you know what i find amazing my freind owns a gas station he only only makes 4.5 cents off a gallon all the rest of it is oil refiners and taxes

 

I hope that the feds don't pass a windfall tax on oil profits. There are already enough on oil as it is, and everyone knows that a windfall tax will be passed right along to the consumer. Besides, it does nothing to help the price of gas at the pump.

I really doubt that we will se $4 a gallon. It is comments like $4 gas and $100 barrel oil that drives up the price of crude.

 

How I wish ethanol & flex fuel vehicles would make it to market so much faster... If gas had to compete in the real world, then things should be a lot better

 

I think it has more to do with the following timeline:

1. The worlds oil infrastructure was being under utilized in the 1990’s and oil was at record low levels and OPEC didn’t want to invest in improving/expanding the infrastructure fearing it would drive crude oil price even lower.

2. dot.com bust of 2000 and 9/11 terror attacks in 2001 led to a recession in 2002 that caused the fed to cut interest rates to allow consumers and corps. to reconsolidate debt.

3. The cutting of interest rates to historical low levels flooded the economy with liquidity that inadvertently led to a historical housing boom

4. Consumers have seen their home values skyrocket over the last 5 years (doubling and tripling in value)

5. 2/3rds of the American economy is based on the consumer and the American economy is the strongest and largest economy in the world. We (as Americans) should all pat ourselves on the back for keeping the global economy humming by going on a 4 year spending spree.

6. Consumers have refinanced and/or got home equity loans in record numbers and took some of that money out and spent it.

7. Money that poured into the economy from the booming housing market allowed consumers (feeling rich as their home appreciates rapidly) to buy record amount of products that were made outside the USA.

8. Those foreign economies who make those items or services that US consumers have purchased have seen their own economies improve thanks to the ‘happy-to-spend’ US consumer.

9.Those foreign economies are consuming more energy and resources in order meet demand.

10. That increased demand on the worlds commodity markets have caused prices to skyrocket.

11. The global oil infrastructure has not been vastly improved in decades and is not able to effectively supply a growing US economy, a rebounding Japanese economy along with a booming Chinese and Indian economies.

12. This lack of sufficient global oil infrastructure thats being hindered by the anti-free-market OPEC oil cartel along with booming foreign economies is causing oil to skyrocket.

13. Add more hurricanes and mideast tensions in 2006 to the mix and you have a recipe for $4.00 a gallon gasoline.



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As a side note, if consumer retail spending starts to take a dump in 2006/07 as consumers start to watch their homes begin to decrease in value and feel poorer in conjuction with a burst of inflation caused by $4 Gasoline then it could lead to a recession. This drop in consumption could cause the US as well as the global economy to use less oil and other commodites and this decrease in demand will eventually lead to lower prices. The fed would most likely bring relief to an economic recession or slowdown by starting a new cycle of cutting interest rates to flood the economy with liquidity to allow people to reconsolidate debt................ and the cycle continues but slightly different next time around...

 

I think they're looking for any excuse they can find.....

 

johnsocal, I agree with what you said, though I still think there is a LOT of fear priced into oil right now. I know that oil consumption from other countries has gone up, but I think there is a lot more fear in oil right now then there is demand, or anything else. We have heard $4 gas, $70 oil, lower inventories for summer, higher summer as prices, MTBE being replaced, and oil companies dealing with suits over MTBE and clean up of the product. I have heard all this in the last week or two. I think oil has climb $5 in the last week.

Just my .02 worth.

 

I agree, there's a lot of fear and speculation in the oil market right now.

Im not saying my 'timeline' is completely accurate (it isn't) since there are alot of other factors as well, but it's more of a rough guideline of how we got in the situation we are now in.

 

It will happen...gas has creeped new $3/gal for premium here, it's been steadily rising for the last several weeks...all we need is a disaster like the last hurricane season to jack it up another dollar or so...

 

#1 Record Corporate Profites in History - ExxonMobil in 2005 $36B
#2 Record Corporate Profites in History - ExxonMobil in 2004 $25B

After Katrina, ExxonMobil was asking for US Govt aid because they insisted the hurricane was going to kill profits for the year and that they were taking a hit not raising consumer prices even higher. Then they have their highest profit year in history. They werent hurting at all.

They are a corporation, which means their #1 goal is profit, and they are doing a really good job at it.

Then theres this new article, with finger pointing back and forth. The industry is (as was said) trying to put all the blame on ethanol. Its impressive how good they are at it. Makes you want to go see the movie "Thank you for Smoking" just for humor value at how good these marketing guys are.

And now theres the talk of military in Iran...

Next thing you know we're going to "liberate" Canada.

 

You not suppose to tell them were coming, it was a secret.

 

I believe that most of Exxons profits come from outside the USA.

Rightfully or wrongfully we have no problem seeing computer, tech, or auto companies make HUGE profits but we all hate seeing energy companies make big profits.

For some reason we view energy profits as 'sticking it to us' but when the auto industry was making a killing on mega-profitable SUV's and trucks we were cool with that.

I guess as long as we get something for the money (car, computer, and etc) we dont mind, but energy expenses just seem to take our money and that empty feeling just pisses us off.

 

I don't know. That's like comparing apples to oranges. Nobody is really "making" (I use it loosely as nobody is making us buy gas either, but we are dependent on it) you buy an expensive vehicle so it doesn't affect you, unless you choose to go out and buy it.
I can see the comparison you are trying to make, but it is just a little bit skewed.

 

That's the whole problem. At the end of the day, most of us (Except those who run or ride bicycles to work)... HAVE to buy oil. The Govt should have looked into this LONG AGO, it's almost to late now.

 

Here's the reason (IMHO) why the gas prices **** us all off and SUV/Electronics prices don't

#1) Cars/Electronics are constantly evolving. There is all sorts of research and development going on that costs a ton of money. For years the oil industry did nothing for fear of driving down prices.

#2) There is a cartel dropping supply to artificially inflate prices.

#3) When was the last time you saw and Intel or a Tahoe go up in price due to "possible supply problems in the future"

#4) We are not forced to purchase an SUV, computer, tv, etc. Those are convienice item that we choose to purchase. Oil is something we don't have a choice in buying. Our lives basically come to a stop without it. Ignorance on our part for not having a solution before this became a problem, but it's easy to quarter back on Monday.

Until there is a reason that makes sense behind the hikes and not theoretical bs that the oil companies are spewing at us, I think we have the right to be a little peeved, especially when they post a $36 billion dollar PROFIT.

AT&T had full control over telecommunications years ago and they got split, and with all the oil companies merging and cooperating to raise prices, why hasn't anyone stepped in? Without competition, there is nothing to keep prices in check.

 

Stations actually make more money in their "store" than in fuel, just like how movie theatres make more money at the concession stands than selling you the movie ticket.

Since most states (and I believe the Feds as well) charge a fixed amount per gallon instead of a percentage of price, the higher fuel prices go, ironically the cheaper the taxes on it are.

This reminds me of a raging debate we had here a couple of years ago about the "evil" of taxes versus "free market" of profit money going to companies. We now have a situation where skyrocketing fuel prices has actually made the tax rate alot cheaper (as a percentage) on a gallon of fuel, while Exxon has become perhaps the richest company in history.

If I recall, some of the same people defended rising fuel prices after hurricane Katrina, and oil companies trying to get government help.... then came the oil industry's profit reports for that period.

What was it PT Barnum once said?