Why Are Gas Prices Going Up While Oil Keeps Falling?

[jgoose71 0]

I am gulable and trusting enough where if some one sold me a line like this I would try to believe it-

"The government is artificialy driving up the prices to keep down the amount of gas used and to keep Americans with short attention spans focused on our need to get off of foreign oil while also using the extra money to fund new technology and also pay down the huge deficit we are creating with the stimulus package."

Instead this is what I found- http://www.cnbc.com//id/29176966

If they want to just continue to price gouge us, why don't they just say so?

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[kbordson 8]

The answer on this forum will likely be:


"It's W.'s fault."

[jgoose71 0]

Sorry, but W. is gone. All of this happened shortly after Barak announced that off shore drilling is cancelled. Coincidence?

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[billvon 3,118]

>If they want to just continue to price gouge us, why don't they just say so?

Not sure if you are aware of this, but every company in the US wants to gouge you. They will charge the highest price you are willing to pay them for any good or service. This is how capitalism works. The alternative is socialism, where the government controls the means of production and sets prices.

Gas prices will continue to be high until people start buying alternatives, like diesel, natural gas or electric cars. Then, once gas companies realize that people are NOT willing to pay a lot for gas, the price will come down.

[akarunway 1]

Quote

I am gulable and trusting enough where if some one sold me a line like this I would try to believe it-

"The government is artificialy driving up the prices to keep down the amount of gas used and to keep Americans with short attention spans focused on our need to get off of foreign oil while also using the extra money to fund new technology and also pay down the huge deficit we are creating with the stimulus package."

Instead this is what I found- http://www.cnbc.com//id/29176966

If they want to just continue to price gouge us, why don't they just say so?

Here is a little edumacation on the subject. I doubt anyone will take the time to read it tho. Very interesting. http://consumerist.com/consumer/features/why-is-gas-so-freakin-expensive-263887.php

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[nanook 1]

Actually, I find nothing wrong with the information on that article. But I don't like the conspiracy tone about it. It's business. They call it price gouging on price descent; I call it recouperation. Keeps business going and not failing. It's all semantics. depending on which side of the counter you are on, it's unfair or survival.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[happythoughts 0]

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Actually, I find nothing wrong with the information on that article. But I don't like the conspiracy tone about it. It's business. They call it price gouging on price descent; I call it recouperation. Keeps business going and not failing. It's all semantics. depending on which side of the counter you are on, it's unfair or survival.

How much "recuperation" do you need if you set a
record for profit in 2007, and then break that record
in 2008 by 20%.

clicky

Quote

HOUSTON – Exxon Mobil Corp. on Friday reported a profit of $45.2 billion for 2008, breaking its own record for a U.S. company.

As a friend of mine says, "If you've got it, a truck brought it".
The price of oil adds to the cost of everything by making it more expensive to deliver.

Everyone in the country is struggling and you are worried that Exxon will suffer a little.
I don't think so.

[billvon 3,118]

>How much "recuperation" do you need if you set a record for profit in
>2007, and then break that record in 2008 by 20%.

As much as the market will bear.

>The price of oil adds to the cost of everything by making it more
>expensive to deliver.

Yep. And because everyone uses oil based fuels for transportation, they will continue to be able to get whatever they ask for fuels.

[nanook 1]

it kept them in the black. Hell, they lost 33% the last quarter.

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Everyone in the country is struggling and you are worried that Exxon will suffer a little.
I don't think so.

If a giant like Exxon is struggling, you are going to be a lot more worried about the economy that the "truck brought"

If you think this is "struggling", you have been spoiled.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[happythoughts 0]

Quote

it kept them in the black. Hell, they lost 33% the last quarter.

Ok, you need to read the entire article.
They didn't lose 33%. They made 33% less than last year (which was a record year). They made a
net profit of 7.8 billion.

They are VERY much in the "black".

Quote

HOUSTON – Exxon Mobil Corp. on Friday reported a profit of $45.2 billion for 2008, breaking its own record for a U.S. company, even as its fourth-quarter earnings fell 33 percent from a year ago.

The previous record for annual profit was $40.6 billion, which the world's largest publicly traded oil company set in 2007.

Quote

Irving, Texas-based Exxon said net income slid sharply to $7.8 billion, or $1.55 a share, in the October-December period. That compared with $11.7 billion, or $2.13 a share, in the same period a year ago, when Exxon set a U.S. record for quarterly profit.

A year ago, they set a US record for quarterly profit.
They aren't hurting. They are making money like
they are printing it.

[Coreece 190]

Quote

A year ago, they set a US record for quarterly profit.
They aren't hurting. They are making money like
they are printing it.

Them Black Gold Texas Tea Baggin' Basturds!

Your secrets are the true reflection of who you really are...

[loumeinhart 0]

Quote

Not sure if you are aware of this, but every company in the US wants to gouge you. They will charge the highest price you are willing to pay them for any good or service. This is how capitalism works. The alternative is socialism, where the government controls the means of production and sets prices.

Gas prices will continue to be high until people start buying alternatives, like diesel, natural gas or electric cars. Then, once gas companies realize that people are NOT willing to pay a lot for gas, the price will come down.

A spot-on post in s/c is refreshing

[Coreece 190]

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A spot-on post in s/c is refreshing

yup...actions speak louder than words.

People can bitch all they want...changes nothing.

Your secrets are the true reflection of who you really are...

[happythoughts 0]

Quote

>How much "recuperation" do you need if you set a record for profit in
>2007, and then break that record in 2008 by 20%.

As much as the market will bear.

>The price of oil adds to the cost of everything by making it more
>expensive to deliver.

Yep. And because everyone uses oil based fuels for transportation, they will continue to be able to get whatever they ask for fuels.

Since we live in the global economy, I am wondering
how this will actually relate.

The economies of India and China are stepping up as
big consumers of everything. The oil may just move
to other buyers, so I am unsure how low oil will actually go.

However, the reduction in American consumption would help the trade imbalance.

Many efficient cars are limited range or limited size.
(You can't take a family of 4 on vacation in a two-seater electric.)
So, there needs to be a feasible implementation.
Many American two-car families could use an electric car for work commuting
and still keep a "family-size" vehicle as the second car.
I'd like to see it happen.

Probably the largest movement in the car market
will be for single people. For people in their 20s,
with a 7 mile commute, an electric is ideal.

Also, there appears to be a glut on the oil market.
So, for people quoting the supply/demand model for pricing, it is not applying.
clicky

Quote

The high price of oil spurred so much production that the globe became awash in oil.
The January contract, which expired Dec. 19, settled at $33.87, the lowest level since early 2004 as brokers and traders attempted to unload supply for whatever price they could get. U.S. stockpiles have risen at the key storage facility in Cushing, Okla., and tankers carrying millions of gallons of crude float around the world with no destination in mind in hopes that prices will rise.

[Andrewwhyte 1]

Quote

Also, there appears to be a glut on the oil market.
So, for people quoting the supply/demand model for pricing, it is not applying.

Of course it applies. A glut is the mechanism the market uses to reduce prices when demand falls below supply. No market is ever in true equilibrium just as the sea never is. The oil market is always in a momentary glut or shortage, this one is just a bit larger and taking a bit longer to correct. Suppliers are large operations and so take some time to correct. Here in Alberta service wells are starting to shut down, but they generally have contracts to complete first so it is not a day to day thing. OPEC nations co-ordinate production decisions so it is even slower to react.
The supply-demand relationship is exactly what is driving prices.

[Amazon 7]

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Gas prices will continue to be high until people start buying alternatives, like diesel, natural gas or electric cars. Then, once gas companies realize that people are NOT willing to pay a lot for gas, the price will come down.

I am already using bio-diesel its a little more expensive.. but my vehicles get far better milage... being diesels... than all those gas guzzlers out there. It does balance out... even my genset is a diesel when I want to go off the grid for a bit... or when the grid goes off in a storm.


Most people in this country just dont give a shit.. all they will do is bitch and moan and keep doing the same things they have always done.. and will not make any changes until there are supply problems.

[billvon 3,118]

>Many efficient cars are limited range or limited size.
>(You can't take a family of 4 on vacation in a two-seater electric.)

Right. But you can easily take them in a Prius, an Expedition running on biodiesel or a motorhome running on natural gas. There are a lot of options.

>Also, there appears to be a glut on the oil market. So, for people
>quoting the supply/demand model for pricing, it is not applying.

?? That's how it works. Oil is in an oversupply situation so it's dropping in price. Gasoline, so far, is not, so its price is remaining _relatively_ high, although it has fallen over 50% since its highs of last year.

[nanook 1]

Quote

A year ago, they set a US record for quarterly profit.
They aren't hurting. They are making money like
they are printing it.

So they are. They must be very evil. We're talking about the Oil industry, not the Housing market. demand in oil is highly inelastic. increase in demand for crude will always cause an increase in price which usually causes more profit due to the demand vs. price.

Unless you think they should suffer just because everybody else does. You can complain about it or be proactive. Buy some of their stocks. Don't be a victim.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[happythoughts 0]

Quote

Quote

A year ago, they set a US record for quarterly profit.
They aren't hurting. They are making money like
they are printing it.

So they are. They must be very evil. We're talking about the Oil industry, not the Housing market. demand in oil is highly inelastic. increase in demand for crude will always cause an increase in price which usually causes more profit due to the demand vs. price.

Unless you think they should suffer just because everybody else does. You can complain about it or be proactive. Buy some of their stocks. Don't be a victim.

I wasn't complaining about that. I was pointing out
your misinterpretation from the following line:

Quote

Hell, they lost 33% the last quarter.

As long as everyone understands that they didn't
"lose" 33%. It wasn't a "loss". It was just 33% less
than a world record setting profit. Almost no other
corporation has done nearly that well.

Their profit was nearly $8 billion in ONE quarter.

Also, it has to be 33% of "something".

I am unsure if you are not reading correctly, or merely
doing some selective snipping.

Either way, a good discussion is based on facts and
you seem to be creating a bias through your ommissions. Pointing out your misrepresentations
is not complaining about Exxon, it is complaining
about your posts.

[rushmc 23]

And to the 'world setting" profits. Tell us all please how that term was picked.

What made the money they made a world setting record.

Oh, and I will tell you up front, this question I am asking IS setting a trap.

And I will keep the posts to facts if you will....

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[billvon 3,118]

>And to the 'world setting" profits. Tell us all please how that term was picked.

It was actually "world record setting profit." That means that they set a record for highest profit for any company ever. (To be more accurate, the record for highest profit in a capitalist country with reporting requirements.) For more info:

=================
Exxon Mobil: Biggest profit in history

The largest U.S. oil company surges past analysts' estimates with a posted net income of $14.83 billion and sets a national record for quarterly profit.

NEW YORK (CNNMoney.com) -- Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.

Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.
==================

[nanook 1]

Okay, I see. the disconnect here was not intentional. I see this as a "loss" because a quarter earned less than a previous period. It's a dynamic sense. less realised profit made. A hiccup. I see things a little different as a share-holder. Usually, though as with the article I commented on, people tend to look for evil-doings on what is considered business. They are seeing things that aren't there, usually a result of a lack of understanding or a need for a bad guy.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[rushmc 23]

Quote

>And to the 'world setting" profits. Tell us all please how that term was picked.

It was actually "world record setting profit." That means that they set a record for highest profit for any company ever. (To be more accurate, the record for highest profit in a capitalist country with reporting requirements.) For more info:

=================
Exxon Mobil: Biggest profit in history

The largest U.S. oil company surges past analysts' estimates with a posted net income of $14.83 billion and sets a national record for quarterly profit.

NEW YORK (CNNMoney.com) -- Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.

Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.
==================

And what percentage return on investmest (%) did they get on their investment?

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

....context is everything ......

Thanks billvon, I am looking forward to where this is going

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[billvon 3,118]

>And what percentage return on investmest (%) did they get their
>investment?

37% return on investment TTM.