Price of gas goes up...So do Profits!

[Eckolaker]

Definately a good article for the forum.

I know we all can appreciate this one...

http://money.cnn.com/2006/04/26/news/economy/oil_profits/index.htm?cnn=yes

[Highrever]

meh, gasouts, public transportation, all that garbage will never work as longed as we're obsessed with our cars, not just car nuts, but America in general, we'll bitch, but we'll pay. It's always funny how every summer theres some excuse for gouging gas prices "Oh, there was a fire at xxx refinery" Johnsons cat accidently walked across his keyboard when he wasn't looking and set the prices wacky"


We'll look into it, they say, I can assure you it will hit 4 bucks this summer, and we'll still pay.

[silvery_eagle]

their profit might be lower per barrel but then the volume kicks up the overall profit...
that's crazy to see from 2002 -> around $30 per barrel jumps to 70+ at 2006 now

[gen4k20a2]

Bush is starting to move his ass on this so hopefully well see some stuff happening

[Eckolaker]

Bush is starting to move his ass on this so hopefully well see some stuff happening


If his previous track record is anything to show on how he'll handle this issue...well lets just say Im not going to hold my breath on it.

[x[corwyn]]

Hopefully the goverment and people in general realize that America is far more dependant on gas being available. Our land mass is too large, the areas to move stuff to are too far to utilize without vehicles. Our economy is based on the fact that gas is cheap and available to use to get around, and for transportation. Prices for all items will go up, and drastically with the advent of more expensive gas. People will then buy less. our commerce driven society will spend less, however with costs catching up to gas prices they will continue to go up and we will have spiraling inflation. Energy prices will dictate our economy more so than the feds interest rates. If this continues things could get ugly.

[Terry S]

And here's an alternate article to the gas price issue:

*****

http://www.ocregister.com/ocregister/opinion/homepage/article_1117840.php

Big Oil benefits, not causes high prices
High worldwide demand, political uncertainty and other factors should be blamed

If only automobiles could run on hot air from politicians bloviating about high gasoline prices. Then we might have something.

President Bush is the latest to jump on a bandwagon overcrowded with the likes of Chuck Schumer, Nancy Pelosi, Bill Frist, Dennis Hastert, Arlen Specter, Dianne Feinstein and Arnold Schwarzenegger, announcing a probe into possible "price gouging" by oil companies and ordering a temporary halt to deposits in the Strategic Petroleum Reserve.

Ah, the oil companies, favored punching bag of every politician who knows he can't do anything concrete to reduce gasoline prices – except, perhaps, to undo previous actions – and looking for a cheap headline. On sheer volume, oil companies make high profits when oil prices are high, so it's easy to attack them. And they make some questionable management decisions, such as the Exxon board did when it showered its outgoing chairman Lee Raymond with one of the most generous retirement packages in history, worth nearly $400 million, thanking him for making ExxonMobil the largest oil company in the world.

Oil companies would no doubt love to dictate and manipulate the prices of oil and gasoline if they could. But none has the market power to do so. The current price of oil, at something more than $70 a barrel, up about 20 percent since January, is the result of high demand due to a number of factors, including conversion to ethanol from MTBE, as well as economic growth, mainly in the United States and China, along with political uncertainty in oil-producing countries like Venezuela, Iraq and Iran. Oil companies benefit from these high prices, but the prices are determined by supply and demand.

A study by Cato Institute scholars Jerry Taylor and Peter Van Doren compared profit margins in the oil and gas industry to other industry sectors. The oil industry has been slightly less profitable than the rest of the economy since 1970, though it has had fat years and lean years.

If Congress were serious about reducing gasoline prices, it would start by repealing the energy bill it passed last year, especially the ethanol mandate. Ethanol is difficult to store and ship outside the Midwest, and corn farmers cannot yet supply the amounts mandated. So the price has risen from $1.45 a gallon to $2.77. That (along with other environmental regulations) increases refining costs, driving up gasoline prices.

Environmental regulations also require 17 different "boutique" fuels for different areas of the country. Simplifying or suspending these rules would make it easier to move fuel around to handle regional shortages.

People and companies are already responding to the price signals with voluntary conservation or switching to higher mileage cars or investigating promising new technology or fuels, and ultimately, the biggest progress toward new energy sources and usage will come from these marketplace decisions.

Political interventions in the marketplace almost always increase costs and prices rather than reduce them. Any politician serious about alleviating the pressure caused by high gas prices would do well to start repealing laws and regulations rather than adding new ones.

*****

Terry S

[Terry S]

]
Hopefully the goverment and people in general realize that America is far more dependant on gas being available. Our land mass is too large, the areas to move stuff to are too far to utilize without vehicles. Our economy is based on the fact that gas is cheap and available to use to get around, and for transportation. Prices for all items will go up, and drastically with the advent of more expensive gas. People will then buy less. our commerce driven society will spend less, however with costs catching up to gas prices they will continue to go up and we will have spiraling inflation. Energy prices will dictate our economy more so than the feds interest rates. If this continues things could get ugly.


The price of paper just went up drastically. Every paper company just raised their prices because of "gas prices & other economic influences".

Terry S

[silvery_eagle]

80% of our distributing cost went up drastically....
only sad thing is that our salary doesn't go up lol

[x[corwyn]]

Right now I would agree about some intervention though. Repealing some laws would do well, especially the ideas of removal of "boutique gas". Ever since the advent of "unleaded" gas, we have been getting crappier and crappier fuel for our vehicles. the removal of MTBE would also be a benefit as that might be good for the air, the water and soil gets contaminated and most water treatment places cannot handle MTBE *without a major overhaul. We have removed 95% of pollution from cars these days, and the 5% leftover is a bit much to ask IMHO. Also if the oil companies can be able to work within their environment without harming it, its time to open more refineries.

Now over to when I think governments should intervene... Fuel is just as important as food, water, or any other basic commodity. Without it we cannot survive as we do now. if the price continues as it is we will take a step back 100 years or so as far as transportation, and delivery services. Also prices of items are and will go up. With that in mind, this is not a normal commodity that we can really do without. With that in mind this would be the type of situation that we DO have a government for. It is troubling to see that while we not only have to pay at the pump far more, we have issues such as truckers having plenty of work to do that are simply turning to other jobs because it is no longer feasible for them to bring our commodities over. The repercussions will be felt across all the people of this nation. A disaster of this magnitude is only magnified upon the record profits oil companies are now seeing, which IMHO is distasteful at best.

the reason why government has to step in is because sompanies sometimes do not know where *the line is, and have to be pushed back over it. If companies were capable of more ethical behavior, and the capitalist creed was also cushioned by a creed of morals and ethics we might not need intervention. However, the "greed is good" philosphy is only good for the ones that get to capitalize on it. Ma Bell got bitchslapped in the 70s which has now given us the competition and tools that formed the cheap and plentiful services we have today. I think a small coalition of oil companies is very bad. Perhaps another function of capitalism, competition, needs to be put into play somehow. Everytime that has been exercised it has been a win for the people.

I have a bit more to say, but Im at work, and it has taken me an hour to type this as is between all my stuff...

[x[corwyn]]

80% of our distributing cost went up drastically....
only sad thing is that our salary doesn't go up lol



If this continues all summer everyone is going to be feeling the pain...and it will not be good. Especially here in california, and in New York.

[chrisalishuss]

i think the price of gas is supposed to hit $4 per gallon in june

[Terry S]

]


80% of our distributing cost went up drastically....
only sad thing is that our salary doesn't go up lol



If this continues all summer everyone is going to be feeling the pain...and it will not be good. Especially here in california, and in New York.


Thats why you work as hard as you can to make more money each year... or at least I do.

Terry S

[Macky]

by the time it hits five per gallon, its race gas for me. the station down where i live sells 100 octane unleaded for about 4.95/gallon

[Terry S]

by the time it hits five per gallon, its race gas for me. the station down where i live sells 100 octane unleaded for about 4.95/gallon


Race gas prices will go up by that time.. They are always around 6 months behind the normal gas prices.

Terry S

[x[corwyn]]

by the time it hits five per gallon, its race gas for me. the station down where i live sells 100 octane unleaded for about 4.95/gallon


It's $5.49 now at Garfield and Beach for 100 octane. I put in 4 gallons the other day. Figured if I have a gaping asshole after paying for gas, might as well go for the gusto.

[x[corwyn]]

]


80% of our distributing cost went up drastically....
only sad thing is that our salary doesn't go up lol



If this continues all summer everyone is going to be feeling the pain...and it will not be good. Especially here in california, and in New York.


Thats why you work as hard as you can to make more money each year... or at least I do.

Terry S


Thats how inflation works though until the price of gas or our supply issue is resolved. The price of gas has been going up at a drastic rate now, and I don't know about you, but employers are starting to leave California, with the costs being so high here. Gas goes up, you are going to see this already business unfriendly area suddenly devoid of a job market.

Hmmm I guess my overall point is...Gas is the basis for everything. It goes up, prices of EVERYTHING goes up. Wages NEVER go up as fast as inflationary costs. I did a cost/living check the other day, and it wasn't all that much better than 6 years ago when I was making about $20k less. Not to mention I don't know of one person that has gotten more than a 4% raise since about 2000 without having to job switch or company switch. These aren't good times right now, and they are gonna get worse...

[Terry S]

]



]


80% of our distributing cost went up drastically....
only sad thing is that our salary doesn't go up lol



If this continues all summer everyone is going to be feeling the pain...and it will not be good. Especially here in california, and in New York.


Thats why you work as hard as you can to make more money each year... or at least I do.

Terry S


Thats how inflation works though until the price of gas or our supply issue is resolved. The price of gas has been going up at a drastic rate now, and I don't know about you, but employers are starting to leave California, with the costs being so high here. Gas goes up, you are going to see this already business unfriendly area suddenly devoid of a job market.

Hmmm I guess my overall point is...Gas is the basis for everything. It goes up, prices of EVERYTHING goes up. Wages NEVER go up as fast as inflationary costs. I did a cost/living check the other day, and it wasn't all that much better than 6 years ago when I was making about $20k less. Not to mention I don't know of one person that has gotten more than a 4% raise since about 2000 without having to job switch or company switch. These aren't good times right now, and they are gonna get worse...


Thats why you job switch/company switch when the raises aren't reasonable anymore.

Terry S

[Miss Evo8]

by the time it hits five per gallon, its race gas for me. the station down where i live sells 100 octane unleaded for about 4.95/gallon


what streets? There's one by my house in Fullerton but its 5.95 a gallon :tickedoff:

[GokuSSJ4]

by the time it hits five per gallon, its race gas for me. the station down where i live sells 100 octane unleaded for about 4.95/gallon


what streets? There's one by my house in Fullerton but its 5.95 a gallon :tickedoff:

it will eventually go up near 6.99 and 7.99 , it just a matter of time

[nj1266]

I love the OC Register and I love their anti-Iraq War stand. They took a very courageous stand, but they really do not seem to understand how markets work.

The principle of supply and demand works when you have COMPETITION. Competition means that there should exist a large number of suppliers of a certain good and a large number of consumers of that good. When that happens, then prices will drop and effeciency would reign.

In the case of oil this simply does not exist. There are just a handful of oil companies in the market and the direct producers are organized in a cartel. There is little to no competition for the laws of supply and demand to work. Exxon Mobile and Conoco Phillips bythemselves can determine and skew prices. The oil market is an oligopoly and that has a terrible impact on the price of oil.

OCR should go back and read the original work of Adam Smith and David Ricardo to understand market theory better.