Congressional inquiry of Oil industry profits

If their profits have increased that drastically, then they are not simply adjusting to increased production price. Otherwise, you'd have to argue that demand has actually increased that much over the past year.

Do you buy gas in any other countries? Who cares what the price of oil is? With gas prices being the same at every gas station, that means that the individual companies are making the same profit per unit volume, assuming their production costs are the same. In the nature of competition, reducing the pump price would drive (n.p.i.) business way from their competitors. I highly doubt that production costs have increased by 65% over the past year.

With every infantile post, you only further reveal how much I get under your skin.

 

You said why can't a station undercut another station and make up for the loss in price from the higher volume. That cannot happen because the price of gas is not determined by how much the station paid for the gas in the ground......it's how much it costs to refill the tanks. Dispute that.

They are making a bunch of profit because the supply of oil went up while the capacity to refine it went down due to the hurricanes. They could buy the oil cheaper on the market (because there was more of it) but our ability to refine it was lowered because plants were shutdown. They bought it cheaper because there was more of it, but they couldn't refine it fast enough so supply of gas was less. Supply of oil higher.....supply of gas less. Therefore, higher profits. Do you get it now? You don't see that the price of oil directly influences the price of gas?

 

Wait a minute, you are aware that gas prices got way out of hand WELL in advance of the hurricanes, don't you? Please don't tell me that you're blaming high gas/oil prices on Katrina and Rita.

 

Not splitting hairs, but gas prices were well over $2/gal quite a few months before any hurricanes, as I recall...

 

i disagree because i have no problem with gas companies colluding to raise prices. like i said before, that will just hasten the scienctific developments that bring us the next kind of energy.

 

There are two things that affect the price of oil: 1.) the amount of oil in circulation throughout the world market. (Of which Exxon and others do not have enough of to make a difference. So they are BUYING a huge amount of oil to refine.) 2) Our capacity to refine it. The price of gas will never be $1.50 again since the WORLDWIDE (CC-ahole) demand is 25% higher than it was even last year and we have not kept up with demand in drilling and refining.

Our refining capacity has dropped 30% over the last 30 years. So no matter how much of a supply of oil, if we can't refine it, the price will stay higher. So while the price of oil may drop to $2.25 or $2.00 a gallon, never to what it was because even if they pump oil to meet demand, we couldn't refine it.

There are times during the year when oil is more scarce.......demand is higher during the summer months hence the already increasing gas prices. The hurricanes hit and made it worse because what little oil we could produce was stopped in the Gulf and our refineries were closed. Saudi began to pump more oil, kept the oil price down but we couldn't refine it........so gas prices stayed higher=profits.

If you guys think Exxon contols the market price of oil and gas then there is no hope.

 

you dont have to buy much gas. ride a bike, ride the subway, grow some vegetables. buy a hybrid. invest in alternatives. i dunno why complain while continuing to buy more oil. you act like it is your god-given right to have oil at a price that you like. you dont care what the oil companies want, you want to dictate to them because you know what is best.

but not necessarily oil. but maybe oil if you get your government to oppress the oil companies and force your will on them.

then stop depending on oil. when stuff gets too expensive, you shouldnt whine to the government, you should consume less, and look for alternatives.

you shouldnt always rely on the government to protect you. that a problem

 

OK, like I said eariler.........this ain't WalMart negotiating the price of Crest with Proctor.......this is oil which is refined to make gas.

Also, windfall profits occur in every market commodity at times. That money is returned to the consumer in lower prices and research to find new ways to bring that product to market.

You example is completely invalid. That would all stand true if the price of a commodity and the cost to process it stayed at a constant value, like WalMart and the cost of a tube of toothpaste. But in this case, there is no constant. Hurricanes do not stop the processing of toothpaste and the demand for toothpaste is not the same as gasoline.

Like what I stated earlier, the Exxon station on the corner is not charging you the price on the sign because that is what they paid for the gas in the tank. They are charging what it will cost them to replenish the tanks or they go out of business. This isn't Walmart and toothpaste. If it was, then that would work because the next shipment of toothpaste, costs them the same amount.

In the sale of gas, in the refining of gas, it's always about what the cost of that gas is to get it to station is to replenish what is lost. It's the future price of the gas or the future price of refining....not a constant value. Your example is not what is happening. Refineries were closed.......supply of GAS is less but demand is higher or the same. The cost to refine it changed, therefore the supply changed because less resources were available to refine the oil. Therefore the price jump to replenish what will be needed for the tanks so you can fill your truck. There is fluctuation in the amount of oil a.) and the capacity to refine it b.) Your example is a constant.........of which is never the case in oil and mainly, the capacity to refine it.

You are correct.......if gas was VO5 hairspray, there would no reason for the jump in the hairspray price. But we're talking gas and oil here. If you can't see the difference then an econ class is necessary. Everything in this world is not a conspiracy to screw you.

So Red is the smartest guy in the world since he figured out that there is a conspiracy to keep the price of gas as high as possible? Hell, in England it's $6.00 a gallon. Explain why isn't it here.......hint. They have the same amount of oil as us but.......?????

Thomas Sowell: "Prices are what pay for costs. The government can impose price controls on gasoline or petroleum tomorrow but that will not have the slightest effect on the cost of oil exploration or the cost of extracting and processing the oil that is found."

The cost of extracting oil and producing gas are NOT a CONSTANT. That is unlike your example. Toothpaste or socks would better represent your example. Not oil and gas.

Read these from economists: http://www.townhall.com/opinion/columns/walterwilliams/2005/11/09/174865.html
http://www.townhall.com/opinion/columns/walterwilliams/2005/08/31/155288.html
http://www.townhall.com/opinion/columns/thomassowell/2005/08/23/155226.html

 

I agree with everything you said. Somehow, our country has figured that gas at $1.00 is our RIGHT like free drugs is our right. I guess when anything gets expensive we have to pay to give it away.

Drugs:Too expensive, now they are free for the elderly.

Healthcare:Too expensive so Hillary will give it away.

Gasoline:Too expensive.....when will we just pay 75% taxes and give it away?

Oh, and higher prices will force innovation. Either alternatives to that commodity or innovation to bring that commodity to market at a cheaper price....gas: more drilling + more refineries. You are correct. Alternatives come with higher prices......you want to know why? People want to make more money. Apple comes to market with the IPOD and is making windfall profits. What happens: more companies copy that success by building cheaper alternatives or better, more innovative products.

This is how we will result in an alternative fuel to power our cars, houses..........