Oil at less than $48/barrel

[Win]

Originally Posted By: grampi
What I find so humorous about all of this is the people who adamantly defend the oil industry by saying they aren't price gouging when gas is $4+ and that prices are controlled by the market. This demonstrates that this notion clearly is not true.


I would say just the opposite.

Look at the enormous effect a few extra million bbl/day of North American supplied oil has made to the market, combined with reduced consumption, and it validates that supply and demand works, even for oil.

Want to make a cartel cry for momma? Find a new source of supply.

 

[dlundblad]

I have read several times how the highway trust fund is broke (I didn't realize it was called that.) It might be a regional thing, but here locally, the highway department is extremely wasteful. (The local highway department and the highway trust fun might be two different things? I don't know.) Its actually a joke. I assume they are union so the workers themselves have no incentive to even work hard/efficiently.

Regardless of what it is, money is apparently tight, but where do they get it?

 

[Pops1050]

Granted, I don't expect gas pricing to follow crude pricing minute by minute but when oil increases, we pay an increase at the pump the next day. Now that we are experiencing oil price decreases, the reduced pricing at the pump is at a snail's pace


This ^^^ IS a market reaction, everyone in the supply chain ie, producers, distributors, and retailers, hang on to price as long as possible. Competition naturally forces price downward. Also as you stated there are is complexity in the world oil market, many variables. At the distribution and retail level however it's pretty simple. You're always at the mercy of your supplier. You have to maintain a profit margin when your price for product increases and hold price when your costs decrease.

 

[grampi]

Originally Posted By: Win
Originally Posted By: grampi
What I find so humorous about all of this is the people who adamantly defend the oil industry by saying they aren't price gouging when gas is $4+ and that prices are controlled by the market. This demonstrates that this notion clearly is not true.


I would say just the opposite.

Look at the enormous effect a few extra million bbl/day of North American supplied oil has made to the market, combined with reduced consumption, and it validates that supply and demand works, even for oil.

Want to make a cartel cry for momma? Find a new source of supply.


How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...

 

[bvance554]

Originally Posted By: grampi
Originally Posted By: Win
Originally Posted By: grampi
What I find so humorous about all of this is the people who adamantly defend the oil industry by saying they aren't price gouging when gas is $4+ and that prices are controlled by the market. This demonstrates that this notion clearly is not true.


I would say just the opposite.

Look at the enormous effect a few extra million bbl/day of North American supplied oil has made to the market, combined with reduced consumption, and it validates that supply and demand works, even for oil.

Want to make a cartel cry for momma? Find a new source of supply.


How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...


How is what you explained happening? Becqause it makes no sense. Exxon doesn't control supply. Do you know how much oil companies make on average per gallon of gasoline? You'd be surprised.

 

[Cutehumor]

I bet the nissan leafers and toyota prius V are mad about this.

 

[Propflux01]

Originally Posted By: bvance554
Originally Posted By: grampi
Originally Posted By: Win
Originally Posted By: grampi
What I find so humorous about all of this is the people who adamantly defend the oil industry by saying they aren't price gouging when gas is $4+ and that prices are controlled by the market. This demonstrates that this notion clearly is not true.


I would say just the opposite.

Look at the enormous effect a few extra million bbl/day of North American supplied oil has made to the market, combined with reduced consumption, and it validates that supply and demand works, even for oil.

Want to make a cartel cry for momma? Find a new source of supply.


How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...


How is what you explained happening? Becqause it makes no sense. Exxon doesn't control supply. Do you know how much oil companies make on average per gallon of gasoline? You'd be surprised.


Easy... Exxon (oil companies) DO control the pricing. One way is by predicting futures, then when demand exceeds what the predicted usage amount are then fuel $$ go up. Keep your predicted usage underbid, and you can keep prices high. Oil has been in glut status for quite some time, and prices are just now coming down. Oil companies also set prices any which way they desire. It is a commodity, and treated as such.

 

[bvance554]

Originally Posted By: Propflux01

Easy... Exxon (oil companies) DO control the pricing. One way is by predicting futures, then when demand exceeds what the predicted usage amount are then fuel $$ go up. Keep your predicted usage underbid, and you can keep prices high. Oil has been in glut status for quite some time, and prices are just now coming down. Oil companies also set prices any which way they desire. It is a commodity, and treated as such.


ok, you're right. Big oil also killed the guy that invented the 100 mpg carburetor so they could keep consumption, and their profits high.

 

[HTSS_TR]

Originally Posted By: grampi
How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...

If that is the case then why there are more supply than demand as of the last several months ? If oil industry (Exxon-Mobil , Shell, Texaco-Chevron, BP ...) controls the supply side why don't they reduce it to keep crude oil at $100+ ?

All big oil companies can't do anything about curtailing supply, because countries with oil fields don't allow them much freedom in controlling everything.

 

[grampi]

Originally Posted By: HTSS_TR
Originally Posted By: grampi
How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...

If that is the case then why there are more supply than demand as of the last several months ? If oil industry (Exxon-Mobil , Shell, Texaco-Chevron, BP ...) controls the supply side why don't they reduce it to keep crude oil at $100+ ?

All big oil companies can't do anything about curtailing supply, because countries with oil fields don't allow them much freedom in controlling everything.


Are you living under a rock? Supply is higher than demand right now because OPEC is trying to bankrupt Russia, so they refuse to lower production...

 

[grampi]

Originally Posted By: bvance554
Originally Posted By: grampi
Originally Posted By: Win
Originally Posted By: grampi
What I find so humorous about all of this is the people who adamantly defend the oil industry by saying they aren't price gouging when gas is $4+ and that prices are controlled by the market. This demonstrates that this notion clearly is not true.


I would say just the opposite.

Look at the enormous effect a few extra million bbl/day of North American supplied oil has made to the market, combined with reduced consumption, and it validates that supply and demand works, even for oil.

Want to make a cartel cry for momma? Find a new source of supply.


How can you say the opposite when the very thing I described is happening right before our eyes? The industry controls prices by controlling supply...the only thing demand has to do with the equation is it tells the industry where to set production levels to maximize profits...it's always been that way and it will always be that way until something else comes along to replace fossil fuels, then THAT form of energy will be price controlled the same way...


How is what you explained happening? Becqause it makes no sense. Exxon doesn't control supply. Do you know how much oil companies make on average per gallon of gasoline? You'd be surprised.


It makes perfect sense. If it didn't, OPEC flooding the market with supply would have no effect on prices...

 

[SteveSRT8]

In addition to confusing folks this current pricing trend has also undermined the notion that the commodities markets controlled the pricing of oil. Note that the cartel is NOT increasing production, simply holding it steady. Combined with our production and much lower demand this means lower prices. I know it seems too simple for some of us.

Actually the whole thing is ridiculously controlled, but certainly NOT by so-called Big Oil. They are losing their arse over this, but their lobbyists will get another subsidy...

 

[whip]

Originally Posted By: Cutehumor
I bet the nissan leafers and toyota prius V are mad about this.

Why would they be mad? They're still spending less on gas too.

 

[whip]

Originally Posted By: grampi
Originally Posted By: supton
I'd hate to see taxes go up, but if fuel taxes are not paying for the roads... then I don't see a choice. Might as well add now, not later. [I'll add that I wish to see all of that increased money go to only the roads, but then again, since fuel taxes are not paying for the roads as it is, it's hardly a clause worth mentioning.]

I so want to replace my beater while prices are cheap on econoboxes. Do it now before it rebounds!


If the current fuel taxes aren't enough to cover the cost of road maintenance, then I think the first thing that needs to be done is to find why it isn't enough...it used to be enough, why isn't it now? Mismanaged revenues are not fixed by increasing taxes...

Mismanagement is a huge factor, but it's not the only issue. The cost of everything has gone up. Steel, concrete, asphalt, and labor cost are all on the rise. The increased cost of goods has affected my budget, I assume the same for the government. Compound that with more efficient vehicles, and there's less money going into the fund.

 

[CourierDriver]

I remember food prices were going up because of diesel,,ugh, now prices are down on diesel, but not food,,,u see, it is all a scam,just a scam. Jars or canned goods get smaller in volume and price goes up, like a 12 oz bag of chips is 2.50, come on, what is that, 3 potatoes ................

 

[grampi]

Originally Posted By: SteveSRT8
In addition to confusing folks this current pricing trend has also undermined the notion that the commodities markets controlled the pricing of oil. Note that the cartel is NOT increasing production, simply holding it steady. Combined with our production and much lower demand this means lower prices. I know it seems too simple for some of us.

Actually the whole thing is ridiculously controlled, but certainly NOT by so-called Big Oil. They are losing their arse over this, but their lobbyists will get another subsidy...


So you don't consider OPEC as "big oil"?

 

[SteveSRT8]

Originally Posted By: grampi
Originally Posted By: SteveSRT8
In addition to confusing folks this current pricing trend has also undermined the notion that the commodities markets controlled the pricing of oil. Note that the cartel is NOT increasing production, simply holding it steady. Combined with our production and much lower demand this means lower prices. I know it seems too simple for some of us.

Actually the whole thing is ridiculously controlled, but certainly NOT by so-called Big Oil. They are losing their arse over this, but their lobbyists will get another subsidy...


So you don't consider OPEC as "big oil"?


Not for long! Seriously though, I was referring to the American Oil Companies that we all know and love...

 

[Win]

Originally Posted By: grampi
....

Are you living under a rock? Supply is higher than demand right now because OPEC is trying to bankrupt Russia, so they refuse to lower production...


You can rest assured it's every man for himself in OPEC right now. If they're worried about anything, it's premium light, sweet, crude from enormous shale deposits in North America and elsewhere.

The infrastructure is in place. It has to be paid for. The oil will continue to pump from North America unless the politicians ruin it. Low bbl prices may restrict additional expansion in North America, or it may not.

 

[grampi]

Originally Posted By: SteveSRT8
Originally Posted By: grampi
Originally Posted By: SteveSRT8
In addition to confusing folks this current pricing trend has also undermined the notion that the commodities markets controlled the pricing of oil. Note that the cartel is NOT increasing production, simply holding it steady. Combined with our production and much lower demand this means lower prices. I know it seems too simple for some of us.

Actually the whole thing is ridiculously controlled, but certainly NOT by so-called Big Oil. They are losing their arse over this, but their lobbyists will get another subsidy...


So you don't consider OPEC as "big oil"?


Not for long! Seriously though, I was referring to the American Oil Companies that we all know and love...


Any company or country, whatever, that is an oil producer or refiner is all part of big oil...

 

[kschachn]

OPEC isn't flooding the market, the US is. OPEC is producing the same amount of oil as they ever have, we are the ones bringing a new supply into the market.

Originally Posted By: grampi
It makes perfect sense. If it didn't, OPEC flooding the market with supply would have no effect on prices...