What Happened to Greedy Oil Companies and Speculators?

[HBarlow]

$3???? I'm paying $3. 60.

JDiepstra,

You live in MI!

The answers to why fuel is more expensive in some states than in others can be seen on tables listing the state tax on gasoline and diesel fuel that is applied in each state.

In every state where the democraps hold a majority in the state house and state senate and where the governor is a democrap, fuel taxes, all taxes, will be higher. The folks who promise you miracles always screw you by increasing your taxes.

 

[JDiepstra]

You are precisely correct and I am pleased to say we agree. That has been my argument from day one of this extended discussion . . . that the high price of gasoline and diesel fuel has been due to the high price of crude oil as you accurately calculated and explained it above, not to excess profits by the oil companies or due to the speculators involvement in the markets.



Now that the price of the main ingredient of gasoline and diesel fuel has dropped due to a significant decline in worldwide demand for crude oil, we are able to pay a more reasonable price for refined products.



The profit structure of the oil companies was not higher during the peak price period and is probably not lower now. The oil companies make a few cents per gallon after their expenses as you laid them out in your post.

Since you want to talk about math, figure this one out.



How did Exxon Mobile break their own profit record by $3,000,000,000 ( 3 BILLION) dollars in the last quarter if demand is down and their profit per gallon is not up?

 

[KKohagen]

Exxon like most large oil companies make a huge majority of profit and revenues off of selling the crude oil @ market prices. A very small portion is made from each gallon of gasoline/diesel etc. When you sell a lot of a gioven product at a given profit margin then you can make more money. Millionsand millions of gallons of fuel are sold every day in the US. Does Coca-Cola make a lot of profit off of each soda can, probably not, but they sure do sell a heck of a lot of soda.
There are many more factors that go into the price of a given gallon of gas/diesel. I make the stuff and yet many times we, in the business, do not fully understand what is the latest reason for prices to go up or down.
Demand plays a huge part of it. The refineries running well and on-test, every time, no unplanned shut downs... .
In many ways all of you guys are right. It is not a simple supply vs. demand price structure.
The nice clean, low sulfur crudes that we have been using in the past is more expensive because a lot of refineries were originally designed to run that kind of crude oil, such as Alaska North Slope. Now the cheap crudes such as those from Latin America and South America, Venezuela/Brazil etc. .
Are cheap because they are harder to process, more acid, higher sulfur content, high asphaltenes, high mercaptans, high aromatics... .
These go into the refining pot as it were and the units have to deal with what there are given. Refineries update their equipment to run many different amounts of these different crudes. Equipment that has to be paid by someone.....
Direct costs associated with the new equipment gets passed onto the consumer, they are the ones buying the product... .
I think the prices should be lower, however realistically we have been paying lower prices for a long time.
Bottom Line the Oil business is not a simple supply versus demand.
Off my soap box now...

 

[BigPapa]

I make the stuff... ... .....



Bottom Line the Oil business is not a simple supply versus demand.

Thank you K.

 

[ekroman]

First of all, prices in markets are always "sticky" in the downward direction. They'll always rise much faster than they will fall.



120 years ago, when oil was pumped and refined, it was used as a lubricant. Kerosene was used for lighting. Gasoline (and similar substances) were an extremely flammable waste product that was poured out on the ground, until someone figure out you can use it for internal combustion engines.



Today, and for the last 30 years or so, oil companies make most of their money in PLASTICS, which are made from crude oil. The gasoline isn't the focus of their profitability. They also make quite a bit of money on credit cards, which people use to charge fuel and pay over time, often at high interest rates.



I've noticed a lot more 4 cylinder cars on the roads in the last two years. With the increase in smaller cars versus large cars, the demand for fuel will decrease, and the prices will fall to a normal equilibrium.



Eddie

 

[robertyoke]

I've noticed a lot more 4 cylinder cars on the roads in the last two years. With the increase in smaller cars versus large cars, the demand for fuel will decrease, and the prices will fall to a normal equilibrium.



Eddie[/QUOTE]





except now GM and FMC are selling the big suv now again... . so the cycle will continue.

 

[robertyoke]

So tell oh smart one how does our economy work? How does everything YOU own get transported to where you purchase it? Magnetic propulsion? Nope an oil burner! SO the huge rise in the cost of EVERYTHING that has happened in the last year had nothing to do with the doubling of fuel cost? And so Wall Street investors (speculators) dont lose money, is that what your saying? Huh thats a new one to me. $700,000,000,000 could be could be considered a loss no? I just hope this recession lasts about another 20 years maybe that will teach people to EARN there money and not invest in smoke in mirrors which is Wall ST.

700,000,000,000..... thats a lot of zeros!! not as many as in washington... . :-laf, but still a lot of zero's