Explain why oil companies are loosing money?

[Benzadmiral]

Originally Posted By: NHHEMI
I don't believe they are as bad off as they claim. They are still making money just not hand over fist at record amounts as they were. My heart bleeds for them - NOT!

As an ex-wife of mine used to say in other contexts, "My heart pumps purple peanut butter for [the oil companies]."

 

[Astro14]

Originally Posted By: grampi
Originally Posted By: DoubleWasp
Keep in mind that we shot down one of their civilian airliners because we thought it was an F-14.


When has the U.S. ever shot down a civilian airliner?


Sadly, once. In 1988. The USS Vincennes, an Aegis cruiser, mis-identified an Iranian airliner as an F-14 on an attack profile out of Bandar Abbas, a nearby airfield where F-14s were based. The reasons are complex, involving human error, exchange of fire between surface units, data availability, and systems engineering, but the mistake was made. It was an accident.

The US paid reparations to the families of the victims.

 

[Brasileno]

Originally Posted By: grampi
Originally Posted By: Al
Originally Posted By: grampi

You're darn right they will, and why? Because the industry controls prices by controlling supplies...

Put your money where your mouth is..buy http://etfdb.com/etf/USO/, and http://etfdb.com/etf/UGA/


I will ask you one question; why are prices so low right now?


Because there is an extremely large amount of oil on the market, and cutting production has not had the effects it had in 2011 when we were in pain at the pump, with $4.2x and $4.3x gas, etc.

We have seen too high.. This price feels right.

 

[Al]

Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future

 

[grampi]

Originally Posted By: Al
Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future


Thank you for proving what I've been saying...the industry controls prices by controlling supplies...flood the market with supply, prices drop, tighten up supplies and prices soar...

 

[hatt]

Originally Posted By: Al
Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
The Saudi's are making sure to nix any further US production expansion and contract the current production.

 

[grampi]

Originally Posted By: hatt
Originally Posted By: Al
Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
The Saudi's are making sure to nix any further US production expansion and contract the current production.


That may be what they're trying to do, but OPEC just isn't that big of a player anymore to where they can control the markets...they may be able to temporarily cause some hardship to U.S. producers, but as soon as levels go back to normal, U.S. producers will just start right back up again...

 

[Jetronic]

can foreign companies buy US oil wells or fields? I'd invest in buying up US bankrupted oil fields, that would be a very good investment as they're worth little when oil prices are low and they can't be used to compete with me (if I was an opec country)

 

[Jetronic]

Originally Posted By: dishdude
Originally Posted By: Mr Nice
Maybe our bozo government can also sell them discount F-18 Super Hornets, F-16 Falcons, F-15E Eagles, Apache helicopters, our latest electronic warfare and radar jamming technology since they are now our 'friends'

Bozo must have really been happy to see our sailors at gunpoint by our so called new friends in the region....

What ribbon does the military give you when held at gunpoint by allies ?

Everything just sunshine and roses.... The most powerful Navy in the world made to look like security guards at local Walmart.

You do realize we entered their water with heavily armed ships? What do you think would've happened if another country came off the coast of Florida with the same type of equipment?


look what happened to the russian plane over turkish airspace for 17 seconds... alledgedly, as it did fall on syrian ground, and that's not disputed. The russians sure didn't attack or spy in Turkey, what were the Navy doing in Iranian waters?

 

[Astro14]

It's not yet clear that the US Navy WAS IN Iranian waters.

That's the Iranian claim.

They're not known for telling the truth...

The US Navy isn't saying one way or the other. I would encourage you to reserve judgement until the facts are in.

Further, these were small boats, armed with a .50 cal, they weren't intended to be able to defend themselves against Iranian warships, so the sailors didn't have a lot of choice when pressed by Iran...

 

[HTSS_TR]

Originally Posted By: grampi
Originally Posted By: Al
Originally Posted By: grampi
I will ask you one question; why are prices so low right now?
Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
Thank you for proving what I've been saying...the industry controls prices by controlling supplies...flood the market with supply, prices drop, tighten up supplies and prices soar...

I have several questions for you:

Who are oil industry ? Oil companies and/or oil producing countries ?

If the oil industry can control supply why didn't they do it the last year or so ? Why did they flush the oil market several millions barrels a day more than demand to bring down the price ?

If you can control supply why would you over producing to depress the price ?

The very basic of any commodity is price higher when supply is lower than demand and vice versa.

One example is price of chicken egg, we had bird flu few months ago and millions chicken had been slaughtered, it reduced egg supply by about 15-20% and price went from $1.xx a dozen to more than $3 a dozen(at least in CA).

Basically, price of almost anything reflects supply and demand. My point is oil industry is not capable in controlling supply. Nobody want to sell their products for less, they all want to get the most money possible.

 

[PandaBear]

The price can be high, but what kind of contracts did the oil companies made with the producing nations and customers (refinery)? They could've made contracts with even higher prices and lose their shirts.

 

[grampi]

Originally Posted By: HTSS_TR
Originally Posted By: grampi
Originally Posted By: Al
Originally Posted By: grampi
I will ask you one question; why are prices so low right now?
Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
Thank you for proving what I've been saying...the industry controls prices by controlling supplies...flood the market with supply, prices drop, tighten up supplies and prices soar...

I have several questions for you:

Who are oil industry ? Oil companies and/or oil producing countries ?

If the oil industry can control supply why didn't they do it the last year or so ? Why did they flush the oil market several millions barrels a day more than demand to bring down the price ?

If you can control supply why would you over producing to depress the price ?

The very basic of any commodity is price higher when supply is lower than demand and vice versa.

One example is price of chicken egg, we had bird flu few months ago and millions chicken had been slaughtered, it reduced egg supply by about 15-20% and price went from $1.xx a dozen to more than $3 a dozen(at least in CA).

Basically, price of almost anything reflects supply and demand. My point is oil industry is not capable in controlling supply. Nobody want to sell their products for less, they all want to get the most money possible.


The oil industry is any business connected with producing/supplying/selling/marketing crude oil products. I don't know how you can say the industry can't control supply. It's been mentioned several times just in this thread alone how OPEC has refused to roll back production because they're trying to break the backs of U.S. oil producers. If OPEC wasn't doing this, we would still have $100+ crude oil and $3.50+ gas prices. Why? Because that's where the industry wants prices; that's where they make their biggest profits. If the industry was okay with the profits with gas at $2, we would always see production as high as it is right now...to say the industry can't control supply is just flat wrong...they can and do control supply continuously...

 

[Joel_MD]

Originally Posted By: motor_oil_madman
Yeah gas stations make more per gallon when it's cheap compared to expensive. My guess is they can mark it up more. Plus when gas is cheap, so people drive more which means more stops to the gas station to buy stuff. They make more off of snacks in the store then they do off of gas.

Another factor that helps gas stations make more money when gas is cheap is the credit card transaction cost, which is calculated on a percentage of the sale. Let's say a station pays a 1.5% fee on every credit card sale. When gas is $2/gal the station will pay 3¢ for every gallon sold. When gas is $4 they will pay 6¢ and so on. These fees probably hurt the mom & pop stations more than the big companies, since the big companies are able to negotiate a lower fee percentage due to their volume.

 

[javacontour]

Let OPEC keep pumping. We'll keep our oil in the ground and buy all that others are willing to export cheaply.

Once they run out, or don't have enough to influence the market, they become practically irrelevant in the market.

Originally Posted By: hatt
Originally Posted By: Al
Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
The Saudi's are making sure to nix any further US production expansion and contract the current production.

 

[Brasileno]

Originally Posted By: javacontour
Let OPEC keep pumping. We'll keep our oil in the ground and buy all that others are willing to export cheaply.

Once they run out, or don't have enough to influence the market, they become practically irrelevant in the market.

Originally Posted By: hatt
Originally Posted By: Al
Originally Posted By: grampi

I will ask you one question; why are prices so low right now?

Saudi's have been over supplying markets to drive out competition and also to get more revenue. I think in the long run its going to hurt them bc oil prices are going to be depressed for the forseable future
The Saudi's are making sure to nix any further US production expansion and contract the current production.


A question: Have we had a positive or negative effect from "Drill baby drill?"

Gas IS very low right now.. Both my car gas gauges have been on F for months. So if anyone needed to travel to work, or has a business that transports, they should be at maximum benefit at these still-falling pump prices..

An honest question, I am trying to understand from the economy side. High gas prices hurt the economy.

 

[javacontour]

I'd say abnormal prices hurt the economy.

While it's temporarily good for consumers when fuel prices are low, we know that if profits are not there, suppliers will leave the marketplace, driving prices up.

While high prices are temporarily good for producers, if the value is not there for the consumer, they will leave the market, driving down demand.

Now, I do realize that demand is more inelastic in the downward direction for a commodity like fuel, but it's not totally inelastic. This means consumers can cut some usage and impact the demand side of the equation.

The economy is not one person or one monolithic business. The economy is a collection of entities trading.

Some are helped and some are hurt by price swings.

But unless the change is sustainable, it's going to be temporary. Too high or too low and someone leaves the market.

 

[Nate1979]

Originally Posted By: Joel_MD
Originally Posted By: motor_oil_madman
Yeah gas stations make more per gallon when it's cheap compared to expensive. My guess is they can mark it up more. Plus when gas is cheap, so people drive more which means more stops to the gas station to buy stuff. They make more off of snacks in the store then they do off of gas.

Another factor that helps gas stations make more money when gas is cheap is the credit card transaction cost, which is calculated on a percentage of the sale. Let's say a station pays a 1.5% fee on every credit card sale. When gas is $2/gal the station will pay 3¢ for every gallon sold. When gas is $4 they will pay 6¢ and so on. These fees probably hurt the mom & pop stations more than the big companies, since the big companies are able to negotiate a lower fee percentage due to their volume.


More and more stations around here are charging 10c fee to use credit card for gas.

 

[HTSS_TR]

Originally Posted By: grampi
The oil industry is any business connected with producing/supplying/selling/marketing crude oil products. I don't know how you can say the industry can't control supply. It's been mentioned several times just in this thread alone how OPEC has refused to roll back production because they're trying to break the backs of U.S. oil producers. If OPEC wasn't doing this, we would still have $100+ crude oil and $3.50+ gas prices. Why? Because that's where the industry wants prices; that's where they make their biggest profits. If the industry was okay with the profits with gas at $2, we would always see production as high as it is right now...to say the industry can't control supply is just flat wrong...they can and do control supply continuously...

These are clearly indicating that the oil industry could not control supply. One group, OPEC, wants to pump more oil to break US oil shale while other groups just pumping oil from the ground as normal. Clearly, the oil industry is not united as a group to control supply to keep price high.

Controlling supply is not producing more than demand, ideally if supply is just below demand by few percentage would be great for producers.

You need to rethink about "Controlling Supply"

 

[grampi]

Originally Posted By: HTSS_TR
Originally Posted By: grampi
The oil industry is any business connected with producing/supplying/selling/marketing crude oil products. I don't know how you can say the industry can't control supply. It's been mentioned several times just in this thread alone how OPEC has refused to roll back production because they're trying to break the backs of U.S. oil producers. If OPEC wasn't doing this, we would still have $100+ crude oil and $3.50+ gas prices. Why? Because that's where the industry wants prices; that's where they make their biggest profits. If the industry was okay with the profits with gas at $2, we would always see production as high as it is right now...to say the industry can't control supply is just flat wrong...they can and do control supply continuously...

These are clearly indicating that the oil industry could not control supply. One group, OPEC, wants to pump more oil to break US oil shale while other groups just pumping oil from the ground as normal. Clearly, the oil industry is not united as a group to control supply to keep price high.

Controlling supply is not producing more than demand, ideally if supply is just below demand by few percentage would be great for producers.

You need to rethink about "Controlling Supply"


I say it's a perfect example of controlling supply. OPEC wanted to flood the market and they have done just that...if that isn't controlling supply, then I don't know what is...