AppleFrank
PR Addict
Just filled up my fuel tanks cost me $1865.00,that should last about a month.
People talk about oil prices like they are just floating around with no rhyme or reason. It's almost like they think oil companies finally thought, "Hey, let's charge more so we can make more money!" So what happened in the fall of 2008 when gas prices fell? Did oil companies say, "Well, we've made enough money, so lets charge less."? Hardly.....
Drilling in the U.S. would have some effect on short term cost since you loosen up the supply, but most experts agree that would be short lived. The real problem is huge demand increases from China and India. Our rioting friends in the Middle East are causing speculation to bump the price a little as well, but world demand is the main issue. Our government can't just say they are going to bring gas prices to $2.50. And even if they could, doesn't that go against the free market system/limited goverment you seem to side with elsewhere?
I feel it does not matter if gas prices are 2.00 a gallon or 5.00 a gallon if you wanna go ride then you are going to. Me personally have just adjusted my budget, cut out nonsense spending and still go ride and race each week.
If what you say is true then why are the oil companies still posting RECORD profits ??????
If what you say is true then why are the oil companies still posting RECORD profits ??????
They are making record profits because the price of a barrel of oil is going up. I don't dispute that. What I do dispute is the reason for the price increase. It is not the oil companies suddenly deciding to bump prices! There is more to it then that. The oil companies just happen to benefit from the price increases.
Look at it this way. Lets say today, it is announced that not a single house will be built in northern OH in the future. What happens to the value of your home? If it goes up, is it because you have decided you want to charge more? Or is it because other factors in the supply and demand chain caused the value of your home to change?
While they are posting "record profits", the percentage of profit or profit margin has not changed. Its still around 16%. The "record profits" is something politicians like to toss around to make you look at someone besides those who are responsible. If you produce a product for $100 and sell it for $116, and the cost goes up to $200 to produce it, and you have to invest twice as much, to maintain your 16% margin youll sell it for $232 and have "record profits".
Does that mean you are ripping off the consumer? I hope not, because every business operates on a profit margin percentage of investment. The first investment in producing gasoline is the cost of crude which is determined by the world market - supply and demand. Changes in demand will temporarily affect price but he who controls supply, CONTROLS the price. OPEC is a gathering of oil producing nations who collaberate to decide how much supply they will make available to mainatian their targeted price for crude.
I don't follow you tim, you are saying the profit margin hasn't changed(still 16%), but then cost to produce has gone up. Thats why the company's are having record profits. Obviously the profit margin has gone up in the past couple years, that's what determines the profits.
The oil company's aren't posting record Gross income.
Just my thought.
Oil dropped almost $10/barrell today (dropping it back under $100) due to reduced demand.
Supply isn't an issue anymore, they have been saying that for quite some time.