My son sent me this article. It was an eye opener for me. Legitimate Reason for Difference Between Crude Oil Price Trend and Gas Price at the Pump Further in the article:
The beef most Americans have is this... They can see gas prices jump as much as 50 cents in a day. Here in the volatile weathered Gulf South, I've seen it jump a dollar in a day... I have never, ever, ever seen it drop more than 7 cents in a day no matter how far oil dropped in the market that day. The oil industry can say what they want, but they pulled record profits. I have no problem with that. However, the rising gas prices have put a beat down on the economy until the economy gave in. The market needs to be allowed to find that common middle between maximizing the profits for the industry while allowing the consumer a price they can live with that affords both personal and professional usage of petrol.
I give up on this issue. The oil guys turn record profits not just for them but for any company in the history of the world during one of the worst economic meltdowns since the Great Depression and everyone here is just fine and dandy with that. Not worth debating on this board.
well Dave can choose to not participate, I was just offering some glimpse into the consumer side of the frustration. I don't have a problem with the free market dictating price, my contention is that this isn't the free market at work. I know families in this area were starting to talk about taking trips to see family and take vacations again... but now that gas prices are rising at the pump I see people putting the kabash on that again. For several years now we've been told, as consumers, that it is the price of a barrel of oil that is the benchmark for future gas prices. Now we're being told it wasn't the barrel we thought it was all along? People, generally, grasp the concept of a fluid market. What escapes them is the rationality that the market is only volatile when we're talking about an increase in price at the pump.. but there seems to be a parachute effect in place for a drop in the price of gas. We've got tankers sitting off the coast here waiting for the prices to go back up.. As I believe T mentioned before, that isn't cheap...but in time it becomes a part of the investment itself.. they are just waiting for the prices to catch their cost and artificially inflate the market.
What would you suggest? I'm all ears..... Another way of putting it is this......"Exxon makes record contributions to funding local, state and federal programs". Would that make things any better? But indeed it's true..... Exxon in years past has paid taxes to the tune of approx 3 dollars for every 1 dollar in earnings. You can't pay taxes on your earnings if you don't have earnings....what would Pelosi do with her rats if Exxon didn't contribute so mightily to line her coffers.....????
George, I usually get a lot of guff here when I criticize the oil company profits as excessive and even obscene when the rest of the nation is in dire straits. My biggest beef is that the business they are in deals in a commodity that is one of absolute necessity to every American and that is where I have a problem with their all time record profits while at the same time ships sit offshore waiting for higher prices and gas is significantly more volatile on the increases than the decreases as Corey explains. But I have heard it here that we are all getting filthy rich in the stock market off these guys so why are we complaining when we are making money hand over fist and our portfolios are skyrocketing along with the oil company profits? :wink: :roll:
MCG, I personally am not "ok with it." However, I am a realist. I do what I can and don't piss and moan about what I can't. What I can do during times of higher prices is REDUCE my usage. Cindy and I have done several things to help: 1) We sold our house and property in Jarrell and moved closer to work. That cut our commute in half. 2) We bought fuel efficient vehicles. We had vehicles that averaged 16 and 18 mpg and bought vehicles that average 28. 3) We cut out any unnecessary trips. Grocery store trips happen on the way home from work rather than special trips. Vacations have been cut to almost zero. When we stop using more than we need (reducing the demand), the supply will go up and the price will go down to get people to use more.
What do you suggest? Do you no longer believe in private property? Can they not choose to sit on their oil and take a risk that prices will rise? It's their oil.....why should they not have the right to sell it when they want to? Do you think we should pull a Chavez and nationalize the oil industry? It is private property...it is owned by people all across the US and indeed the world. It is owned by virtually everyone on this board....it is owned by widows, retirees, school teachers, dentists, lawyers, auto workers, virtually everyone.....what do you propose to do with their property?
Good points Tom and BT. Certainly lower consumption did result in a price crash in oil barrel values and at the pump. But still we are at the mercy of a monopolized commodity and when profits soar as they have for the oil refiners you would like to see more of that wealth forced into R&D to come up with more economical solutions because after all......we own some of those profits as well because it's our hard earned cash that fed those profits and we do not choose to use fuel just because we view it as a luxury item. Many people have cut down on consumption and that is another key reason the auto industry is on the skids because the high profit SUVs went by the wayside for example.
That is just not a true statement....describe for me the participants in said monopoly. You suggest more put in to R&D? How much? This decade Exxon has spent almost $200 hundred billion dollars in R&D including exploration expenses. Keep in mind that Exxon is but a bit player in the global oil business....a minnow competing against the giants. Do you honestly believe that you or Nancy Pelosi are in a better position to allocate their resources for them and enable them to compete against the giant nationalized oil companies?
http://www.msnbc.msn.com/id/22949325/ The article says their capital and exploration spending was 21 billion in 2008. Where does R&D fit into that if it does? I don't say that Exxon specifically has a monopoly but the commodity in which they deal in is required consumption for Americans and we do not really have competitive choices other than just a few pennies difference between pumps. Not much impact from 4.22/gal and 4.12/gal.....that's pretty much a monopolized price structure.
The SUV sales died because SUVs are not fuel efficient. One of the two vehicles we were driving was a GMC Envoy, a SUV. We took the long term fix and bought a Honda Accord to replace that SUV. Just like a corporation that takes a one time charge for expenses related to reductions in force, we took a hit to get rid of the inefficiency of that vehicle. Why did we not choose another GM vehicle? Cost vs resale value for GM vehicles sucks. (American vehicles in general actually). GM had nothing with the features and mileage that the Accord offered that came within $9000 of that vehicle. I had driven GM for a long time. I WAS a loyal GM owner. I still own my 3/4 ton 4WD diesel that I drive an average of 40 miles/month right now. I remember Chrysler being bailed out years ago. When that happened, they realized that they made vehicles that the public didn't want. They downsized their vehicles and made them more fuel efficient. The American car companies need to control costs to give the public the vehicles they want/need at an economical cost. They need to work on quality to guarantee a better resale.
I just paid $1.699. Please tell me that you are still referring to prices from last year and not paying that much now.
Exploration is very much R&D....much of their capital expenditure is to upgrade equipment to maximize yields, etc. tapping sources in fields heretofore unreachable by older generations.... Crude oil is a commodity.....you can't add value to it by putting in a moon roof our slick wheels....it is what it is. We've had this discussion about gas at the retail level....you rail about prices, you rail about Exxon's profits. Which is it? The retail gas business operates on razor thin margins dominated by the convenience stores who pump it below cost as a loss leader to come in to their stores......the margins are so bad Exxon decided earlier in 08 to get out of the business.....you're chasing your tail.
Yes...took the high price that was last summer because pennies difference were negligible in overall savings percentage at that price compared to 1.69......but hey our price in Detoit is now near 2.00/gal.
Yes...took the high price that was last summer because pennies difference were negligible in overall savings percentage at that price compared to 1.69......but hey our price in Detroit is now near 2.00/gal.