Something is wrong here... - Page 3

jaxmike · #21 10-28-2005, 03:24 PM

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Today Exxon Mobil released its quarter 3 earnings and they have record profits of $10 billion. Also several other oil companies are showing major profits.

Yet at the pump we're still paying INSANE gas prices. Why aren't these companies sharing the burden in with the rising price of crude oil??? Ridiculous.

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Why should they?

#22 10-28-2005, 03:27 PM

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Yet at the pump we're still paying INSANE gas prices.

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Then stop doing that and they will need to lower their prices.

Newsflash: You don't have a "right" to a gallon of processed oil (processed at somebody else's expense) on YOUR conditions. If you find the transaction to be a bad deal, then don't make it. Nobody is forcing you to do so. If you can't live in this world without somebody providing you with cheap energy, then that is your problem, not theirs, and until enough people decide that it is a bad deal for them, there is no reason they should have to conduct business on your terms.

phage · #23 10-28-2005, 04:28 PM

Do you consider a car a necessity?

BreakEvenPlayer · #24 10-28-2005, 04:46 PM

Ok, I've been flamed pretty good here, and deservedly so. The wording of my original post was bad.

I'm not trying to claim profit is a bad thing. It's just that when the price of a barrel of crude oil is the most expensive it's ever been, and the price of a consumer gallon of gas is the most expensive it's ever been, I don't understand how the Exxon corporation can have the greatest quarter profit for any company in the HISTORY of the world. Not to mention that the economy isn't too hot.

I know Exxon does a lot of production, so yes simple supply (low) and demand (high) will show a high profit for them because they are a producer/seller of these barrels... but they also must do some purchasing of crude oil, as oil produced by our own companies is a small percentage of our total oil demand.

I'm young and stupid, help me understand this.

SheetWise · #25 10-28-2005, 07:41 PM

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I'm young and stupid, help me understand this.

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It's called risk and reward. There's a lot of money invested there -- and there have been times they didn't do this well. If you like the numbers, and don't believe there's any risk, buy Exxon stock.

bobman0330 · #26 10-28-2005, 07:46 PM

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Reducing taxes is the absolute wrong idea to lower oil prices

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Finally, I can agree with TheWeatherman about something! This is absolutely true. Gas is at its current price levels because people are willing to pay that much and there's a supply shortage. In other words, people are buying pretty much all the gas that is produced at $3/gal. If taxes were eliminated, people would still bid the price up to $3/gal., but the companies would get to keep more of that instead of sending it on to Uncle Sam.

bobman0330 · #27 10-28-2005, 07:51 PM

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For everyone here who has argued in favor of oil companies being able to charge what they want for gas, is there one person who can stand up and defend the government for giving them huge subsidies amid their record profit times? I agree with you about the free market figuring out the prices. I just cannot forgive or possibly explain these subsidies. That's sickening. Stealing money out of my pocket in the form of taxes and giving it to fat cat oil cronies.

Thanks Bush & Co.! [img]/images/graemlins/mad.gif[/img]

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I'm not an expert in the energy bill, so my analysis could be 100% wrong factually.

The point of subsidies to energy companies is not to prevent them from going out of business. It is to incentivize them doing things that they would not otherwise do. Say that there's a bunch of oil available in a friendly country. Obviously, we want that oil developed and made available to improve our energy security. However, say it costs $4 to liberate this oil from its current form and produce 1 gallon of gasoline. No company will undertake this venture at a time when gas is selling for $3/gal. (You don't make $10B by being stupid...) If gas prices spiked further for whatever reason, they would start doing it, but there would be a substantial time lag required to do the research, build the facilities, etc. While that was going on, there would not be sufficient gas available at a reasonable price. Cue economic catastrophe... By subsidizing ventures of this type, Congress makes it economical for the companies to develop these reserves now.

#28 10-28-2005, 08:46 PM

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Yet at the pump we're still paying INSANE gas prices.

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Then stop doing that and they will need to lower their prices.

Newsflash: You don't have a "right" to a gallon of processed oil (processed at somebody else's expense) on YOUR conditions. If you find the transaction to be a bad deal, then don't make it. Nobody is forcing you to do so. If you can't live in this world without somebody providing you with cheap energy, then that is your problem, not theirs, and until enough people decide that it is a bad deal for them, there is no reason they should have to conduct business on your terms.

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Great post. I'm sick of reading posts from the anti-capitalists wanting the government to do everything for them. Government was never intended to be as large as it is today.

MMMMMM · #29 10-28-2005, 08:56 PM

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First of all, you are not paying anything like insane prices. You realise that a gallon of gas has about 600 man hours worth of energy, right? And you get it for 3$, that ain't bad, huh?

And secondly, that's the market. The end price has little to nothing to do with production price...

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$3 is nothing, we are paying $9-$10 in the UK, nearly 80% goes to HMC&E, that guy who had a goal of being pissed on at college should move to Blighty and buy a car, the effects are much the same minus the hardon.

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$9-$10 a gallon--why do you Brits punish yourselves so? Sorry, but taxes that high on petrol sounds really masochistic...Now I'm curious, exactly what benefits do YOU get from such high gas taxes, Mack? How can that much money possibly be returned to the drivers or citizens in form of benefits--I don't believe it can...

#30 10-28-2005, 08:57 PM

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It's just that when the price of a barrel of crude oil is the most expensive it's ever been, and the price of a consumer gallon of gas is the most expensive it's ever been

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Not true. Adjusted for inflation, the average price of a gallon of gas in 1981 was $3.11. It's peak in 2005 was $2.84.
http://www.gravmag.com/oil.html#highcost

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Not to mention that the economy isn't too hot.

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Not true. The economy grew at 3.8% in the 3rd quarter. Average growth since 1971 has been about 3.3%.
http://apnews.myway.com/article/20051028/D8DH2AVG8.html