It looks pretty simple to me. Gas prices were pretty stable till 2002 or so, just about the time when we went into Afghanastan and Iraq. Prices continued to rise till 08. Then when the global reccession hit and world wide demand dropped, so did prices. Now that demand in other countries has risen along with the discontent in Iran speculators have driven prices up. Speculators control 70% of oil trading. It's buisness pure and simple. Why sell your product for less than you can sell it for somewhere else. How far do you want to go back? Gas prices have continually risen over the years and will continue to. Won't matter who's president never has. Anyone remember when gas was .29 in 1955? Now it's 4.00. So who are we going to blame for the $3.71 increase over the last 56 years?
* This post was
edited 03/16/12 07:30pm by an administrator/moderator *
Lots of excellent posts on this subject. I believe that alternative fuels will eventually be the way to go. However, you just can't convert to alternative fuels (so-called electric cars, sun, solar, algae, etc.) if they don't exist or can't replace oil. The current administration is doing everything it can to suppress our domestic oil production. As a radio commentator said, when an airplane can take off on alternative fuels, maybe their time has come.
"Then when the global reccession hit and world wide demand dropped, so did prices. Now that demand in other countries has risen along with the discontent in Iran speculators have driven prices up."
So let me see if I got this right. When demand goes down, the price drops; when demand goes up, it's the speculators fault the price went up. Does that about sum up your post?
A portion of my 401-K is invested in Oil. And as long as I continue to see that as a vehicle for me to obtain a decent return on my investment (ROI), I’m going to continue to invest in oil. And I would be willing to bet that the vast majority of people posting on here have money from their future pensions or retirement funds indirectly invested in oil; whether they know it or not. So there they stand; condemning speculators; while they themselves are what they so righteously object to.
JAXFL wrote: Yes I understand and both are to high whenit comes to oil companies - Profit is any cash realized after expenditures, taxes and other pay outs. Profit margin is a ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings
So you're a democrat? Only a democrat makes statements about what other people ~should~ or ~should not~ make.
And you can have your own opinion, but you cannot have your own facts. If you research profit margin for any integrated energy company, you'll see that historically, the margins range from 6-11% regardless of price per barrel.
Feel free to research... Go back to 2008 if you like... Heck, go back 30 years if you like. ExxonMobil, BP, Shell (RDS), ConocoPhillips, Chevron.... It's all about the same.
You see, since we import about 50% of the oil we consume, these companies PAY that price per barrel out on the open market... They're generally not GETTING that price per barrel.
My guess is that you are for the profits that the oil companies are making because you owne shares or are in some part of the oil business as you are from OK. I don't need to do research I just wish I had bought stock in the oil companies back in the 70's. That way I could be shearing in the 6-11% of $000,000,000,000.00. Here is a thought from 2005 "By definition, if oil companies are showing record profits, they are pricing gas at a higher price than what could be justified simply by the increased price of oil. If they were simply passing along the increase in the price of oil, they would be making the same profits, not record profits." From 2006 -2009 Margin profits averaged the 6-11% but for 2010 they jumped to 12.48%.
Hey doom-and-gloom, I'm for the profits of ALL publicly traded companies. It's a reflection of our economy. What kind of person would not wish success unto his fellow man?
No, I would say it was a very poor article and very typical of professionals that receive their degrees from arts colleges and not from science, engineering, and business colleges.
Now a careful news consumer can pick out some of the very important points in the story. For one, the story focuses on speculation but largely ignores its own point that speculation is fueled by global demand.
The price did not fall overnight and the downturn in the economy also forced prices down, but the speculation bubble collasped. It stayed down until global demand rose, and domestic production was lowered to its current levels (and lowered some more after deepwater permits became difficult to get after BP spill).
Presently the US is encouraging foreign oil producers to increase their oil production. They may decide to do that.
If the legislator pushed for more domestic drilling, speculators would start moving to other markets in anticipation of increased supply, eventually supply increases, demand falls and so do prices.
Quote: ...BTW - Question for - "The Texan".
Sir: In what part of the *Oil Industry* are you employed?...
I haven't read what The Texan wrote but what does it matter where he works if what he says is true? More to the point if you have counterpoints, present them and let them be challenged and supported.
If all of us are going to understand a sensible energy policy at a national level we need to educate ourselves on how oil gets from the resevoir to your tank. That means we need to discuss how things work, how money initiates activities, and how we reward investment.
Our hobby, and to some a livelihood, uses a lot of energy. If we understand this well enough, we can influence those people we sent to area code 202 to keep energy at level we can afford and thrive...
Good points.
The counter points are:
There always has been risk in the futures market.
Some are riskier than others.
A potential crisis (Iran) does work to speculators favor.
Savy traders know when -and how long- to hold 'em and when to fold 'em, LOL!
If there was no profit to be made the speculators wouldn't be speculating.
One poster asked why "we" aren't in the futures market.
You can participate - but better have pockets way, way, deeper than the average Joe - and pay strict attention to the market 24-7.
I think you would agree - oil is a global market.
Sold to the highest bidder.
Will the price go down? Fluctuate, sure!
(I remember when gas was 19 cents a gallon. Never made it back.)
Apparently, you have *no* issue with the charts reflecting fuel prices over the past 6 years. (IMO - speculators did well).
Someone else said "a senator" proposed only selling fuel produced or refined in the USA - *in* the USA.
Great idea - but not going to happen.
Back to the ABC piece you take issue with -
Why isn't the Dodd-Frank bill being enforced?
Who benefits by it *not* being enforced?
~
You take issue with strange things!.
"The Texan" stated in a previous post, he was "involved in the oil industry".
That would imply some background & knowledge base some of "us" may not have! (Possibly even yourself? - or me!)
I didn't feel the need to quote his post (which you didn't read anyway) to ask a simple question!.
Don't see that it hurts to ask *how* he is involved in the oil industry. Maybe he has some inside "scoop" we can all benefit from.
He certainly can speak for himself - if he chooses to do so!.
~
* This post was
last
edited 03/16/12 01:54pm by ol Bombero-JC *
View edit history
"So let me see if I got this right. When demand goes down, the price drops; when demand goes up, it's the speculators fault the price went up. Does that about sum up your post?"
My point was when demand goes down so do the prices. The prices have gone up for what I believe are 2 reasons. 1-The high demand in China and India, 2-The threat of shipping lane closures near Iran has speculators jacking up prices. How high would they be without speculators manipulating the market? My guess is a .30-.70 drop. It's absolutely rediculous that oil on the markets goes up because of something that may or may not happen. We can pump all the oil we want and it won't change a thing untill the speculators have less control.
You "Speculate" $0.30 - $0.70. But in actuality it has no basis in fact. You seem to think if speculation was outlawed, somehow the price would remarkably go down; and China and other similar demands would be no longer be competing with you and me and willing to pay a higher market price to satisfy their demands. Fat Chance. Are Speculators responsible for high oil prices
I don’t think I have read a single post that has defined the problem or presented a workable solution to the problem…
While drilling more domestic oil may help with our dependency it certainly isn’t the magic bullet and would do nothing to control prices today and very little for the long term…
Existing wells around my home sit idle most of the year because there are few buyers for the oil they have…
Blaming the administration is as silly as it is popular… the country has always supported or suppressed some industries that’s how it has been and that is how it will be on many fronts if we want to move forward…
Companies and especially investors are not interested in putting their money in the unknown or unproven… many of the products and in fact industries we have are spin offs from government and military studies, research and development… it took and still takes a push from the government to build fuel efficient cars and someday trucks… surely the industry never took the lead in doing it on its own…
IMO the future is surely in alternative and renewable energy sources, and if we don’t move ahead on them China and other countries will leaving us behind in the process, while we sit around arguing how they are unaffordable, unreliable, and doing nothing to advance them…
It is our own ideology and our own greed that is dragging us down…
The more immediate problem though isn’t speculators… it is the lobbyist and influence peddling and a completely divided populist allowing for the do nothing leadership, that thinks its my way or no way… Leadership on both sides of the isle…
Love my mass produced, entry level, built by Lazy American Workers, Hornet
bid_time wrote: You "Speculate" $0.30 - $0.70. But in actuality it has no basis in fact. You seem to think if speculation was outlawed, somehow the price would remarkably go down; and China and other similar demands would be no longer be competing with you and me and willing to pay a higher market price to satisfy their demands. Fat Chance. Are Speculators responsible for high oil prices
Online
Offline
)
