Gas prices in U.S. to hit $4.00 by April!

[Huskerboy]

Probably not. At higher elevations the gasoline sold has a lower octane. In order to get an optimal mix for combustion, the gasoline has to be lower octane to compensate for the lower amount of oxygen in the air.

I did not know that! Hmmmmm... guess I learned something today! Wonder how they'll blend ethanol for higher elevations? I think it burns pretty hot...?

 

[unclaimedblessing]

The final question on a Jeopardy episode this week was "Which country does the USA import the most oil from?".
The answer was "Canada", numbers 2 and 3 were Saudi Arabia and Mexico (those 2 fluctuate each year).
The Saudis are OPEC members and don't have total control over the barrel price, but Canada and Mexico belong to NAFTA. I thought NAFTA members sold to each other at preferential prices like the EU members.
When you combine that info with the fact that the USA is still a major oil producer, it seems to me the real culprits are the big oil corporations who are making unprecedented profits at the expense of their own citizens.
The rest is a smoke and mirror show blaming other factors while the fat cats get even fatter.

 

[drhladnjak]

Sheesh, I remember when gas was less than a dollar and I haven't been driving for all that long.

Neither NAFTA nor the EU provides for special prices to member states. It's a trade agreement that mainly eliminated most tariffs and duties on goods crossing borders and created some new visa types for skilled workers. That means that goods imported from one country by another are often cheaper than before. The idea is that instead of everybody paying more in import taxes, they'll pay that money instead for goods. It's had some interesting effects such as Volkswagen manufacturing cars in Mexico for the US market or Honda manufacturing cars in Canada for the US market. It's radically industrialized the cities on the Mexican side of the US/Mexico border because you can literally make things a few miles from the border using lower labor costs in Mexico.

I'm not sure what the tariff situation between the US and say Saudi Arabia or Russia or Venezuela for oil is like, but I don't believe it's a major factor in oil prices.

The reason oil prices have spiked in the past couple years is three fold. First, global demand is up while global supply is flat. Because more people want oil, you can charge more for it. That's mainly because India and China have dramatically increased demand for oil in the past few years as their energy needs have gone up. Second, the USD has been steadily declining against most other major world currencies. Because oil is priced in dollars, the same number of now less valuable dollars buys you less oil. Third, there's been a lot of speculation in oil commodities over the past couple years. Some say there's a commodity price bubble going on right now. If the world (or even just the US) enters a recession this year, demand will drop and prices may come down quite a bit. Experts are generally forecasting oil prices of around $70-75/barrel right now, largely for this reason.

 

[Mr.BiGuy]

Aye I can tell that $4 a gallon is gonna be soon. The prices were paying now in the States is crazy for this time of year ( I think it was only a bit more expensive in the Summer but these prices in Winter?). I've done everything I could to stop using so much gasoline; I'm lucky to live in a booming city and near the downtown area so I walk around alot. Only time I drive is to get groceries and to visit family. I carpool to work.

 

[brialphatango]

it seems to me the real culprits are the big oil corporations who are making unprecedented profits at the expense of their own citizens.

Sad but soooo true. In '06 Exxon had an $11 billion dollar profit. PROFIT! Not revenue!

 

[Kulindahr]

Sad but soooo true. In '06 Exxon had an $11 billion dollar profit. PROFIT! Not revenue!

On what revenues?
The percentage is important, after all.

 

[theFallenGod]

It's posts like this that confirm in my mind why I live in a city with excellent public transportation and everything within walking distance...

I haven't owned a car for about a year and a half and I do NOT miss it.

 

[Kulindahr]

We should apply the Wal-Mart approach to buying oil. "We're willing to pay this price for oil. Don't wanna sell for that? Okay, tell you what we'll just remove out military support."

I think the Walmart approach would be to find someone to manufacture it more cheaply.
And that's actually possible: check out "anything to oil" technology online.

http://www.energyjustice.net/fuels/
http://www.edwardwillett.com/Columns/anythingtooil.htm



Of course people have proposed rather out-there uses for the technology, it works.

 

[Kulindahr]

Are there a lot of people like this in the US? Seems so ignorant to me...

Well, a lot of the military support the U.S. gives is misplaced anyway -- welfare to dictators. In such cases, this would be a good excuse to end what we should anyway.

 

[unclaimedblessing]

That $11 Billion is Exxon only the other big oil corps made out equally well.
It all came out of the pockets of the American consumers.
It might sound Communistic/Socialistic but if the Govt were to regulate profits (like an acceptable ceiling), the excess could be earmarked for monitored research to find a suitable substitute for fossil fuel energy.

 

[Kulindahr]

Do any of the dictators the US military supports have control over oil?

What nations was he referring to? Not Saudi Arabia for sure. They are happy the US military left. Can't be Iran or Iraq would be a bad joke. Venezuela likewise.

Leaves Kuwait and Canada.

Though Kuwait has been persistently exceeding their OPEC quota to curb the oil price.

I'll assume he didn't mean anything I suppose....

We "left" Saudi Arabia?
There's a few hundred troops still there for "training purposes"... didn't we start Vietnam with "advisors" and "trainers"?

Anyway, you're right -- there aren't many dictatorships we get oil from and have troops present. But I'm not so sure about military aid -- we throw weapons and money for them far and wide.

 

[Kulindahr]

That $11 Billion is Exxon only the other big oil corps made out equally well.
It all came out of the pockets of the American consumers.
It might sound Communistic/Socialistic but if the Govt were to regulate profits (like an acceptable ceiling), the excess could be earmarked for monitored research to find a suitable substitute for fossil fuel energy.

On what revenues?
The percentage is important, after all.

Anyone even look for that?

 

[unclaimedblessing]

What have the oil corps actually done to justify those kinds of profits?
It is almost obscene and immoral to rake in those kind of bucks when we don't have health care for children and the national debt is at an unprecedented high.

 

[Kulindahr]

Saudi Arabia is buying US weaponry. That's hardly aid. Ah well, mood point anyways.

Oh, but ours are the best!
Right?

11.4%. Quite modest compared to Microsoft for example.

Thanks!
Nice to see someone able to roust out some facts instead of slogans.

 

[Kulindahr]

What have the oil corps actually done to justify those kinds of profits?
It is almost obscene and immoral to rake in those kind of bucks when we don't have health care for children and the national debt is at an unprecedented high.

11.4%?
That's considered a modest return.
That's the sort of return that keeps all sorts of retirement accounts doing what they're supposed to do: growing, so people can retire safely.
I have fifty shares (yeah, a real tycoon!) of a stock that a while back posted a 17% return for a quarter. The quarterly profit was about $70 million. Is that "obscene"? Is it "immoral"?
If that company had sales on the scale the oil companies do, you'd definitely be calling it immoral!

What they've done to "justify" that profit is obtain oil, refine it, and deliver the result to customers, while operating in a straightjacket binding them to old facilities, insufficient facilities, walking a tightrope of regulation which hobbles their every move to deliver energy more safely and more cheaply to their customers.

 

[drhladnjak]

Not to add to your frustration, but that $10.400.000.000 was a quarterly profit.

Companies don't deal in morality. It's up to your government to regulate them. Somehow I don't think that'll ever happen.

Exxon Mobil (like all the major oil companies) are publicly held corporations which means their shareholders own the company and effectively reap those record profits. 52% of Exxon's shareholders are "institutional" which basically means retirement funds, pension funds and endowments (charities, universities). Not exactly wealthy fat cats for the most part. The truth is that we're all paying for and receiving these companies record profits in one way or another.

The solution is not to apply some magic cap to profits. Mexico has a nationalized oil company (Pemex) that handles extraction, transport, refining and selling of oil in that country. The price of gas is the same at all stations because there's only one place to buy it and that's owned by the government. In the past several years, oil production in Mexico has gone way down, largely because of mismanagement. Pemex has just not invested properly for the future through exploration and drilling new wells.

We need more research into alternative energy. Perhaps the solution is to tax oil extraction or the sale of end products like gasoline to fund more research. Of course, in the end, consumers are the ones who will pay for that.

 

[FunDude]

oh.. it should be $5 soon enough lmao.

I'm already paying $33 to fill my car with gas. Its not the worst, but I can't exactly afford it.

 

[unclaimedblessing]

This is probably masochistic, but correct me if I'm wrong.
Aren't "profits" what is left over after operating costs, dividends and retirement contributions etc are paid?

 

[Kulindahr]

This is probably masochistic, but correct me if I'm wrong.
Aren't "profits" what is left over after operating costs, dividends and retirement contributions etc are paid?

It's not quite that simple.
A company has costs for employees, materials, overhead; those are inflexible costs, because they come as a matter of doing business -- no choice in the matter.
Whatever comes in at the end of a year that's more than those costs is earnings. It isn't profit... yet.
Now the company (the board) has a decision: does it announce a dividend? If it does, then the dividend is a cost, because it has to be paid. It's an elective cost, if that makes sense, because they have a choice.
Profit is what's left after all costs. If they don't pay a dividend, all of the earnings are profit; if they pay a dividend, what's left after that is profit.

Got that?
Well, that's just one way to do it.

Anyway, that just points up something important: when a reporter tells you, "Consolidates Widgets had a profit of $1 billion last year", you need to know what definition he's using before that number means anything. They might be considering profit equal to earnings, regardless of dividends, or they might be using the definition I described.

Regardless, something people forget is that those profits, dividends or not -- I should say those earnings belong to the stockholders. The stockholders are people, lots of people.

We could buy some of that stock, and be some of those people.

 

[unclaimedblessing]

The fact remains the American consumer is the person being forced to contribute to those profits at a time when we can least afford it.
If we all buy Exxon stock will that offset our pump increases?