Gas prices in my town went up 5 cents today.

Hmm, anyone think it was lowered just for the election?

My stock did too. :)

Rumor has it you can thank Democrats being elected for that one, Snake ;)




joe

My stock did too. :)

You bet they did - I was surprised at the amount of the bump.

Rumor has it you can thank Democrats being elected for that one, Snake ;)




joe

Whatever, bidness is bidness.

Everyone notice that gas prices went up today?No. Get a bicycle.

Nope. But unless Bush controls every friggin' crazy speculator out there I don't give him credit for being smart enough to manipulate giant economic markets anyhow. He probably can't even balance his checkbook. But if we ever get a crazy power hungry leader who can manipulate world markets we're all f*u*ked.

My gas stayed the same, and actually went down in a couple of places.

Spyder, you must watch the X files. I have been analyzing the energy industry for 20 years--believe it or not despite what Nancy Pelosi says, you have not been gouged, market forces are at play. Historically profitability in the refining and marketing end of the business has SUCKED, but no body cares when gas prices are low, the companies are bleeding and laying off people.
BTW there was a great article inth NYT yestersay(free registration) on what it takes to find and develop oil reserves in the Gulf of Mexico. I believe most Americans have not a clue what it takes to produce oil and gasoline, and thats a big part of why people buy the BS that idiots like Pelosi and Waxman expound on energy
http://www.nytimes.com/2006/11/08/business/worldbusiness/08gulf.html?em&ex=1163221200&en=a5c5eaeb5bd5e551&ei=5087%0A

B21

Yes and I am fully predicting the return of three-plus dollar a gallon gas by the end of the year. Perhaps a trip and a half as retribution.

Deek

Spyder, you must watch the X files. I have been analyzing the energy industry for 20 years--believe it or not despite what Nancy Pelosi says, you have not been gouged, market forces are at play. Historically profitability in the refining and marketing end of the business has SUCKED, but no body cares when gas prices are low, the companies are bleeding and laying off people.
BTW there was a great article inth NYT yestersay(free registration) on what it takes to find and develop oil reserves in the Gulf of Mexico. I believe most Americans have not a clue what it takes to produce oil and gasoline, and thats a big part of why people buy the BS that idiots like Pelosi and Waxman expound on energy
http://www.nytimes.com/2006/11/08/business/worldbusiness/08gulf.html?em&ex=1163221200&en=a5c5eaeb5bd5e551&ei=5087%0A

B21
I agree with ya, but you seem a bit confused on the 'market forces'.

The drive in price of gasoline seems to be driven by the price of crude oil on commodities markets.

Then you point to the drilling and refining of oil as the reason people don't understand the prices. But the costs really have little/nothing to do with the prices we are paying for gas right now...hence the huge profits they are currently raking in.

I think that's probably what you meant, just clarifying,

Silas

Gas prices in my town went up 5 cents today.

Hmm, anyone think it was lowered just for the election?
I sure as heck noticed they went up today. Slapping myself silly for not filling up on election day. Doh!

Not to mention having zero incentive to increase refining capacity.

as prices should be set on the gas that has been paid for, but as Silas points out it is based on the commodities futures.
So the gas is being ooffloaded in long Beach was paid for at a certain price months ago, but the resale value at the pump today is not based on that fuel, but the fuel that is being loaded in a tanker and won't be here for months.
and if you've been analyzing this for years and don't think there has been some fudging by the industry to optimize their profits that aren't really related to the crude prices set, you need to find other work.
Look at the prices when Hurricane Katrina hit. yeah wholesale prices (futures) went up because of the cut in future supplies but if wholesale to retail was fair, high prices for us would also mean high prices for them so their profits shouldn't have soared. If it was a purely honest system, then their profits shouldn't rise when barrel prices do, it's like the real estate market, buy high sell high, buy low sell low, you still basically get the same product. So how come the oil industry seems to operate on a buy low sell high model?

The oil market is most certainly manipulated. It's manipulated by OPEC.

Ok, so you don't believe the president of the US has the ability to call up Saudi Arabia and ask them to flood the market or tighten supply???

I guess it really means nothing that Prince Bandar is considered pretty much part of the Bush family?

Then there are the US reserves that can be manipulated by the president.

But don't get me wrong, I know there's a percentage of the price per barrel based on market speculation. But the explanation of why gas/oil prices fell so dramatically at the end of the Summer doesn't wash.

Don't you think it's quite suspicious that oil/gas prices started falling soon after GWB went to visit daddy Bush? Just in time for an election...

OPEC doesn't have any accountability. There's only speculation when other OPEC nations are cheating. When that occurs, Saudi Arabia either increases or reduces production.

So, that said, who says the oil markets aren't manipulated? They are manipulated.

I agree with ya, but you seem a bit confused on the 'market forces'.

The drive in price of gasoline seems to be driven by the price of crude oil on commodities markets.

Then you point to the drilling and refining of oil as the reason people don't understand the prices. But the costs really have little/nothing to do with the prices we are paying for gas right now...hence the huge profits they are currently raking in.

I think that's probably what you meant, just clarifying,

Silas
that's not exactly what I said, but the costs of producing oil and natural gas HAVE skyrocketed and they have a lot to do with the prices we pay right now becasue they have a lot to with the price that refiners pay for their feedstock. True there are record profits but they are already falling becasuing costs are rising more quickly

SO why did Saudi quietly cut 300,000 barrels/day of production months ago? No you did not read about it in the NYT but that is what they did, as oil prices fell--they were quietly trying to support the price even before the election. Their revenue means more to them than Bush's popularity ratings. After all they have been funding extremism around the world and that ain't cheap. Yes we have a relationship with the Saudis, but it is far more complex than you speak about. Reading the liberal press about the energy markets is no way to learn what really goes on.....
OPEC produces 1/3 of total daily consumption--I never said they did not have a huge influence on the price of oil. But they don't "control" it either. ANd the idea that the administration can raise or lower prices at the pump is so laughable. I am not going any farther in this discussion--I am probably too fired up becasue I am anticipating the congressional hearing that will start up agaim,, with the end result that LESS oil and natural gas will be produced in this country, more jobs will be lost, and we will be even more dependent on foreign oil, and now foreign natural gas.

SO why did Saudi quietly cut 300,000 barrels/day of production months ago? No you did not read about it in the NYT but that is what they did, as oil prices fell--they were quietly trying to support the price even before the election. Their revenue means more to them than Bush's popularity ratings. After all they have been funding extremism around the world and that ain't cheap. Yes we have a relationship with the Saudis, but it is far more complex than you speak about. Reading the liberal press about the energy markets is no way to learn what really goes on.....
OPEC produces 1/3 of total daily consumption--I never said they did not have a huge influence on the price of oil. But they don't "control" it either. ANd the idea that the administration can raise or lower prices at the pump is so laughable. I am not going any farther in this discussion--I am probably too fired up becasue I am anticipating the congressional hearing that will start up agaim,, with the end result that LESS oil and natural gas will be produced in this country, more jobs will be lost, and we will be even more dependent on foreign oil, and now foreign natural gas.

So, you admit the oil market is manipulated. That it's an oligopoly. That Saudi Arabia has a huge influence over the price and quantity?

Oh, the investigations into Cheney's energy task force will be fun...

My gas stayed the same, and actually went down in a couple of places.

In my town in NC gas dropped a couple of cents over the last few days as well.

that's not exactly what I said, but the costs of producing oil and natural gas HAVE skyrocketed and they have a lot to do with the prices we pay right now becasue they have a lot to with the price that refiners pay for their feedstock. True there are record profits but they are already falling becasuing costs are rising more quickly

for their costs to catch up? sorry barry, I ain't buying it.
if I sell bananas and I'm getting them for $1 a pound and then resell for $1.50 that is a .50c on the dollar profit. If Banana wholesale price goes to $2 and I then resell at $3.00 I'm still at the same profit rate. That isn't happening in the oil industry, and again the gas I pump today's price is based on the oil price that they are paying now, not what they paid for the fuel I pump. So they are selling $3.00lb bananas they paid $1 a pound for in anticipation of the $1.50 price hike, which by then we'll be buying at $4.

I'm no economics whizz but I do know that rising wholesale prices shouldn't mean soaring profits

The oil market is most certainly manipulated. It's manipulated by OPEC.

Ok, so you don't believe the president of the US has the ability to call up Saudi Arabia and ask them to flood the market or tighten supply???

I guess it really means nothing that Prince Bandar is considered pretty much part of the Bush family?

Then there are the US reserves that can be manipulated by the president.

But don't get me wrong, I know there's a percentage of the price per barrel based on market speculation. But the explanation of why gas/oil prices fell so dramatically at the end of the Summer doesn't wash.

Don't you think it's quite suspicious that oil/gas prices started falling soon after GWB went to visit daddy Bush? Just in time for an election...

OPEC doesn't have any accountability. There's only speculation when other OPEC nations are cheating. When that occurs, Saudi Arabia either increases or reduces production.

So, that said, who says the oil markets aren't manipulated? They are manipulated.

Spydie, if every politician in the country threw all their money at the commodities oil market to try and raise prices, they might go up by a nickel...

OPEC certainly controls a big chunk of the oil produced in the world. Their actions often influence prices in the commodities market.

I'm in agreement with ATP though, there's a correlation here but the oil companies have also taken advantage of it. The way the system is set up, there's no reason for them not to, it's about maximizing profits for them,

Silas

Huh??? Uh NO, the oil market is NOT an oligopoly, that is the point. Even if you consider OPEC to be one participant, which they often are not because they are not in agreement and most of them are always producing at capacity, there are HUNDREDS of industry participants. ExxonMobil sells about 4% of world consumption, which is far below Microsft or Boeing or Schlumberger's respective market shares, and hardly enough to control the market pricing. Yes the Saudis have a relatively large influence but influence is not control.

B21

OPEC sets the prices (non free market yes, as they are working in consortium and setting prices, controlling output) sounds like a monopoly to me, kinda like the diamond business, false supply created to keep prices stable annd no competition.

but again, this is WHOLESALE RAW. If wholesale prices are up and thus retail, it doesn't explain why the middleman is setting RECORD after RECORD profits. If their costs go up from OPEC and they passed this on th the consumer, their profits should be about the same yes?
Now consumption went down due to prices (people drove, travelled less) why is it the industry made money in record amounts?
(I know the answer to this, people think....who uses the most fuel in this country?)

Well you are expressing a common but erroneous line of thinking. THe reason that oil prices are high is not that OPEC is controlling output-in fact virtually all the OPEC countries are producing full out, and only the Saudis have any spare capacity, most of which is poor quality heavy crude for which there is no spare refining capacity. The lack of spare capacity and the fear of interruption from terrorism is the main driver of current high prices. I am sorry, you are throwing out the common emotional responses without the factual knowledge to back it up. You may be surprised to know also that most of the oil companies want LOWER oil prices not higher. I am going back to bicycle talk now which is my only reason for being on this site, so you get the last word should you want it.

best

b21

and despite you calling my view erroneous you NEVER explained why their profits go up when oil prices do. The main thrust of my question was avoided every time, so please please come back and explain to us 'emotional thinkers' why when oil prices rise (or futures at least)
why does the profit ratio of the oil companies go exponential and not arithmetic to cost. This is what I want explained PLEASE?!!!

oh and the answer is the US Military is the #1 consumer so while civilian use is down,( travel was down this summer for example), oil/gas usage was up.

They make alot of money because their costs are fixed. OPEC sets the retail price and that effects the cost to buy the oil, not to refine it.

The entire oil business is danagerous to the economy and our health. There is too much money invovled when you haev the world by the balls to give them gas for cheap.

None of these companies support low costs of oil. Thats why there has been little preasure to drive the cost of oil down or look for alternative sources for energy. They bully the market place to drive prices up. At a moments notice prices go up 10-20% and then enver seem to settle back down again.

If one day milk was $2 and th next it was $4 and then back down to $2.50 I just got ripped off. This is the same with the gas industry. We should just fix the cost of oil and not buy if it goes above. See what happens when we drop our purchasing. In europe alot of countries have fixed gas prices, there is no reason this could not be done here. Considering our need for gas the gov't shoudl be regulating it, not greedy companies.

Since we're the auto market we should develope an electric car worthy of production and use. Keep it away from the hands of texico and the likes so it actually hits the market. I'd be the first person on the block to buy an electric car. Just give me 300 miles to a charge and I'll be set. I dislike the oil industry, everything they touch goes up in price.

If you're like me and you go out of your way not to purchase gas you might be interested to know Toyota is coming out with an electric car that can stay in electric mode, be charged and home and only uses the gas motor to keep the batteries charged.