotetop'>QUOTE(Salsawonder @ May 5 2006, 09:50 AM) [snapback]250242[/snapback]</div>

but what's their consumption look like compared to ours? We consume such a massive amount of oil and we get it from a wide variety of sources, many foreign that we're suseptible to shocks. Considering that global supply is very close to demand it doesn't surprise me that we've seen a significant rise in prices. Oil is a commodity. It will sell for whatever people are willing to pay for it. US gas prices are probably artificially low, if anything.

Windstrings, you're only a pawn if you let yourself be one. Since you own 2 prii, I'm assuming that you're not allowing it to be so. The American entitlement is the real problem. Genalex has referred to the problem. The Gov't (dems and pubs) is unwilling to face the music. Their statements send the message "You're entitled to cheap gas", which is the root of the problem. The American public needs a collective backhanded pimp slap. We're our own worst enemy in this case. The sooner we realise it, the sooner we'll take real action.

Whining about the oil comanies profits isn't the solution. They're following market principles. If demand were not so close to supply, prices would be lower.