Are Oil Companies to blame for high fuel prices?

[DeepIron]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. However, at the end of the article, 83% of those polled thought "Big Oil" was making too much profit.

What do you think? Are companies like Exxon or Chevron making big profit $$$ and driving up the price of fuel at the expense of consumers?

[AVGWarhawk]

Something funny going on here. For the most part we experience a gradual increase during the summer months and the a decrease during the winter months. But, not
a decrease to the point we had seen the previouse year. So it is a slow and steady climb. Now, we see nothing but price increase to the tune of .15 cents/gallon in the past two weeks. Does not seem like much and really it is not. At any rate, the oil people need to slack up. I believe they look at the profit as a safety net when the oil prices go up in the future. They can afford to purchase it and continue the vicious cycle.

[baggygreen]

We keep getting told that the price of fuel down under relates directly to the price in Singapore.

Fine.

The price in singapore goes up 5 cents, we go up 5 cents. it goes down 4 cents, we go down 2 cents.

there is an ever-increasing difference, people are giving up trying to predict fuel prices now and an inquiry into prices "failed to find any evidence of collusion". what a crock. blind man freddy could see it!

[CaptHawkeye]

Maybe it's about time people just put up with the fact that their really isn't enough to go around anymore? :)

[AVGWarhawk]

Maybe it's about time people just put up with the fact that their really isn't enough to go around anymore? :)

Yes, it is not a infinite thing, no doubt. Alternative fuels are needed. Somehow I see us going into the industrial age and returning back to the days of horse and buggy. Oh well, I always wanted to be a farmer anyway. Live off my own land. Just make sure I have electricity to run my computer and internet. I'm not asking for much:D

[Ducimus]

If fuel prices were going up to maintain the status quo on profit margins, i can understand that. HOWEVER, in this day and age when prices are going up, and they keep announcing record breaking profits, thats f'ing bullschitt, and the smell is coming from big oil.

Its Common sense, record making profits means overpriced product, because its obviously not costing you alot to produce that product!

They (big oil) also have the politicians in their pockets, so nothing will be done about it.

[mookiemookie]

If fuel prices were going up to maintain the status quo on profit margins, i can understand that. HOWEVER, in this day and age when prices are going up, and they keep announcing record breaking profits, thats f'ing bullschitt, and the smell is coming from big oil.

Look at Exxon's average profit margin after taxes for the past 5 years (10.6%) and compare it to their profit margin for the last quarter (11.23%). I don't think it's ridiculously out of line.


http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=xom
http://finance.yahoo.com/q/ks?s=XOM

[Platapus]

As a rabid capitalist I have to question the term "too much profit".

Oil companies are not public service organizations nor are they non-profit corporations. They are in existence to make money.... as much money as they can.

It sure would be swell if the oil companies were nice guys and would keep their profits low for the betterment of society and their fellow citizens.

That aint how capitalism works.

Oil companies have the legal right to market their product at the highest price the market can bear. We have anti-trust laws to prevent gouging but it appears that the large oil companies have not violated these laws.

Naturally, I, as the customer would like the price to be lower. That is also the nature of capitalism. I feel that all companies that sell me stuff make "too much profit". :shifty:

But it aint my oil I am buyin.

It is unfortunate that my lifestyle is dependent on buying oil.

Unless we are going to nationalize the oil industry and declare it to be a national resource, there is little we can do.

[Letum]

^ what Platapus said.

You cant blame capitalism for doing what it does!
If a company stopped being 100% competitive it would not exist for long.

The only way to get around it is by government regulation of business, but this is
impossible when dealing with companies that compete world-wide on such a large scale.

Even the ultra-regulation of nationalisation would only fully work if you where oil -
self-sufficient.

[Ducimus]

Theres lies, damn lies, and statistics. The later of which is what big oil uses as an excuse for their PRICE GOUGING.

I dont think folks accross the atlantic realise just how much gas prices effect us.
Generally speaking We have no public mass transit to speak of. Most people work in the city, and live in the suburbs. A 30 minute commute (assuming no traffic) is not uncommon. Combine that with the housing BS.

Where i used to live, i drove 70 miles a day round trip as a commute. Considering most people have been forced to live further and further out of town to find affordable housing, this is like a crushing heel upon people. Theres alot more going on to the average American then the price of gas, its the effects of it, in the big picture of their daily economic lives. You want to kill the average american financialy? Jack up the gas, and watch everything else go downhill fast. The way its going, pretty soon you'll have people who can't afford to get to work, which means eventually they'll lose their homes.

Now, i don't pay that much for gas anymore because i dont use as much of it as i used to. (where 1 tank lasted me 1 week, it now lasts me 4). I live 10 miles from work now.. maybe less. But my month rent here is 3/4's of my month earnings, and it keeps going up, with no end in sight.. Housing keeps going up, which puts greater demand on retals, they keep going up, the dollar is weaking and gas prices keep going up. From where i sit, the economy looks like schitt. So when i think of those fat cats gouging our asses, recording their record profits.... ...there is no other response but ANGER.

[JetSnake]

Maybe it's about time people just put up with the fact that their really isn't enough to go around anymore? :)

You are right. Because there aren't enough refineries in the US. The amount of oil in the ground isn't the issue. It is worldwide competition, not enough drilling, not enough refineries, not enough local production in our sphere, etc.

[PhantomLord]

Quoting the german magazine "Der Spiegel": "A prayer is the answer to all your problems!"

http://www.spiegel.de/wirtschaft/0,1518,551480,00.html

A religious group formed up in Washington. Daily prayers for lower fuel prices... they call it "prayer at the pump". :hmm:
They believe the fuel price will go down like the walls of jericho.... some day...

[Tchocky]

Expensive gas isn't the problem here. Historically cheap gas is.

[Jimbuna]

Quoting the german magazine "Der Spiegel": "A prayer is the answer to all your problems!"

http://www.spiegel.de/wirtschaft/0,1518,551480,00.html

A religious group formed up in Washington. Daily prayers for lower fuel prices... they call it "prayer at the pump". :hmm:
They believe the fuel price will go down like the walls of jericho.... some day...

I think they'll be more chance of them getting bit on the bottom by a cabbage :lol:

There should be a windfall tax imposed on these gigantic fuel companies as soon as they reach a predetermined profit threshold.....but only after they have paid their political levy to the political fat cats that allow them to amass such huge sums of money. ;)

[TDK1044]

There's a difference between profit and profit margin. I think when you understand the totality of the figures involved, the oil companies are making healthy but not excessive profits.

[AVGWarhawk]

In all reality men, the oil companies can charge what they want. They know we need it and we will pay whatever they set the price .

[mookiemookie]

In all reality men, the oil companies can charge what they want. They know we need it and we will pay whatever they set the price .

But the price of oil is not set by the oil companies, it's set by commodities traders.

[bradclark1]

As a rabid capitalist I have to question the term "too much profit".

Oil companies are not public service organizations nor are they non-profit corporations. They are in existence to make money.... as much money as they can.

It sure would be swell if the oil companies were nice guys and would keep their profits low for the betterment of society and their fellow citizens.

That aint how capitalism works.

Oil companies have the legal right to market their product at the highest price the market can bear. We have anti-trust laws to prevent gouging but it appears that the large oil companies have not violated these laws.

Naturally, I, as the customer would like the price to be lower. That is also the nature of capitalism. I feel that all companies that sell me stuff make "too much profit". :shifty:

But it aint my oil I am buyin.

It is unfortunate that my lifestyle is dependent on buying oil.

Unless we are going to nationalize the oil industry and declare it to be a national resource, there is little we can do.
A whole lot of countries control the prices of drugs, except of course the U.S.of A. We spend astonomical amounts for drugs. Countries should control the cost of gas and diesel.
It's a matter of national security that we have oil and our goverment will do what it takes for our continual supply. Then the oil companies charge what they want because it's capitalism...................
We have more 12% more oil this year than last year yet we are paying considerably more this year then last. How does supply and demand work in the oil business?
Guess I'll go have a scotch because I don't like that either.

[Tchocky]

Tying oil price to the dollar, and enforcing dollar-only oil trade, has been great for the US, ushering in a long period of a strong dollar and cheap oil, now regarded as a God-given right by some. The thread should really be asking who is to blame for artificially cheap oil, even if that is somewhat snide.
A falling dollar is pushing commodity prices higher, at least a quick look at the data tells me this. I don't know if there's causation or just a correlation, but it makes sense to me.

*Price = expressed in dollars, naturally.

[McBeck]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term.
We pay above 8$ pr gallon :nope:

[August]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. We pay above 8$ pr gallon :nope:

Thank your lucky stars your country only has 16,000 sq miles, ours has over 3 million!

[STEED]

Expensive gas isn't the problem here. Historically cheap gas is.

So that's why BSE was let loose. :hmm:

Oil is power and power is money and money is controls of us that is to say while it lasts.

[Ducimus]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. We pay above 8$ pr gallon :nope:

Thank your lucky stars your country only has 16,000 sq miles, ours has over 3 million!

Europeans arent forced to commute like we are, therego they are incapable of understanding. Id like to see one commute every day accross the 91 Freeway, 35 miles to work, and back home again, 5 days a week, filling up at 4 dollars a gallon, going through a tank and a half of gas a week. Being forced to live that far because its the only affordable place to live. Then lets see if he changes his comment about "how americans think cheap gas is a god given right".

[Jimbuna]

There are a few million per day commuting into London alone. Some of them 200+ miles return per day....and paying over $10 per gallon.

[Aniuk]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. We pay above 8$ pr gallon :nope:

Thank your lucky stars your country only has 16,000 sq miles, ours has over 3 million!

Europeans arent forced to commute like we are, therego they are incapable of understanding. Id like to see one commute every day accross the 91 Freeway, 35 miles to work, and back home again, 5 days a week, filling up at 4 dollars a gallon, going through a tank and a half of gas a week. Being forced to live that far because its the only affordable place to live. Then lets see if he changes his comment about "how americans think cheap gas is a god given right".

In the Netherlands more then 10$ per gallon, although a small country, a lot of commuters doing avg. 30 miles daily one way trip. profit of SHELL a dutch oil company went historically high in the first three months of 2008 (42% more net profit and now 6.75 billion dollars). Although it's a good thing to be prudent with using energy resources it is a difficult problem and as I do not think all americans think cheap gas is a god given right, it is a little bit off a simplification to generalize and say that we do not understand the problem, I think you underestimate the commuting or overestimate the possibilities of other means of transport. I personally did 60 miles daily per train (one way trip) for over a decade to come to my work. Not only because of the price of housing, but simply because there was no housing available and affordable for me and my family. Now I have a new posting and make over 60 miles by car, no public transport alternative available. Now I will try and sink some japanese oil tankers. Realising It wont solve the problem:rotfl: . but it's good for my subsim career. Greetings from an TMO fan.

[DeepIron]

I drive approx 14,000 miles/mo at an average of 5 mpg in my Freightliner XL.

14,000 miles / 5 mpg = 2800/gals per mo X $4.15/gal = $11,620.00/mo in fuel costs.

Ouch...

[The WosMan]

Quoting the german magazine "Der Spiegel": "A prayer is the answer to all your problems!"

http://www.spiegel.de/wirtschaft/0,1518,551480,00.html

A religious group formed up in Washington. Daily prayers for lower fuel prices... they call it "prayer at the pump". :hmm:
They believe the fuel price will go down like the walls of jericho.... some day...

I think they'll be more chance of them getting bit on the bottom by a cabbage :lol:

There should be a windfall tax imposed on these gigantic fuel companies as soon as they reach a predetermined profit threshold.....but only after they have paid their political levy to the political fat cats that allow them to amass such huge sums of money. ;)

You sound like a congressman we have here where I live named Dennis Kucinich.

Look, if you put a windfall profits tax on the gas companies the only ones that would suffer is the consumer because corporations don't pay taxes, they pass them on to the people that buy their products by elevating the price.

There are many other industries that have a higher profit margin than oil companies. Further most Americans have their retirement invested in petroleum through mutual funds, 401Ks, and pension funds. The largest labor unions such as the AFL-CIO, Teamsters, NEA, UAW, and AFSCME retirement pensions are heavily invested in oil.

I love capitalism and profit. John D Rockerfeller grew up from nothing, came from a huge family and helped to raise something like 8 or 9 other siblings. He became incredibly rich by turning us into the modern oil and gasoline burning economy we have today. He created the modern industrial revolution but people hated him and were jealous. However, if it wasn't for him there would be no middle class which was also created from the many fruits of his efforts. Capital creates wealth and creates jobs and my paycheck has never been signed by a poor man.

The price is being driven up by several factors but none of it is Dick Cheney and Haliburton sitting with CEO of Exxon at a table in a dark room planning how to stick it to the American people.

1.) China and India are putting huge demand on oil because instead of riding bicycles they are all driving now.

2.) Oil is a finite resource and the wells are running dry. Saudi Arabia just had to open a new oil field and use all types of expensive drilling techniques and methods just to keep up with the 12.5 million they produce.

3.) The USA sits on the largest coal supply in the world including 1.3 trillion dollars worth of the cleanest burning coal in the world locked up in a national park in Utah. We also have nuclear technology and some of the brightest scientists and engineers at our fingertips. Further recent discoveries show that the US may have the largest supply of oil in the world as well. There is the Alaskan reserves, oil in the Gulf of Mexico and off the coast, oil under the great lakes, there is a massive deposit of oil shale all throughout the rockies, and the recently discovered Bakken Formation in North Dakota may contain 175 - 500 billion barrels of oil that could be obtained through horizontal drilling technology. As a comparison, Saudi Arabia is estimated to have 220 billion barrels remaining.

So all this said and do we build refineries? Do we drill for oil at home? Do we build coal and nuclear power plants to reduce demand on oil? The answer is no. Bureaurcracy, government, red tape, and environmental groups all block us from saving ourselves.

[jumpy]

Q: Are oil companies to blame for high fuel prices?
A: Not in the UK; for that last 10 years you can lay the rising cost of fuel firmly at gordon browns door. Prior to that it was the tories 'fuel price escalator, designed as a means of generating revenue and forcing people to use their cars less.


If a litre of petrol cost 107.9p, it would be split in the following way:

http://img262.imageshack.us/img262/5528/petrolpricesdiagramvn4.gif (http://img262.imageshack.us/img262/5528/petrolpricesdiagramvn4.gif)

http://www.petrolprices.com/fuel-tax.html

Whatever way I look at it, we pay too much tax... on just about everything here. :dead:

[The WosMan]

Interesting. Ever notice how increased prices are always the brainchild of some bureaucrat or a government policy that trys to balance one thing but only ends up screwing over the entire economy and stifles productivity?

[Ducimus]

All said and done. I CANNOT see past record setting profits, coinciding with record setting gas prices. That is just bullschitt. Plain, and simple bullschitt. I can see rasing prices to maintain a profit, but NOT a record setting profit. No amount of pro big oil statistical maniulpation will ever convince me otherwise.

[McBeck]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. We pay above 8$ pr gallon :nope:
Thank your lucky stars your country only has 16,000 sq miles, ours has over 3 million!
Europeans arent forced to commute like we are, therego they are incapable of understanding. Id like to see one commute every day accross the 91 Freeway, 35 miles to work, and back home again, 5 days a week, filling up at 4 dollars a gallon, going through a tank and a half of gas a week. Being forced to live that far because its the only affordable place to live. Then lets see if he changes his comment about "how americans think cheap gas is a god given right".
That is a rather arrogant generalization, considering how different the European countries are...eventhough Denmark is a small country I know many people who commute that same distance for the very same reasons you state. I can hardly imagine how it is Germany ,the Netherlands or the UK...

[Jimbuna]

http://money.cnn.com/2008/05/05/news/economy/gas_poll/index.htm?cnn=yes

The article mostly discusses fuel reaching up to $5.00/gal in the near term. We pay above 8$ pr gallon :nope:
Thank your lucky stars your country only has 16,000 sq miles, ours has over 3 million!
Europeans arent forced to commute like we are, therego they are incapable of understanding. Id like to see one commute every day accross the 91 Freeway, 35 miles to work, and back home again, 5 days a week, filling up at 4 dollars a gallon, going through a tank and a half of gas a week. Being forced to live that far because its the only affordable place to live. Then lets see if he changes his comment about "how americans think cheap gas is a god given right".
That is a rather arrogant generalization, considering how different the European countries are...eventhough Denmark is a small country I know many people who commute that same distance for the very same reasons you state. I can hardly imagine how it is Germany ,the Netherlands or the UK...

Agreed.....see post #25

[August]

I don't know what the national average is or whether such an average would be even relevant but a 35 mile commute is fairly short compared to what most people i know travel. 50 miles would be closer to an average i'd think.

[Tchocky]

The furthest I've had to commute has been about 25 miles, all of it on public transport/bicycle.
I remember my father doing 60 miles each way in the early 90's, that was a pain.
Higher petrol taxes pay for better public transport, so you don't have to buy expensive petrol :p

[bradclark1]

All said and done. I CANNOT see past record setting profits, coinciding with record setting gas prices. That is just bullschitt. Plain, and simple bullschitt. I can see rasing prices to maintain a profit, but NOT a record setting profit. No amount of pro big oil statistical maniulpation will ever convince me otherwise.
Yes. Thats whats ticking me off. Oil is more available this year then last by 12% yet they are pleading supply and demand while reaping record profits and frankly I don't give a ???? about somebodies 401k.

[Tchocky]

Of course you're going to have a higher supply of oil, look at the price of the stuff!

EDIT - the other factor is the more interesting one. I wonder how much it costs to insure millions of dollars worth of oil and tanker through the Strait of Hormuz? I wonder how much it cost before Operation Iraqi Freedom?

EDIT #2 - Found a nice article by the author of OilShock - http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/03/do0311.xml

in the process of reading it, thought it was relevant :)

[Catfish]

Hello,
having enough experience in the oil business myself i can tell you that what happens has not much to do with "free" capitalism any more. The market is "split" by not more than 5 major global oil companies who now talk to each other, what they did not some 15 years ago - it is more or less a cartel.
Oil is being traded as "energy" at the stock market, and price gouging is anything else than unwanted.

Apart from that crude oil is not scarce. I am sorry to say it, having read all those recent books in a cosy armchair, dealing with those horror scenarios of shortages and breakdown of civilization, which (who already guessed it?) only adds to the rising prices. But it is not scarce, and will not be for the next 200 years (ymmv). The scarceness is artificial.
Then there is "free" market economy, and there is "social" market economy. We have said goodbye to the latter some 15 years ago.

"Our" problem is that we are so lazy letting our corrupt politicians decide what to do, who again are "advised" by ... (who guessed it?), if they do not come from that industry themselves. We do not even look for other possibilities to use and conserve energy. As long as there is only gas and oil without alternative searched for, do you really think prices will fall ? Why. should. they.

Greetings,
Catfish

[August]

...do you really think prices will fall ? Why. should. they.

Because if they don't people won't be able to afford to buy their product anymore?

[Catfish]

Hello,
what would you think happens, if poorer people cannot afford it anymore ? Those managers who now make profit do not think more than, hhmm, 10 years ahead ? A typical manager of a profitable company like the "Deutsche Bank" or "ExxonMobil" has ethical values of a churchyard worm. This is what he is paid for after all.

There is no event in history that companies would have lowered prices in favour of "the poor" - in all scenarios big companies would rather go bankrupt than that, or find another strategy or product to go on. Only reason for low prices is dumping to drive another company out of the market.
Oil companies in Europe now head for hydrogen production and solar energy, and ... water resources. If you control the satisfaction of a population's vital needs you can demand any price.

There are already people in Europe who cannot afford fuel any more. It does not matter much, there are german SUV cars that burn more than 20 litres/100 km (don't know how much mpg that is), and even if there are less poor who pay, there are some rich who do not care. And believe me those SUVs sell better than ever. It is just that the difference between poor and rich is currently developing a gap that never has been that wide before. Which is a situation that certainly can become explosive by itself. I just read the 20 percent of the population who is "well off" in Germany does not care until prices reach 2 and a half Euros/litre.

Oil, ok. We speak about production. Speaking of the upstream market oil is not really being produced, it is pumped up, sometimes with a lot of technology, admitted. Having a worldwide statistic including exploration, building and maintaining rigs and drilling with an assumed failure of 70 percent, the "production" of a barrel, which is a bit more than a litre (or 159 of them to be exact) costs around 52 Dollar cents (yes, a barrel).
Now you argue there are technical costs, transportation and raffination into the different petrochemical products, taxes etc. - but you will never reach the price that is demanded today. Petrochemical companies are currently making more $$ than ever. Question is how long, but ... who cares ?

Greetings,
Catfish

[Ducimus]

That is a rather arrogant generalization, considering how different the European countries are...eventhough Denmark is a small country I know many people who commute that same distance for the very same reasons you state. I can hardly imagine how it is Germany ,the Netherlands or the UK...

Its an easy assumption to make from coutnries that have extensive subway systems, super commuter trains that are so damn slick they end up featured on televsions shows, and double decker buses.

Compartively we have very little of that. So, thinking that europeans dont commute like we do, is a very natural and easy conclusion to draw.

[Carotio]

Well, I'm happy that I still can settle with just a bike and public transportation. My 2 bikes just need a cupfull of oil per year for the chains.

But seriously, to the main theme: not only the oil companies are greedy. Half of the prize in Denmark goes directly to the tax system. But at least that money comes back to all citizens in some way or another.

Regarding the daily prizes, it's a question of supply and demand. I fully understand that people need their cars in order to go to work, when they live in an area, which are far away from work and/or bad connected with public transportation. And maybe they cannot use car pooling (? - sharing of car) with friends working in same area as yourself.
However, it never stops to amaze me that some people use their car in order to drive to their local store to buy a packet of cigarettes or similar small amounts of groceries in a neighborhood store instead of using the bike or just by walk, thus having some exercise at the same time. It's resource waste and unnecessary pollution :down:

[Aniuk]

[quote=McBeck]
Compartively we have very little of that. So, thinking that europeans dont commute like we do, is a very natural and easy conclusion to draw.

Strangely enough we are getting in to a discussion about commuting and a European - USA debate. But are we not forgetting the original point: fuel prices going up and there is no logical relation between the price consumers pay and the production costs. A lot of money goes to taxes and/or the oil companies. (In a different ratio per country and of course prices are not going up in a election year, by coincidence of course) And although I personally can cope very well I think Ducimus made a very short statement

quote: If fuel prices were going up to maintain the status quo on profit margins, i can understand that. HOWEVER, in this day and age when prices are going up, and they keep announcing record breaking profits, thats f'ing bullschitt, and the smell is coming from big oil.

Its Common sense, record making profits means overpriced product, because its obviously not costing you alot to produce that product!

They (big oil) also have the politicians in their pockets, so nothing will be done about it. unquote

And perhaps I commute in a total different way and do not feel the same problems with high prices. I agree: there is something fishy going on and as a consummer no way I will ever get to know what is really going on. The only thing I know: there is not much I can do about it. Even the so called "white gasstations" in the Netherlands that sell no brand gas and are a little bit cheaper make a lot of money and are one way or the other owned by the large companies. There is no charity in the oil business and the stakes are high, so are the prices all over the world.

[Fish]

Deleted.
Saw Aniuk's post to late.

[Tchocky]

http://www.theage.com.au/news/world/bfaithb-us-prayer-at-the-pump-group-seeks-help-to-lower-fuel-prices/2008/05/12/1210444326609.html


:o


:o


:o

[bradclark1]

http://www.theage.com.au/news/world/bfaithb-us-prayer-at-the-pump-group-seeks-help-to-lower-fuel-prices/2008/05/12/1210444326609.html

Hey! If it works..............................

[Platapus]

Let me take a stab at this

But are we not forgetting the original point: fuel prices going up and there is no logical relation between the price consumers pay and the production costs....

In business there is no requirement for any relationship between what the consumers pay and the production costs as long as the selling price is larger than the production costs. If I have something that costs me $1.00 to make, I can sell it for $100,000 if that is what the market can bear. In capitalism there is no such thing as "too much profit". There is nothing in business methodology that requires any limitation on selling price based on production price.

, in this day and age when prices are going up, and they keep announcing record breaking profits, thats f'ing bullschitt, and the smell is coming from big oil.

That smell is called success. Successful businesses make profits. Very successful businesses make huge profits. Any oil executive that is not motivated for larger and larger profits would be fired by the stockholders and for good reason.

Common sense, record making profits means overpriced product, because its obviously not costing you alot to produce that product!

Not common sense but emotions. It sucks paying more profit to some company!!!

Oil companies (and pretty much every other company) are not non-profit organizations nor are they providing a public service for the betterment of the citizens. The oil companies only reason for existence is to make profit. As long as they are not breaking any laws or anti-trust regulations, they can make as much profit as the market can bear.

It is unfortunate that for the past 100 years we have chosen to become dependent on one single product for our energy needs -- oil. In a capitalistic society, which American has also chosen to abide by, one can not blame a company from taking advantage of our self dependance.

It is a businessman's dream -- a product where your customers are so used to it that they simply have to buy more. This is money in the bank.

Now it sure would be swell if the oil companies would be nice, considerate, and caring about the people who want the oil but don't want to pay high prices. Unfortunately nice, considerate, and caring are not successful business models when you have a product where the demand is higher than the supply.

For every regular joe who can't afford to buy oil products there are plenty of industries/corporations/countries waiting in line to pick up any surplus. No oil will be going unsold.

I think the oil companies are charging too much for oil.

But as a capitalistic consumer, I think that all merchants charge me too much.

The market is defined by the conflict of two dichotomous desires

The customer wants to buy the product at the lowest price.
The provider wants to sell the product at the highest price.

Perhaps the solution is to find another product we can buy instead of oil for our energy needs? This will take a long long time I am afraid. For 100 years we have never seriously considered any other energy source but oil. We are now paying for that laziness.

"The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings."
Julius Caesar (act I scene II)

[Brag]

Don't you think the Iraq dingie wingie goody two shoes nice Bushie-hoochie plays a role?

[bradclark1]

If I have something that costs me $1.00 to make, I can sell it for $100,000 Yes you can. Today you can sell it for $15.00 a gallon and it will still sell because we move on oil. Thats why pricing is a matter of national security and why the oil companies shouldn't be allowed to artificially inflate prices. If something stopped the flow of oil to the U.S. and prices rose because of it the government would get involved and remove the problem. We have 12% more oil available this year then last yet the inflation has skyrocketed way past last years rate. Thats profiteering.

Profiteer: One who makes what is considered an unreasonable profit especially on the sale of essential goods.
Some types of profiteering are illegal, such as price fixing.

Perhaps the solution is to find another product we can buy instead of oil for our energy needs?

And in the meantime pricing should be regulated.

[Tchocky]

In any meaningful analysis, the result is that Americans have been paying too little for their oil.
Environmentally, it doesn;t make sense.
For infrastructure in the US, it doesn;t make sense.
For preparing to cope with a post-oil landscape, it doesn't make sense

[August]

In any meaningful analysis, the result is that Americans have been paying too little for their oil.

Take taxes out of the equation and we're paying as much as you Europeans.

[Tchocky]

In any meaningful analysis, the result is that Americans have been paying too little for their oil.
Take taxes out of the equation and we're paying as much as you Europeans.
Most likely, yeah.

[August]

In any meaningful analysis, the result is that Americans have been paying too little for their oil.
Take taxes out of the equation and we're paying as much as you Europeans. Most likely, yeah.

So did i miss the point?

[bradclark1]

In any meaningful analysis, the result is that Americans have been paying too little for their oil.
Environmentally, it doesn;t make sense.
For infrastructure in the US, it doesn;t make sense.
For preparing to cope with a post-oil landscape, it doesn't make sense
What August said about taxes.
As far as Environment and Infrastructure until there is a way to shrink the U.S. to move everything closer together there will be no change. The U.S. is too wide open still and mass transit is a joke because what mass transit we have all runs at an operational loss. The states oversees buses and the feds oversees passenger trains. You couldn't get a public sector company to run either without jacking prices way up which in the end would drive people away from it's use so nothing would be accomplished.
A post oil landscape is a century or more away. The rush should be just to get away from the reliance on oil. Oil companies aren't going to bother doing squat because they have a cash cow in the here and now and there is no incentive for them to change. Getty pushed oil (kerosene) as an cheaper alternative to whale oil. Some whiz just needs to get on the stick for an alternative to oil so they could be wealthier than their wildest dreams. The only never ending alternative is nuclear power and electrical cells. There is no other realistic long term alternative resource out there without causing some other dependency crisis. Bio-fuel just isn't realistic. Hydrogens realistic main supply would be water so thats not a good long term alternative either. The only doable option is some form of high capacity electrical cells.

[Tchocky]

Certainly valid arguments about the size of the country, that's not going to change. But there are ways to get around it. I know France isn't the size of the US, but a proper high-speed rail network could cut an awful lot of those journeys out.
http://krugman.blogs.nytimes.com/2008/05/10/the-eh-team/

Decent urban public transport in cities as well. Didn't the car companies buy up the streetcar companies and push everyone onto buses, then shut down the buses to get people into cars? That's an absurdly generalised narrative, but i vaguely remember hearing something like it. Ah well, could be wrong.

But I think that on a cultural, human-geographical level, cheap oil has changed America. The urban landscape is centred around the car, there are even sidewalk-less cities. And let's not get onto cycling :)

August, you didn't miss the point at all, really.

[bradclark1]

I know France isn't the size of the US, but a proper high-speed rail network could cut an awful lot of those journeys out.

We have high speed trains. The problem though is that most of our rail infrastructure is in such a state of disrepair there isn't much high in it's speed.
It doesn't help much that congress keeps lowering the budget so the only money they have is for essentials.

[Tchocky]

There's the Acela (I think). I was thinking more along the lines of the TGV/ICE, or the new Spanish Madrid-Barcelona line.
Then again, there's no point in connecting cities by fast trains if you need a car to get around the city when you get there, so this all necessitates a big investment ion public transport. Which means either new taxes or higher existing taxes.

[bradclark1]

Well the Acela can do 150mph but our rail and bridge infrastructure is so bad it can only reach an average of something like 74mph. In my state there are more than a few parts that 20mph is the highest speed because of the condition of the tracks. The Acela also only runs between Washington DC and Boston. Also over the years the amount of rail lines have reduced and now in many parts of America the track usage is maxed out but nobody wants to build new lines and the freight business is going through a new boom. All in all everybody is aware of our rail problem but nobody and especially our government wants to pay for it's upgrades and repairs.

[Tchocky]

http://gas2.org/2008/05/13/california-building-220-mph-high-speed-train-from-san-francisco-to-la/

Good news :)

[bradclark1]

http://gas2.org/2008/05/13/california-building-220-mph-high-speed-train-from-san-francisco-to-la/

Good news :)
In 22 years. Better late than never I guess.