Gas prices won't stay low for long...

[Augustus]

As the flooring businessman said yes everyone cut back on driving but that was AFTER the price of oil (and the price of gas) rose.

So you are saying all the billions in profits reported were made BEFORE the summer? I'm sorry, but that is absurd. Can you quote any sources for this claim? Record driving and consumption in the first three months of the year made the oil companies more profit then ever in their history? You don't see anything wrong with a 20 million dollar paycheck while the entire country is suffering massive layoffs and business districts are being turned into wastelands?

Are you on the oil companies payroll?

No I work with healthcare professionals. I have no loyalty to oil companies. I would love to buy a solar powered car when it comes out! I just also enjoy economics and finance.

As far as timeline goes, over the first 6 months of the year the oil companies were selling more gas than ever! Then as prices peaked in June and July people started cutting back and taking the bus and getting rid of their SUV's as I did, fewer miles were being driven and fewer gallons of gas were bought. World wide demand went down, the economic plunge happened and gas prices dropped. Oil companies will still make their profit because they will always sell about 10 cents more than what they buy it for.

I am not upset at $20 million profits. We are not communists. If one company is doing well they shouldn't have to be penalized.

The company I work for is also doing well though our total revenue isn't even $5 million, but since we turned a big profit last year, does that mean we need to write a fat check to the people down the street???

 

[Kail]

As the flooring businessman said yes everyone cut back on driving but that was AFTER the price of oil (and the price of gas) rose.

So you are saying all the billions in profits reported were made BEFORE the summer? I'm sorry, but that is absurd. Can you quote any sources for this claim? Record driving and consumption in the first three months of the year made the oil companies more profit then ever in their history? You don't see anything wrong with a 20 million dollar paycheck while the entire country is suffering massive layoffs and business districts are being turned into wastelands?

Are you on the oil companies payroll?

No I work with healthcare professionals. I have no loyalty to oil companies. I would love to buy a solar powered car when it comes out! I just also enjoy economics and finance.

As far as timeline goes, over the first 6 months of the year the oil companies were selling more gas than ever! Then as prices peaked in June and July people started cutting back and taking the bus and getting rid of their SUV's as I did, fewer miles were being driven and fewer gallons of gas were bought. World wide demand went down, the economic plunge happened and gas prices dropped. Oil companies will still make their profit because they will always sell about 10 cents more than what they buy it for.

I am not upset at $20 million profits. We are not communists. If one company is doing well they shouldn't have to be penalized.

The company I work for is also doing well though our total revenue isn't even $5 million, but since we turned a big profit last year, does that mean we need to write a fat check to the people down the street???

I believe you quoted 20 million as a paycheck for a single individual, not the company.

I'd very much like to see where you get your facts. I guarentee you, the gas companies are making more than 10 cents a gallon. Oil prices have dropped about 2/3 of what they were in the summer. Gas has dropped to about 1/2.

I stand by my statement that there is NO WAY the gas companies made RECORD profits for the year in the first 6 months of the year, given the last 6 months were maked by DRASTIC reductions in consumption.

 

[Augustus]

Oops yeah, not $20 million in profits, $20 million for one dude, that is totally fine with me. as it probably said in his contract that he gets x % of total profits.

Besides even if he gave all of that back to the people and you divided that $20 million into every gallon of gas bought in 2008, gas prices would not come down one cent.

Do a few internet searches and you will see that the profit of about 10 cents is pretty accurate.

Sure, gas prices dropped by have as oil prices dropped by two thirds, but the two are not equal in that way. Oil prices doubled to a peak of just $150 last year, and gas prices did not double (thankfully) At the start of 2008 they were around $3 a gallon and ended up about $4.20 where I was, so they went up but did not double.

 

[Shaw]

I just also enjoy economics and finance.

Then might I suggest that you spend a little more time actually researching that... it would be time that pays off both in better data and more personal enjoyment for yourself.

You are off on a number of things, like...

As far as timeline goes, over the first 6 months of the year the oil companies were selling more gas than ever!

Month over month, U.S. refiners delivered less gallons of gasoline in 2008 than in 2007. Month over month, U.S. refiners delivered less gallons of gasoline in 2007 than in 2006. In fact 2005/2006 marked about the peak of recent gasoline consumption in the U.S.

But as someone who is interested in economics and finance, you'll most likely find this interesting... it has been noted that one of the defining characteristics of the last 8 years has been stagnant growth of the average family's income. Most of us are basically making the same amount of money we were 8 years ago.

Back in 2004 the Bush campaign was telling all of us how bad a 50¢ per gallon gas tax would be for the average family... they estimated it was going to cost them an additional $600 per year (they actually provided a calculator on their site so you could figure it out according to your data, I came out at $640 per year).

Well, that 50¢ per gallon is the same for the consumer no matter if it is a tax or an increase in price. 50¢ per gallon cost us about $600 per year (or $50 per month).

Based on these figures, I was curious how much this cost (or saved) the average American driver during the last 8 years... starting with a base price of $1.50 per gallon.

2001
148.7 (-$1.30)
149.0 (-$1.00)
145.0 (-$5.00)
159.1 (+$9.10)
173.8 (+$23.80)
165.8 (+$15.80)
146.6 (-$3.40)
146.1 (-$3.90)
155.7 (+$5.70)
135.7 (-$14.30)
121.2 (-$28.80)
112.7 (-$37.30)
Total: savings of $40.60

2002
114.8 (-$35.20)
115.5 (-$34.50)
128.9 (-$21.10)
143.9 (-$6.10)
143.4 (-$6.60)
142.4 (-$7.60)
143.8 (-$6.20)
143.8 (-$6.20)
144.1 (-$5.90)
148.6 (-$1.40)
146.1 (-$3.90)
142.9 (-$7.10)
Total: savings of $141.80

2003
150.0 (-$0.00)
165.5 (+$15.50)
173.4 (+$23.40)
163.3 (+$13.30)
153.9 (+$3.90)
153.3 (+$3.30)
155.4 (+$5.40)
166.1 (+$16.60)
172.1 (+$22.10)
160.6 (+$10.60)
155.5 (+$5.50)
152.2 (+$2.20)
Total: additional cost of $121.80

2004
161.4 (+$11.40)
169.0 (+$19.00)
177.8 (+$27.80)
183.9 (+$33.90)
202.3 (+$52.30)
201.3 (+$51.30)
195.4 (+$45.40)
192.0 (+$42.00)
191.2 (+$41.20)
204.2 (+$54.20)
202.3 (+$53.30)
188.7 (+$38.70)
Total: additional cost of $470.50

2005
187.5 (+$37.50)
195.3 (+$45.30)
212.0 (+$62.00)
228.5 (+$78.50)
220.5 (+$70.50)
219.8 (+$69.80)
233.3 (+$83.30)
252.9 (+$102.90)
295.1 (+$145.10)
276.5 (+$126.50)
230.3 (+$80.30)
222.9 (+$72.90)
Total: additional cost of $974.60

2006
236.0 (+$86.00)
232.6 (+$82.60)
246.8 (+$96.80)
278.7 (+$128.70)
295.3 (+$145.30)
293.0 (+$143.00)
302.5 (+$152.50)
299.9 (+$149.90)
260.6 (+$110.60)
229.3 (+$79.30)
227.5 (+$77.50)
235.9 (+$85.90)
Total: additional cost of $1,338.10

2007
228.9 (+$78.90)
232.3 (+$82.30)
260.9 (+$110.90)
289.1 (+$139.10)
318.7 (+$168.70)
310.2 (+$160.20)
301.1 (+$150.10)
283.4 (+$133.40)
284.9 (+$134.90)
285.3 (+$135.30)
312.8 (+$162.80)
307.0 (+$157.00)
Total: additional cost of $1,613.60

2008
309.4 (+$159.40)
305.1 (+$155.10)
330.4 (+$180.40)
353.7 (+$203.70)
383.0 (+$233.00)
419.0 (+$269.00)
418.7 (+$268.70)
386.0 (+$236.00)
368.7 (+$218.70)
314.0 (+$164.00)
224.8 (+$74.80)
172.6 (+$22.60)
Total: additional cost of $2,185.40
​

I don't know about the rest of you guys, but that is a lot of money for most of the people I know (including myself). People who have been budgeting their same income would have a hard time absorbing those additional costs.

I am not upset at $20 million profits. We are not communists. If one company is doing well they shouldn't have to be penalized.

$20 million? Most of these companies were seeing quarterly increases of more than a billion dollars year over year.

Who said we were communists? Who even brought up the idea to your mind?

In the U.S. we aren't free range capitalists either. We have laws (both on consumer protection and antitrust activities) designed to keep capitalism within the bounds in which it benefits our country as a whole.

People sometimes forget why we need this type of regulation... the fact of the matter is, companies and corporations don't display good ethics, and they'll even do things (when left to their own devices) that will hurt themselves in the long run.

Oil companies know that the oil is running out, but rather than work on a transition plan (for both themselves and the country) they will keep doing what they are doing hoping it doesn't happen while they (the officers of those companies) are still there. This isn't unique to oil companies, most capitalist endeavors lack long term vision.

These companies are rolling in money right now... do you think that they are going to actually use it wisely?

Greed (the engine of capitalism) works best when kept on a short leash.

Economics and finance... you are right, it can be an enjoyable subject. Specially if you stop getting your data from other people's talking points. I suggest using the data from the Energy Information Administration in the future to avoid that trap.

 

[DontFeedPhil]

The actual price of gasoline had little to do with demand. It was because companies like AIG and Merril lynch and other companies of that kind where trading oil like a comodity. Alot of these companies wer just buying oil on paper having never even touched the oil. They were just investing and running up the price to make money at the cost of the consumer. Finally last summer talk in congress and the general public shone a spotlight on all these "financial" companies with their hand in the cookie jar and they all stopped doing it. Thats when gas and oil prices started to drop.
There was a segment on last weeks 60 minutes that explained it better than I can...

 

[Dar70]

^^^^^^Bingo. Well its a big reason increasing demand though is what prompted much of the investments.

Of course they are going to raise prices. Thei ploy of lowering them in order to help the Republicans in Nov didnt work so now they are going to start screwing us over. Hopefully Obama will drag them onto the carpet and make them explain themselves.

why havent they started increasing it yet than????PLEASE dont tell me they want to make Obama look bad, so they will wait until hes in office. Because if thats the case they would have lowered gas a year ago.


The fact is OIL has been on the rise since 2000. People freaked when it hit $1.20/gal in early 2000. Here in Michigan we paid over $2 in 2000. Gas has fluctuated between about $1.40-4.00 for 9 years now. Its not any presidents fault. To even suggest it is juvenile.

 

[CYOTI]

The actual price of gasoline had little to do with demand. It was because companies like AIG and Merril lynch and other companies of that kind where trading oil like a comodity.

Absolutely ridiculous. In order to influence the domestic US market, you'd have to have the financial resources to impact the global market. It's beyond them since they lack the resources of a mid size global power.

But irrationally scapegoating the big bad corporations always seem to be a popular amusement in dire times.

 

[Shaw]

Its not any presidents fault. To even suggest it is juvenile.

I agree.

George W. Bush (June 23, 2000):

"There seems to be an effort out of Washington to blame me for rising energy prices. And the American people don't buy that. It's the -- Clinton-Gore administration's been there for seven years, we're more dependent now than ever before on energy from foreign sources. And I am amazed that they're trying to shift the blame away from the people that are holding the office. And I resent that kind of politics, and so will the American people..."

"No, it doesn't. I think we ought to make sure that we become less dependent on foreign sources of crude oil. I'll have an energy policy. But I received a lot more support from people who drive cars, that rely upon -- who want to see the price of gasoline down."

"And this is typical of an administration that refuses to accept responsibility. This is amazing. They've been in office for seven years, the price of gasoline has gone up during their period of time."​

 

[Augustus]

Shaw

I corrected myself in a later post I meant to say $20 billion and not $20 in regards to profits...

As the to first part of your post that is rather interesting that less gas has been delivered over the years to Americans.

But in dealing with supply and demand in a global market, one has to remember that the price of an item is affected by the worldwide demand.

Perhaps I was not clear in my earlier posts, yes some markets were perhaps already purchasing less gas. But China and India were not until recently. Other emerging markets were also increasing their demand.

As someone else pointed out, speculators also played their part in driving up the cost of oil.

I still have no problem with people making millions of dollars.
The reason I brought the communist thing up is the other posters were suggesting that someone else being wealthy is a horrible thing.

It is not, not in any way...

 

[Kail]

Shaw

I still have no problem with people making millions of dollars.
The reason I brought the communist thing up is the other posters were suggesting that someone else being wealthy is a horrible thing.

It is not, not in any way...

But EXPLOITATION is.
ex·ploi·ta·tion: Utilization of another person or group for selfish purposes:

 

[Augustus]

If their profits are based on 10 cents a gallon, I would not call that exploitation. If it cost them $1.50 to make and they sold it to us for $4, then maybe...

 

[Kail]

If their profits are based on 10 cents a gallon, I would not call that exploitation. If it cost them $1.50 to make and they sold it to us for $4, then maybe...

Again, please show me where you get this .10 a gallon figure, because I don't believe it.

 

[DontFeedPhil]

The actual price of gasoline had little to do with demand. It was because companies like AIG and Merril lynch and other companies of that kind where trading oil like a comodity.

Absolutely ridiculous. In order to influence the domestic US market, you'd have to have the financial resources to impact the global market. It's beyond them since they lack the resources of a mid size global power.

But irrationally scapegoating the big bad corporations always seem to be a popular amusement in dire times.

No, its far from ridiculous. Its FACT. I might have mentioned the wrong names. I dont remember the exact names of the actual companies they mentioned but the fact is they were investing billions and billions of dollars to buy this oil and just resell at a higher price. Thats why if you go looking into why the last 2 years or so our demand actually decreased about 5% but oil prices shot up at a totally unproportional rate. Im not makeing this up. Maybe someone can find the segment Im talking about on 60 minutes on 1/11/2009. Cause Im just trying to remember the names they mentioned and Im sure I didnt geet the actual names right. But they were similar companies.


Here read this there are 4 pages so read them all...
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

And it appears the names I was looking for were, Goldman Sachs and Morgan Stanley and Barclays

 

[Augustus]

Wow, I am tired from all this reading, but here are a number of articles. Some would seem to contradict others as some say that oil companies make about 10 cents on the dollar rather than 10 cents per gallon.

That would change their profits on $3 gas to 30 cents rather than 10 cents, but I am still comfortable with that figure since it is still less than the collective government taxes on gas and a 10% profit still isn't price gouging..
http://www.newsbusters.org/node/5120

http://arclightzero.wordpress.com/2007/05/07/debunking-oil-profits-and-gas-station-boycott-myths/

http://aapolitics.us/article/2008/0...llon-gas-answer-federal-and-state-governments

Here is an article from last april that just muddies up the whole issue:
http://www.factcheck.org/askfactcheck/does_the_government_really_make_more_in.html

This one breaks down the price of oil: http://www.npr.org/templates/story/story.php?storyId=5367096

http://jb-williams.com/4-25-06.htm

http://media.www.spectatornews.com/...tailers.Face.Low.Profit.Margins-3352249.shtml
And found this one, while it has nothing to do with what we are talking about, I still find it interesting.
http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion

 

[CYOTI]

Thats why if you go looking into why the last 2 years or so our demand actually decreased about 5% but oil prices shot up at a totally unproportional rate.

Because GLOBAL DEMAND went up and the prices on the domestic oil markets here are tied into that global market. When you have foreign governments subsidizing the energy consumption of their people with artificially low price gas then it's going to raise the price of fuel.

 

[DontFeedPhil]

^^^Thats what they want you to think. The prices have been manipulated by the companies mentioned in the 60 minutes article. So if we are to beleive you then global demand must have sharply fallen off in the last 6 month to 1 year. And we know that didnt happen. Oh china is suddenly only consuming 1/2 the oil...Russia too? And the USA must have curbed its oli consumption by at least 1/2 too...
Nope that didnt happen. The fact is that prices were driven up by these investment companies playing middle men. And now that they have largly stopped doing this the prices have dropped to a more realistic level. That, and they have mostly gone bankrupt and they cant keep up their ponzy schemes...

 

[Augustus]

^^^Thats what they want you to think. The prices have been manipulated by the companies mentioned in the 60 minutes article. So if we are to beleive you then global demand must have sharply fallen off in the last 6 month to 1 year. And we know that didnt happen. Oh china is suddenly only consuming 1/2 the oil...Russia too? And the USA must have curbed its oli consumption by at least 1/2 too...
Nope that didnt happen. The fact is that prices were driven up by these investment companies playing middle men. And now that they have largly stopped doing this the prices have dropped to a more realistic level. That, and they have mostly gone bankrupt and they cant keep up their ponzy schemes...

Why would it have to fall by half? Because gas is half the price?

Sorry but those are not related in that manner.

 

[DontFeedPhil]

My head hurts...
Why?
Cause I keep banging it against this brick wall.

 

[tomalak301]

Oils going down but Gas is rising. I guess it was inevitable, but it sucks like hell.

 

[CYOTI]

So if we are to beleive you then global demand must have sharply fallen off in the last 6 month to 1 year. And we know that didnt happen. .

Global demand did fall thanks to the economic down turn.