DescentBB

This is not about Bush's oil war. I have a question....the oil companies say the 42 dollars a barrel is because of various reasons. They say refining capacity is at it's maximum, yet, they are posting record profits. Birds might be able to explain to me why it works like that. If they are at max capacity, their profits should not exceed a ceiling level. Yet, even with the maxed out conditions, they seem to be making MORE money?? I don't know.

Poligopolists etc.

Oil rich nations and oil companys are as close to theves as you can get legally.

You would think that the 'free press' would have some stories about it, seeing that gas prices are at the top of the conversation list. Gee, I havn't seen anything other than 'Gas prices rise..BUY AN SUV!!!'

It's the "American Way" screw the world so you can make a few bucks.

The price is not fixed so maximum output does not equate to a maximum price.
Supply and demand dictate price....more demand and limited supply causes a higher price...the higher the price the higher the profit.

Limited supply? How do we have a limited supply? We still get oil from all the oil-bearing countries. The only drain on the normal intake is the military. They can't be using so much that the world is operating on a limited supply.

It sounds like oppourtunism and outright theft.

Supply and demand. Call it opporunism, extortion, whatever. OPEC controls the price of oil by how much it decides to produce. All the stuff about "things are at max production blah blah" is BS. They can extract more oil if they choose.

The US govenrment could lower the price of oil by dipping into our own reserves. We choose not to, so we are at the whim of OPEC.

question:

Testiculese wrote:Limited supply? How do we have a limited supply?

answer:

Birdseye wrote:OPEC controls the price of oil by how much it decides to produce.

Exxon et al refineries may be running at maximum production but it's the spigot controlled by OPEC that determines the supply and thus the price.

Since the price is now dropping I doubt we'll see the reserves tapped because, as I understand it, that would affect the price but only temporarily and ultimately we would have to replenish the reserves, so tapping them isn't free.

Yes it is profiteering off of a bad situation, not as outrageous as the Enron manipulations but it still sucks!

I think you all missed what I was saying about the record profits. There is no way they can be at maximum capacity if they are posting record profits. If they are maxed to the limit of what they are producing, their profit margin would be a steady percent because they cannot do any more to make money. Yet they are going above and beyond what they normally make. So either the $42 a barrel crap is a big lie, or they are not at max capacity, regardless of what OPEC sends out.

Zuruck, I understand what your saying- but I think your missing something. Gas prices depend on how much oil we can refine, not how much we do refine. Probably what they are saying by max capacity is that they would have to build more plants to refine more. Prices are not controlled by how much is being refined, but by how eminant it is that the refineries will run out of oil to refine. Think of the refining as a consumer end process, something that happens after we buy the gas instead of a factor in the supply. I will say this: people don't realize how having such a dependance on oil hurts us. The only reason why OPEC can get away with toying with us that way is because there really isn't any significant competition to oil.

boom, understood. i guess my beef is that we hear everyday about supply woes and such from the industry, yet they are pulling in greenbacks like it's nobody's business.

The US govenrment could lower the price of oil by dipping into our own reserves. We choose not to, so we are at the whim of OPEC.

For exactly how much and how long? Perhaps a few cents for a few days. The reserves aren't a limitless supply.

The real measures one can take are to use alternative forms of transportation or pooling. Of course most people won't change their habits and this is the real root of the problem.

Something else- too many things in our world are petroleum based. Not only do alternative fuels need to be found, but alternative sources for plastics and synthetics. Think about everything in your house. How much of it has plastic? Your computer monitor...keyboard...mouse...your particle-board computer desk...your kitchen...the bottles of milk, juice....almost every damn thing has something to do with oil...everything needs to be transported from several hundreds (if not thousands) of miles to be delivered to your door. It's not likely that it was brought there by a donkey cart.