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Title: Ben's take on oil Post by _Lee_ on May 12th, 2006, 12:05am It is earnings season, when big companies report their last quarter’s earnings to the public. Wall Street predictions are that the big oil companies are going to report larger than usual profits this quarter, as they did last quarter, and thus we can predict something else. In editorials and on Capitol Hill, there will be cries to have new taxes on the oil companies. Oil company executives will be lambasted in hearings and the witch hunt will be on. I don’t get it. Why are we angry at the oil companies? Is it because of high gas and heating oil prices ? But wait: The oil companies don’t set the world price of oil. That’s set in trading rooms in banking houses in New York and London and Hong Kong by young guys who make zillions each year. There is absolutely no evidence that the oil companies are colluding to fix prices at artificially high levels. Those prices are set, again, by traders with Ferraris, not by John D. Rockefeller, who has been dead for many years. Yes, the price rose a lot after Katrina, but that’s because producing and refining capacity fell off drastically after the storm damage and thus the traders, sensing shortage, drove up the price. The oil companies benefited from this rise in price, but there have been plenty of times when the price has plummeted and the oil companies have taken it on the chin. The oil companies do help set the price at the pump and they set it based on the world price–which, again, they do not set-- to replace the oil they use up. That is a standard way of setting prices and not at all a conspiracy. When the world price of oil falls, pump prices fall too and they have fallen dramatically since Katrina. Are the oil companies making obscene profits? No, as a general rule they have profits far lower than bankers or pharmaceutical companies, and even below the average of large companies. And anyway, profit is not a dirty word. This a free market country that is supposed to like profits. The oil companies’ income goes to search for more oil, to refine it, to get it to market, and to pay its stockholders, overwhelmingly small investors and pension funds, a dividend. Is it bad to pay a dividend to a widow? And what about this: when I buy gasoline that has to be brought from Nigeria or Libya or Indonesia at great risk, refined, had huge taxes on it, and then brought to my gas station, it costs less per ounce than a lot of the bottled waters at my local grocery store. Why doesn’t anyone mention that? How about oil executive pay? Is it criminally high? Well, it’s a lot more than mine. But it’s a joke compared with wall Street pay and Hollywood pay, and what the heck does any movie star do that’s even remotely as valuable as powering this whole nation and keeping the wheels of the nation moving? I have the sneaking suspicion that this hatred of the oil companies is largely for the reason that teenagers hate their parents: because they are so dependent on them, they respond with anger. But Senators are not supposed to be teenagers and neither are newspapers. Let’s get smart. The oil companies are not our moms and dads. They’re in business to make money. But they do it fair and square, and without them, we would be in very bad shape. Let’s keep an eye on them, but let’s be darned grateful they work as well as they do. Ah men |
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Title: Re: Ben's take on oil Post by BobG on May 12th, 2006, 12:17am Quote:
I've mentioned it before. Many times. I get a kick out of those people that piss and moan it costs so much to fill the gas tank of their Excursion but never hesitate to stop at every other 7-11 to get a 'fashionable' designer bottle of water at $8.50 a gallon while talking on their $400 cell phone. |
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Title: Re: Ben's take on oil Post by Ree on May 12th, 2006, 12:22am so true Bob G... I thought of that today as I stopped for my 2.00 cup of coffee that I have EVERYDAY sometimes twice.... I may have to give that up.....so I can GAS UP! love to you night Ree |
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Title: Re: Ben's take on oil Post by floridian on May 12th, 2006, 12:22am Yeah, I bet Ben also drew that logo for the car dealers - the one with two hands shaking and text that says something about integrity. The recent 'electricity crisis' in the western US cost consumers billions, and was largely a creation of market manipulation and fraud. from tapes made by Enron energy traders: Quote:
Of course, the oil companies wouldn't do that, would they?? After all, there is plenty of competition - sure there were lots of mergers, but we've still got 5 oil companies left of the 25 that we had a few decades ago. Ben must be right. Free market, free market. Move along, nothing to see. |
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Title: Re: Ben's take on oil Post by nani on May 12th, 2006, 12:29am Who's Ben? |
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Title: Re: Ben's take on oil Post by BobG on May 12th, 2006, 12:58am Quote:
Yep. I work for a southern California power company with the responsibility of moving bulk energy around the western U.S. Mostly into California. During the energy "shortage" we could watch our metering and almost count the $billions flowing across the grid but no power moving. By law the power companies could not (and can not now) make more than 16 percent profit. At best the power companies have never made more than 12 percent. The people of Calif. brought it on themselves. They begged to be screwed. They passed laws to be screwed. They wanted de-regulation. Well, they got it. Dumb fuckers. |
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Title: Re: Ben's take on oil Post by _Lee_ on May 12th, 2006, 1:41am on 05/12/06 at 00:29:27, nani wrote:
Ben Stein, actor, author, comedian & economist. |
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Title: Re: Ben's take on oil Post by BobG on May 12th, 2006, 1:50am Wasn't Ben also a speech writer for one of the former presidents? Carter? Daddy Bush? Ronnie R? |
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Title: Re: Ben's take on oil Post by _Lee_ on May 12th, 2006, 2:08am on 05/12/06 at 01:50:33, BobG wrote:
Yes, I think it was Reagan. |
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Title: Re: Ben's take on oil Post by superhawk2300 on May 12th, 2006, 7:08am Well he's wrong for a few reasons. 1. The oil companies do not set the price of oil, so he is correct here, but they do set the price of GAS. To make it worse, for some reason, they are able to confer with competing companies to set the price of gas. In any other industry this would be price fixing and 100% illegal. 2. Most companies share the same product, from the same pipeline. In Milwaukee Amaco/BP is the only compnay to have their own pipeline - ALL the rest of the oil companies share one pipeline and tank farm. So why does gas prices change from one station to another just a few blocks away when it is the same exact product, from the same exact place? See #1 3. The government finds way to give the oil company our tax money. I used to work for a very large oil company, so I have some inside point of view. An example of diverted tax funds is this: when we converted a gas station to a certain fuel type the government picked up "part" of the tab for the conversion, because it fit in some clean air bill, so the kick back seemed to make sense. EXCEPT that the governemnt gave us 100-200 times the cost of the retro-fits, so foreachstation we did we made 5 figure profits for nothing. 1000's of stations = millions of your tax money slipped to an special interest group. |
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Title: Re: Ben's take on oil Post by john_d on May 12th, 2006, 7:59am No, the oil companies don't control the price of oil. It's about supply and demand. But they DO control the amount that is refined so they do control the supply. By having that control, they have the power to limit supply and drive up prices. |
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Title: Re: Ben's take on oil Post by FramCire on May 12th, 2006, 8:13am Although it was mentioned before, the fact that gas companies in this country are allowed all charge the same price is illegal (at least in every other market). They basically are a monopoly in the fact that there is no competition when EVERY gas station in a general area charges the EXACT same amount. Please don't give me the supply and demand nonsense. When I first got my lic it wasn't like this but now every station has the exact same price which doesn't seem to happen in other markets. While the base price may be the same for each station, operating expenses are different which makes the "well they all pay the same for it" argument also rediculous. Finally, people are outraged because gas companies raise prices when tragedy hits just in case the price goes up and then bring the price back down (noit usually all the way either) when the price doesn't go up for them. Here the courts found gas stations guilty of jacking up the prices around 9/11 due to panic when there was no need and stations had to pay a SMALL price. I guess when profits are made spacifically due to tragedy and at the expense of the working class, people don't like it. Personally, I think they have every right to make a profit but their business practices should be illegal but at the least are immoral. |
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Title: Re: Ben's take on oil Post by john_d on May 12th, 2006, 8:42am on 05/12/06 at 08:13:02, FramCire wrote:
Nonsense? No, I don't think so- it's the way the free market works. It was not an excuse for them but an explanation as to how they could manip prices. If they were to manipulate it some other way, they would get busted, they are not stupid. |
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Title: Re: Ben's take on oil Post by pattik on May 12th, 2006, 8:53am I heard recently on NPR, that 40% of our nation's oil usage goes for the production and transportation of food (pesticides, fertilizer and transport)--a great deal more than we use for personal and other business transport--food for thought. Are we willing to give up our cheap (and less healthy food)? Also, the vast majority of world oil comes from the Arab world, and they can and do set prices for themselves. Here are some pics of how they enjoy their oil profits in Dubai--winter in the hot desert. ;;D exterior shot: http://i3.photobucket.com/albums/y71/northcolor/Dubai_winter.jpg interior: http://i3.photobucket.com/albums/y71/northcolor/Dubai4.jpg |
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Title: Re: Ben's take on oil Post by superhawk2300 on May 12th, 2006, 8:57am on 05/12/06 at 08:42:14, john_d wrote:
Very nieve. The oil companies own gas station companies. Gas stations get the price they are charging for gas from corporate offices, who do "gas surveys" which is simply calling the compitition and together deciding what they are going to charge, based on what they think the local area is willing to pay. It has NOTHING to do with supply and demand at this point. Earlier on supply and demand effected the cost of the crude, but at this level it is price fixing, period. If Bill Gates charged different prices for software based on area and in conjunction with Apple and Linux thre would be charges. A couple mom-and-pop gas stations raise prices during hard times and it is "gouging" the entire mega-trillion dollar industry does it to make RECORD profits and it is "supply and demand". Utter BS. |
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Title: Re: Ben's take on oil Post by Bob P on May 12th, 2006, 10:01am If you don't like their profits, don't give them your money. That is where their profits come from afterall. Walk Ride a bike Use public transportation Get 50 mpg with a hybrid Get 50 mpg with a motorcycle Get 100mpg with a scooter (ever see the pictures of Siagon with the streets crammed with Honda 50's) Face it, were just a bunch of lazy 'Mericans who won't give up our SUV's |
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Title: Re: Ben's take on oil Post by Tom K on May 12th, 2006, 10:30am Want to lower gas prices? Let the companies build newer and more refineries. The last refinery was build about 15 years ago. Technology has changed a great deal in that time. With the enviromental groups constantly taking the companies to court to stop construction, how is old equipment supposed to keep up with demand? Every year we hear about a refinery going off line because of a major breakdown. Get some new efficient refineries online, by using some of their profits. If you run an old factory and can't fix it up because someone says that you can't, why wouldn't you pocket the money? The whole reason Enron was able to do what they did with the power in California was because the enviromental groups wouldn't let California build new power plants. The feeling of guilt in this country has given too much power to special interest groups and when we have to pay more for products, we attack the manufacture, not the people resonsible, the special interests. If I have to pay $2.00 more per gallon of gas because of some 1 Eyed Flipping Spyder Fish, well guess what...you aren't long for the world, Fishy! Oh yeah, but I'm just an Evil Republican... |
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Title: Re: Ben's take on oil Post by Bob P on May 12th, 2006, 10:57am Quote:
LOL, here it's the Red Legged Frog and the Banded Dune Snail not to mention paying a Chumash tribal member to sit by the construction site in case we dig up an arrowhead. |
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Title: Re: Ben's take on oil Post by Paul98 on May 12th, 2006, 11:14am really think supply and demand is bulleshit? think again. Remember the early 70's? The Middle East turned off the tap and what happened; the gas prices went through the roof. Today it isn't the tap being turned off it is the bottlenecks in the system that limit the supply; and the large increase in demand in crude. It is also speculation. You have Vensuala's El-Presidente threatening to cut supply to the US, the turbin top in Iran making threats almost daily. This drives up the prices of unrefined crude. Add the above with the tree huggers in the US demanding no new drilling for oil, EPA mandates that make distribution of gas a nightmare because each section of the country has it's own blend of gas, CONGRESS that mandated the use of MBTE then turned around and mandated it be taken out because it "polluted" and said ETOH has to be used and there was not enough production capability in the US to cover the demand of ETOH so now we import it with large tarrifs added. 1) Congress has stifiled new exploration because of the tree huggers 2) New refineries have not been put on line because the EPA keeps changing the rules and the oil companys don't want to invest the billions in a new refinery only to have to reinvest billions more to retrofit it a year or two later. 3) ~33% of the cost of each gallon of gas goes to the government. Fed. state and local. See any incentive there to lower the price/gal? 4) The Fed. Gov. allowed the mergers of the larger oil companys. (This goes way back) This drove the smaller independant companys out of buisness. Finding new, low yeild wells was not profitable for the larger companys and the small independants were gone. This put the eggs all in one basket so to speak and when there is trouble where the bulk of the oil comes from there is no back-up to draw upon. Hence prices rise. I'd love to see the government knock the bullshit off and do something meaningfull for long range independance. Allow punching holes in the permafrost up north, fund research into "harvesting" the methane hydrate in the continental shelves, bring new nuclear plants on line and keep their fucking nose out of micromanageing buisness. Stop pandering to nut groups that are opposed to everything. Stop taking "favors" from large companies in return for favorable laws and above all keep their fucking hands out of my pockets. OK, rant-off. BTW/ I like Ben Stein. Also, Bob P. makes a good point. Drive less! I have managed to cut driving ~20% Shopping is every other week and no trips to the store because I forgot something. I drive slower too. So far I have shaved off $100/mo. in gas costs. It's 100 less of my money the oil companies and Gov. get. ;;D -P. |
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Title: Re: Ben's take on oil Post by MJ on May 12th, 2006, 12:52pm Some thoughts. The oil biz is one where monopolies actually seem to work to keep a lid on prices. Refining for the most part has been heavily modernized allready in an ongoing process and capacity is continually increasing with existing plants. The governments, state and federal bring in more money from oil than all the oil companies combined. Small gas station operators make only a few pennies on every gallon of gas sold. In turn they can sell soda pop with a 4 cent cup of pop and ice for 1.89 and a 3 cent coffee for 2.00 and water in a bottle for 10.00 plus a gallon. I think congress means well, because this is one area that actually affects their pockets as well. Pollution and reliance controls are good but they should stay out of the gasoline business operations. Costs in a gallon of gas, 55% crude oil, 22% refining, federal taxes 19%, distribution and marketing 4%. Add other taxes state to state and this is the variation in pricing. I cant even count how much money would be made if we could get 2 penney from every gallon of gas sold in the USA alone. (1 week ago) Crude oil price since december up only 21%, Gasoline is up 37% hmmm A viewpoint http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/15/8376854/index.htm |
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Title: Re: Ben's take on oil Post by john_d on May 12th, 2006, 8:48pm on 05/12/06 at 08:57:48, superhawk2300 wrote:
Yeah, you're right, it's something congress can easily point a finger at like price gouging. How nieve of me to suggest supply and demand played a part in prices. |
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Title: Re: Ben's take on oil Post by BobG on May 12th, 2006, 9:07pm I like the high gas prices. It’s forcing people to rethink their mode of transportation. Get rid of the huge gas guzzling SUV and get a Corolla. Sell the F350 and put their fat ass on a bicycle. Why is this good? Because it get people to stop all the bitchin’ and pissin’ and moanin’ about high gas prices. They’ll have a new target. The prices of Corollas and bicycles will skyrocket and folks will scream for investigation of insane profits at Toyota and Schwin. The monster Expeditions and Sequoias will sit unsold at the car dealers. Dealers will be cutting the hell outa prices just to get rid of the SUVs. That’s good. For me. The Sequoias are now about $12,000 below window sticker and still going down. Next January my wife gets a new Sequoia, cheap. Keep the gas prices up. It’s like money in my pocket. 8) |
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Title: Re: Ben's take on oil Post by Tom K on May 12th, 2006, 9:38pm on 05/12/06 at 21:07:11, BobG wrote:
Waiting on the same thing myself...that shiny new Dodge Magnum with the Hemi is going to be sweet in my garage!!! 8) |
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Title: Re: Ben's take on oil Post by _Lee_ on May 12th, 2006, 10:20pm Just be sure they run on sugar cane, The Iranians could sink one tanker in the straits and cut off 40% of our oil supply. |
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Title: Re: Ben's take on oil Post by Paul98 on May 12th, 2006, 10:30pm The Iranians could sink one tanker in the straits and cut off 40% of our oil supply. Correct Lee, Not just the Iranians either. Bop a tanker or two and a few refineries and the US would be in deep shit. It would make the 70's oil embargo seem like cake walk. -P. |
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Title: Re: Ben's take on oil Post by _Lee_ on May 12th, 2006, 11:12pm on 05/12/06 at 08:57:48, superhawk2300 wrote:
I see very few Oil Co. owned gas stations where I live, I know in larger cities like Houston there is a larger percentage. That may be because the refinery is right down the street? Here In Tulsa, Sun's refinery was downgraded to produce fuel oil and motor oil. Sinclair sells most of their gas production to convenience stores, unbranded. Phillips / Conoco Don't exist. Except in af few spots here and there. |
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Title: Re: Ben's take on oil Post by Charlie on May 14th, 2006, 2:26pm Ben Stein: Well-known Republican conservative apologist, comedian and middlin' actor. It's no fun building refineries because if the free market did so, it just might result in lower prices. Can't have that. Restrictions on building refineries? Oil buys its way around enviornmental laws all the time. If it wanted to build more refineries, it would. It doesn't Do you like the old days of free market? Try 1950s with about 90% tax rates...Perhaps the most prosperous and longed for period by Republican moralists and business. When everyone does well......everyone does.....well. America is a place where people came to live because it was the place where having to make severe choices was supposed to be kept to a minimum. With Republicans in control of all three branches of government, this mistake has been quickly corrected. We're not used to it and hopefully these greedy bashtards will pay dearly in Novemeber. Bush has turned things back (he's good at this) and now it's 1890 with the robber barons high on greed at a level not seen in nearly a century. The party that rants about big government is presiding over the greatest government expansion since WWII but not on the side of consumers and insuring that Walmart has lots of cheap labor. Charlie |
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Title: Re: Ben's take on oil Post by Tom K on May 14th, 2006, 3:38pm on 05/14/06 at 14:26:35, Charlie wrote:
Be careful, Charlie, your bias is showing. Intersting take on this, but when a group marches on the site a refinery is to be built, and gets a court order to stop the construction, is that Bush's fault? Additionally, do you really think that we are back in the 1890's? Really. I know you have first hand experience of that time, ;;D, but honestly. And what are you going to do if the Republicans win in November? If you noticed during the last few election cycles, the states that have a large city, California, New York, People's Republic of Illinois, etc, are the only one's who go Democrat. Could this be because they have a larger population of minorities that historically vote Democrat? You are correct about one thing, the November elections are going to be interesting... |
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Title: Re: Ben's take on oil Post by floridian on May 14th, 2006, 5:18pm Whenever energy profits go up, the environmentalists are scape-goated. When Enron was reaming California, the conservatives were tut-tutting and saying "this is what you get when the environmentalists take over" - as if corporations were helpless, as if the environmentalists really had taken over. Yes, we might be paying an extra fraction of a cent per kilowatt hour because of broadly supported environmental laws (Nixon, for all his faults, was a moderate environmentalist). And for that reasonable premium, we get cleaner air and less aggravation of respiratory and heart conditions. Not a bad deal, in my book. A year ago, the president offered to give decomissioned military bases to the oil companies for free to build refineries, and to streamline the permitting process and reduce environmental regulations. Their response? Not interested, a new refinery would still cost billions and would not be profitable. Quote:
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Title: Re: Ben's take on oil Post by Tom K on May 14th, 2006, 5:31pm on 05/14/06 at 17:18:17, floridian wrote:
on 05/08/06 at 22:37:50, floridian wrote:
How come, when you go back and find things on the Web, it is research and info gathering, even if it involves quoting things that happened in the past. Let someone who doesn't agree with you do it and the above happens... I suppose that someway you are going to blame Bush for the oil companies not using the bases, too... |
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Title: Re: Ben's take on oil Post by Charlie on May 14th, 2006, 6:28pm Frankly, I'm not one to be all that upset about refinery construction nor am I wild-eyed tree hugger.....but.....as we have seen in the last 5 years; let corporations slip the knot of consumer and enviornmental laws and they'll turn the Adirondacks into Lackawanna, NY or Newwark, NJ. ilding on some military bases almost makes sense so big oil decided it was the right thing to do but it didn't get caught with its pants down and told you, me, and the rest of their customers to sit on it. Democrats only in big cities: They voted for a Republican Mayor of New York City and a GOP Governor of New York State. Charlie |
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Title: Re: Ben's take on oil Post by Tom K on May 14th, 2006, 11:00pm Yes, NY did get a GOP Gov and Mayor, if you want to call Bloomberg a GOP. Mainly, and I should have been more clear, I was talking Presidential and Congress. I don't agree that oil exploration would make everything go to hell in a hand basket. The Alaska pipeline has done pretty damn well for how long it has been running. There weren't all the deaths of entire species like we were told that would happen, in fact, the caribu and elk populations have grown well beyond anyone's imagination. Anwar would cut our dependance by more than 75% IIRC. There is enough oil out there, if we would only go and get it, to keep us running for a long, long, long time. If the military base thing is true, and the oil companies don't want to utilize the free area, "Just because", than maybe some investigation should go on. On the whole, I think that everyone is a little over eager to investigate and condem. We don't run the companies and don't have first hand knowledge of what goes on in their offices. Until one of us can say for a fact one way or another why they are or are not doing something, I think we just have to deal with it. Try to project these things upon yourself and your life. Would you want someone digging into your business, just because someone didn't like the way you were doing something. I know, you and Flo are going to say, "Bring it, I have nothing to hide". Well, some people don't like the governement snooping around in their business, one way or another. Kinda like the urine test for a job. You may not do drugs, but isn't a personal violation of your privacy to have to do a test for something that you would do outside of the job? A lot of people think that way. Just trying to explain to everyone where I am coming from. I'm all about personal freedom and personal responsibility. I don't want the government in my face about anything. Just my $.02, YMMV |
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Title: Re: Ben's take on oil Post by Opus on May 14th, 2006, 11:57pm on 05/12/06 at 07:59:49, john_d wrote:
Really Oil companies don't limit supply, countries do, well the ones that belong to OPEC, which out buddy Mexico and Saudi Arabia are a part of. The high oil prices cause more oil to be discovered, and the price then to push down again. Unfortunately the world keeps using more oil so OPEC can keep the prices up artificially. Opus/Paul |
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Title: Re: Ben's take on oil Post by imnotbub on May 15th, 2006, 10:12am I don't follow the supply and demand thing with the oil. In the 70's, it wasn't there, so when some came in, more people wanted it then they could service. Price up, pumps empty, long lines. I have yet to see a station run out of gas, or there be a long line waiting for gas at the pump. Seems like the supply is fine to me. Speculation in oil futures is out of control, yes. But, the oil companies used to make 22 cents a gallon profit. Now they make 1 dollar a gallon, hence the record profits. Cut it back down to 22 cents, and the proce of gas is back to 2 dollars a gallon, not great, but it beats the hell out of $2.75. The only good things that can come from this is the advancement of research in alternative fuel sources (not likely) and the lowering of prices of vehicles that use high amounts af fuel. (more likely) Magnum with a Hemi, come to my house, I'll wash you every day! ;;D |
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Title: Re: Ben's take on oil Post by floridian on May 15th, 2006, 12:04pm on 05/14/06 at 17:31:10, Tom K wrote:
Why do you assume that? My point is that he offered them several sweet incentives to build new refineries, and they weren't interested. It has nothing to do with Bush, nothing to do with environmentalists. It is in the economic interests of the refineries to keep pushing the existing refineries, and not to build new ones. |
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Title: Re: Ben's take on oil Post by Tom K on May 15th, 2006, 12:10pm on 05/15/06 at 12:04:18, floridian wrote:
[smiley=hiya.gif] I'm sarcasm, have we met? ;;D ;;D ;;D I was trying to bring the funny, obviously it didn't work... |
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Title: Re: Ben's take on oil Post by _Lee_ on May 15th, 2006, 11:59pm on 05/15/06 at 10:12:12, imnotbub wrote:
Which part of this dream can you substantiate with real facts and figures from reliable sources?? |
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Title: Re: Ben's take on oil Post by zwibbs/Scott on May 16th, 2006, 6:28pm on May 12th, 2006, 12:29am, nani wrote:Who's Ben? Ben Stein, actor, author, comedian & economist. ----------------------------------------------------------------------------------Lee is incorrect---Ben was a writer for Nixon. |
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