Record oil profits

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That's ok. Nothing personal. Just chalk it up to learning about how the world works. Check more than what the talking heads tell you.

This gave you and perhaps others the chance to hone their critical thinking skills, if they choose. It gives folks a chance to see if their assumptions, if their ideas, and if the way they live their own life is consistent with what they expect from others.

No need to apologize. Just learn and grow and use this information for your benefit and the benefit of your family.

Originally Posted By: Jimmy9190
I have spoken out of turn here and I didn't have all the facts straight when I started this post. I aplogize for that and am sorry I brought it up.

That doesn't change the facts that concern the manipulation of the oil market and oil prices. One group says there's no shortage and everything is fine, others want to play with the prices and make money on oil they don't even have to take delivery on, others want to make money on the government/tax side of oil and gas prices, and still others point out how oil profits as a percentage are smaller than other industries.

I don't know who or what to believe. The whole thing is a can of political, financial and corruption/lobbyist-related worms. And this can of worms only opens from the inside.

I do believe things would be much different at the pumps if the speculators actually had to take delivery of the oil they buy and sell every day. And I do know there are a lot of forces impacting gas and oil prices.

Starting this post was an emotional and unprepared reaction to a couple of online articles I read this morning. The current situation with oil and gas prices makes me sick. I doubt any letter I wrote to any elected official would do any good. There is too much red tape and money to be made. Sorry I brought it up here again.
 
If that's the case, then he depends on those profits. No profits, no taxes. No taxes, no job with benefits for ZZman. So if profits go down, does that mean ZZman's paycheck goes down by that much?

ZZman, if you really work in government, then you have enough to fix in government before you can throw stones at any industry, save perhaps illegal drugs and human trafficking.

Governments are spending more than they take in. That's insane. Please get that fixed before complaining about industries that turn a profit.

Your job depends on those industries.
 
Next time I think the oil companies aren't making enough of a profit, I'll think of MSFT when I'm pumping $4+/gallon gas into my tank. LOL When I see stock prices tank because energy costs are hurting the economy I'll think of MSFT. Unfortunately I need oil, I can get by w/o MSFT. It might not be easy w/o MSFT, but trust me I need oil more than I need MSFT, or AAPL. I'm glad this time I'm getting a slice of the oil pie.

PS this post is not an attack on anyone, it's just maybe how I should consider thinking going forward.
smile.gif
 
People won't be happy until corporations get a return equal to what the government pays on bonds. They don't understand that the economy relies on the incentive for greater return to function at all.

Want more supply? Raise the profits and it will come. That's just common sense. Unfortunately we have both natural and artificial limits on how much oil we can pump in the US, and the timeline to change production is very long. And to be honest, at a 10% return oil still isn't a business I'd rush to get into.
 
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Originally Posted By: javacontour
ZZman,

Who put you in charge to decide how much profit is "appropriate" and how much is greed?

Profit is NEVER evil.

Now there are evil ways to get your profits. Cheating, lying, manipulation, and there are probably others. But the profit itself is not, nor can it ever be evil.

In what industry do you work? What are the typical profit margins in that industry? Is your industry greedy by the standard you've established that oil companies are greedy and computer companies are even more greedy? If your industry is greedy, what are you doing to change that? After all, if you complain about other industries, that must mean you have your industry all squared away and they are not greedy by your own standards.

Do you own investments? Did any of them do better than the 10% you claim is greedy. Make sure you consider your 401(k), IRA and pension funds you might own or be part of. If any of those earned more than 10%, what did you do to give away the greedy portion of those earnings?

Since you have this standard for oil companies, I just want to know if you practice what you preach.

I think the most peoples issue with record oil company profits, is not the amount of profit, its how it is created. Right from my local gas stations on up, it appears price fixing is the norm... Wild price fluctuations based on nothing that should affect the price of current volume of refined gasoline...

I doubt haliburton even reports all of its profits, afterall that's the number they are taxed on... This quarter their tax lawyers must've messed up!
 
Originally Posted By: IndyIan[/quote
I think the most peoples issue with record oil company profits, is not the amount of profit, its how it is created. Right from my local gas stations on up, it appears price fixing is the norm... Wild price fluctuations based on nothing that should affect the price of current volume of refined gasoline...

I doubt haliburton even reports all of its profits, afterall that's the number they are taxed on... This quarter their tax lawyers must've messed up!


Exactly...this is what I was thinking when I started this post. I just expressied it in the wrong way.
 
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it appears price fixing is the norm... Wild price fluctuations based on nothing that should affect the price of current volume of refined gasoline...

Why does the price ever go down if there is price fixing?
 
Prices are generally inelastic going down, but they do eventually go down if the market supports that.

But the price is not set by the oil companies. I've shared this before and I'll share it again. The only thing oil companies control is output.

Read any OPEC release. They announce production targets. They have economists that say if the OPEC nations produce X number of barrels of oil, they believe the price will be Y. Not even OPEC sets the price. The only thing they control is how much oil the member nations pump out of the ground and put on the market.

If they don't get their target price, either high or low, they adjust production. Price goes too high, they try to produce more. Price too low, they cut back on production.

Ditto for refineries. With prices this high, there will be the temptation for more refineries to produce unleaded gasoline. What happens when all of that fuel is on the market and there are too few buyers to buy it all? The price drops.

It takes a while. It took a year for it to rise $0.9x or so, so it's not going to fall overnight once the market reacts to the current price.

Consumption is already dropping, so there is downward pressure on the price.

How fast will it drop? When will it start? Who knows. But this price is not sustainable, and it will drop.
 
Originally Posted By: Tempest
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it appears price fixing is the norm... Wild price fluctuations based on nothing that should affect the price of current volume of refined gasoline...

Why does the price ever go down if there is price fixing?

Well if it was too obvious then we'd demand the government do something about it... Gas is a commodity sold to the public which should make its pricing very similar. But I also buy other commodities directly that have more uncontrollable factors controlling its price, less ability to change production volumes to react to the market.
Buying corn at the local feed stores for example, its not priced within a tenth of a cent of each other, its pricing doesn't jump up and down 10% when a farmer rolls his tractor in Ohio... The price changes due to market demands and production over time but not with the same sillyness of gasoline.
 
Originally Posted By: IndyIan

Well if it was too obvious then we'd demand the government do something about it... Gas is a commodity sold to the public which should make its pricing very similar. But I also buy other commodities directly that have more uncontrollable factors controlling its price, less ability to change production volumes to react to the market.
Buying corn at the local feed stores for example, its not priced within a tenth of a cent of each other, its pricing doesn't jump up and down 10% when a farmer rolls his tractor in Ohio... The price changes due to market demands and production over time but not with the same sillyness of gasoline.


http://www.businessdictionary.com/definition/inelastic-demand.html
 
Originally Posted By: Tempest
Originally Posted By: IndyIan

Well if it was too obvious then we'd demand the government do something about it... Gas is a commodity sold to the public which should make its pricing very similar. But I also buy other commodities directly that have more uncontrollable factors controlling its price, less ability to change production volumes to react to the market.
Buying corn at the local feed stores for example, its not priced within a tenth of a cent of each other, its pricing doesn't jump up and down 10% when a farmer rolls his tractor in Ohio... The price changes due to market demands and production over time but not with the same sillyness of gasoline.


http://www.businessdictionary.com/definition/inelastic-demand.html

So what's your point? Gas and feed do have relatively inelastic demands, why such different pricing volatility?
 
Originally Posted By: Tempest
Food prices in general are at or near record highs. And who says food prices aren't volitile?

Maybe because the entire food system, from field to checkout, is gradually becoming controlled by a few multinational corporations, just like oil and gas is now?
Grain is not even a significant cost in making boxed cereal, so doubling grain prices should result in a small price increase to maintain profit levels in free market. But cereal is increasing in price far beyond this, and the 2 or 3 companies that have a lock on shelf space at your grocery store realize they don't really have to compete with each other anymore. They move around the prices a bit and offer the odd sale so it sort of looks like competition, but there's no real reason to have prices double in the last few years...

FEED prices on the other hand at my local farm supply stores don't rise for no reason and don't bounce around with what's on the news... Maybe because there is still actual free market competition occuring since they aren't owned by huge multinationals...
 
Yes Java I work as a dreaded government employee (Law enforcement).

I have no problem with profit. If someone can make huge profit and people are "willing" to pay it then fine. But we as oil consumers have no choice to buy or not. That is out of our hands isn't it? We may reduce our consumption some but we can't not buy.

As stated by others it is how it is obtained.

Oil companies can control it. Just produce less to keep prices up. Buy up oil if they think it is going higher.

It is forced upon us because we all need oil. I and others can't just stop using it or chose an alternative that might be cheaper because there is no alternative.
 
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While oil company profits as a percentage may not be huge, the size of their earnings are.

You can either make your money on each unit or sell more units to make your money.

Neither one is right or wrong.

**And I do think profit can obtained in evil ways. (Greed) If it is forced upon people. (Example: selling bottled water for an outrageous price because of a disaster etc....)
 
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And I do think profit can obtained in evil ways. (Greed) If it is forced upon people.


The money for your salary/benefit/retirement is forcefully taken from other people. So does that make you greedy?
 
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is gradually becoming controlled by a few multinational corporations, just like oil and gas is now?


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That moniker goes to the state-owned national oil companies, NOCs for short, that sit on 77% of the world's oil--accumulations so big they make even Exxon's 12 billion barrels of proven oil reserves look meager.

http://www.forbes.com/2010/07/09/worlds-biggest-oil-companies-business-energy-big-oil.html

Government oil companies dominate the supply of oil.
 
Originally Posted By: ZZman
Yes Java I work as a dreaded government employee (Law enforcement).

I have no problem with profit. If someone can make huge profit and people are "willing" to pay it then fine. But we as oil consumers have no choice to buy or not. That is out of our hands isn't it? We may reduce our consumption some but we can't not buy.

As stated by others it is how it is obtained.

Oil companies can control it. Just produce less to keep prices up. Buy up oil if they think it is going higher.

It is forced upon us because we all need oil. I and others can't just stop using it or chose an alternative that might be cheaper because there is no alternative.


You don't need oil. You could survive without it. Now would you enjoy the standard of living you currently enjoy? Probably not.

We've only been using oil as a species for the past 150 years give or take. So mankind has lived thousands of years without it.

If it's gone tomorrow, we'll figure out how to live without it again.

You simply don't WANT to live a life without oil. But you CAN live without it.

If the price is too high, buy less. You might have to make choices. But there are few who cannot use less. They simply don't want to.

I still see folks idling in the drive through line and leaving their cars running when they go into the C-store.

Police cars are still left running, so apparently it's not to the point where police forces need to find a way to power their equipment without leaving the engine run. Or to install a device that would automatically run the car if the battery falls below a certain level of charge while directing traffic at an accident site.

Fuel is still cheap here. I cite the behavior of those who still use large quantities of it when they could simply turn the engines off.
 
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