Fuel prices - interesting article

[Texas Diesel]

Arizona's report, unveiled last week, says, "Profit margins realized by every segment of the oil industry were two or three times their normal margins. "



The attorney general's office said state data for 2006 show that crude oil prices have risen 14%, but the difference between what oil companies pay for crude oil and prices at the pump has soared 130%.





http://news.yahoo.com/s/usatoday/20060502/bs_usatoday/statesfindittoughtoprovegaspricesillegal

 

[Shrimpy]

Try reading this one, it doesen't have the slant of a political State's attorney general.



http://www.iht.com/bin/print_ipub.php?file=/articles/2006/04/30/business/web.0430oil.php

 

[Texas Diesel]

I could accept that *IF* the oil companies were not posting RECORD profits. That seems to indicate where the dollars are ending up.

 

[Shrimpy]

No argument from me on where they end up. Big oil over the last 5 years has spent billions laying the infrastructure to be able to move and market ethanol. They also spent billions maintaining the gasoline infrastructure per required EPA rules (double wall storage tanks, vapor recovery at gas stations, etc. ) when oil was $12 to $17 per barrel (as late as Jan. 2002) But big oil is not the be all, end all, jack the-prices-up-at-will monster as has been described here and by the MSM.



Corn growers will reap benefits from ethanol production, should we raise taxes on corn growers and burn them at the cross?????? I think not!!!!!!! They are benefitting from OUTSIDE MARKET FORCES. If tomorrow, someone found a method of extracting more ethanol from a different type of plant, whomever is growing that plant now could be described as receiving a wind fall.



Jim

 

[klenger]

So, what happes to the price of food if we convert to ethanol? Again, it's all supply and demand. Be careful what you ask for, you might not like it.

 

[MCummings]

Walk into your favorite high-end resteraunt, and you'll hear the waiter say...



"We have a special today,, either caviar, or a side of corn, same price"





Merrick

 

[steveinaz]

Try this on for size...

http://wjz.com/seenon/local_story_224095326.html

 

[hammersley]

Shocking - Oil Companies really screwing us on the PR!

I was listening to an "Oil Exoert" today on the radio and he said that what is not being reported is that the Major Oil Companies ARE NOT PAYING $72/BBL or whatever the traded amount is that day--those sre for the spot markets and anybody that has to buy outside of those sources like the independent down the street - and the actual CONTRACTED COST from OPEC for the 5 major oil companies in the US is averaging $25/BBL! Coupling that with the 40% domestic production from existing wells at an average cost of somewhere near $8/BBL IS WHERE THE PROFITS ARE COMING FROM! Let's be realistic - this trading MUST BE REGULATED! It is not currently being done!



Look at the statement from SHRIMPY's article.....



In January 2002, oil was at $18 a barrel.



With gasoline in the United States now costing more than $3 a gallon, energy prices may be a political liability for the Bush administration. But for outside investors ? hedge funds, investment banks, mutual funds and pension funds and the like ? the resurgence in the oil market has been a golden opportunity.



"Gold prices don't go up just because jewelers need more gold, they go up because gold is an investment," said Roger Diwan, a partner with PFC Energy, a Washington-based consultant. "The same has happened to oil. "



Changes in the way oil is traded have contributed their part as well. On Nymex, oil contracts held mostly by hedge funds ? essentially private investment vehicles for the wealthy and institutions, run by traders who share the risks and rewards with their partners ? rose to more than 1 billion barrels this month, twice the amount held five years ago.



Beyond that, trading has also increased outside official exchanges, including swaps or over-the-counter trades conducted directly between, say, a bank and an airline. And that comes on top of the normal trading long conducted by oil companies, commercial oil brokers, or funds held by investment banks.



"Five years ago, our futures exchange was a small group of physical oil players," said Jeffrey Sprecher, the chief executive of Intercontinental Exchange, the Atlanta-based electronic exchange where about half of all oil futures are traded. "Now there are all sorts of new investors in trading commodity futures, much of which is backed by pension fund money. "