Are Oil Companies to blame for high fuel prices?

[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".

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.

[bradclark1]

Originally Posted by 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".

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.

[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]

Originally Posted by Catfish

...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

[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]

Originally Posted by 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.

[bradclark1]

Originally Posted by 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

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.