Hey jmh80,
The oil companies LOVE it when the price of oil goes up, and
wouldn't doubt it one bit if they encourage high prices. No telling
how they or what they do to keep it high...
The economics of oil is a little more complicated than that. There are different types of crude that can be refined to certain products, not all to gasoline. There are a myriad of suppliers around the world. There are also a myriad of reasons for high gas prices and the high price of oil overall. Uncertainty, a shitload of regulations saying what gas can be sold where, requiring separate shipping, storage, etc. A shitload more regulations stopping the building of new refineries. No ownership in resources, pushing oil companies into a present oriented mode which usually leads to wild price fluctuations. Etc. The oil companies don't love it anymore than anyone else because a high price doesn't automatically translate into a high profit. People make a mistake when they think that when a price goes up the difference between the previous and current price is pure profit. If Americans, of which I am one, are sick of paying so much for gas, they should stop driving so much.
PRICE GOUGING, and it's going on right now....
8 billion $ profit , give me a break, how about building some
oil refineries ? They been saying that for years.....
Try getting one built. You'll also find a shitload of economists who are finally admitting price gouging is a political concept, not an economic one. The owner of something has the right to charge whatever they want for it. Don't like it, don't buy it.
I guarantee that Oil companies are testing the american people right now
as far as how high they can raise the price of oil/gas before
the majority of people start walking the streets in protest.
Yup, that's exactly what they want. To spark protests in the street against themselves.
It's amazing how fast the gas stations raise the price of gas from one
day to the next , and so slow to bring it down when the price of oil
goes down.
Uncertainty hits fast and dies slow. It's just a fact of life. Perhaps if oil companies were allowed ownership of the resources they bust their asses to find instead of submitting to freedom of the seas they could allocate resources better. That way if they tap a field it doesn't have to be pumped dry before someone else comes in and does it. This would allow companies more freedom to speculate on future trends and hold back some production in the present to allocate those resources to the future, where they're needed. It's the difference of seeing prices go real low and then real high and seeing them go moderately lower and then a lot higher, ie. (1.65 to 2.15 per gallon instead of 1.25 to 2.95 per gallon). Also we in the US could drop regional regulations so gas that's sold in one state can be sold in another. That would relax shipping and storage costs. That would also make it easier for refineries to cover each other if one has to drop below operating at near 100% capacity. Right now since the same gas can't be sold everywhere regional shortages can and do lead to more wild price fluctuations. Speaking of which, kill the NIMBY groups so more refineries can be built.
Glad you're making a profit, but more than a few americans are starting to
feel the crunch......
at least the ones I know.....
joe
If he weren't making a profit the business wouldn't be there producing oil to begin with. He has a right to profit from his work.
No one has the
right to cheap oil or gas at some elses' expense, whatever they may
expect. Since the market when allowed to operate without interference has reduced the prices of everything from computers to cars to clothes to televisions, maybe we could get the government out of the business of fucking with the oil markets so heavily and regulating the related industries so heavily and you'd see a price drop over time like in any other business. If they're starting to feel the crunch the market is doing what it should. A resource exists which is surrounded by uncertainty and high demand. The price goes up, people buy less, this heads off future shortages which would happen if companies were forced to keep selling at artificially lower prices. So it comes down to this: would you rather have gas at near 3 bucks a gallon now or 2 bucks a gallon now and then 6 bucks a gallon in a year, or no gas at all in a year?
Despite the winces of pain they can cause, prices, any price, are just information. They are a measure of value, the only objective one that exists.