reasons why gas goes up

[billabongcr 5,000+ posts]

I hope you don't do that in all your classes. Some of that information is actually quite useful. Not to mention someones paying a lot of money for it.

ive only really cheated/signed in and walked out in algebra. might as well be astrophysics to me.

ive gotten all A's 2/3 semesters so far in tech school tho for automotive collision repair, welding, and a few other classes im takin. 3rd semester comming soon. and yes, all on my own. (kinda hard to bs that, its all practical). and potential lives at stake when i go out and work as a tech. not to mention all the liability comes back on me.

 

[faulkton 5,000+ posts]

big oil companies. they are allowed a monopoly since the early 80's. before that, they could only own 2 out of the 3 major areas of petroleum. the drilling, the refining and the selling of petroleum are the three big ones.

Im specifically talking about #1.

So the refineries can make more money selling the crude oil, that they have just bought, as crude oil? How does that work? Who buys it from them?

 

[billabongcr 5,000+ posts]

i buy all the oil i can and put it in my shed.

that way, when the oil runs out..you all will have to buy from meee!!! HAHAHAHAHAHA

 

[azimuth 5,000+ posts]

Im specifically talking about #1.
So the refineries can make more money selling the crude oil, that they have just bought, as crude oil? How does that work? Who buys it from them?

big oil doesn't buy crude oil, they pump it themselves (see # 2). i was working, so i may have missed who they sell it to. i would assume, another big oil company's refinery. it would turn into a big circle of crude oil sellers, which would, in turn, mean that less oil got refined, lowering supply and raising prices even more.

 

[Qbenjamin 10+ year member]

I'm glad we have all these people to protect the oil industry. People dont realize how rough it is out there for them.

-WTF? I guess you don't realize that they have been making record profits every since 2002. Somewhere around the $76 BILLION mark. Do some research before you post crap like this.

 

[azimuth 5,000+ posts]

I'm glad we have all these people to protect the oil industry. People dont realize how rough it is out there for them.
I guess you don't realize that they have been making record profits every since 2002. Somewhere around the $76 BILLION mark. Do some research before you post crap like this.

i think he was being sarcastic. noone's defending them from what i see.

 

[faulkton 5,000+ posts]

big oil doesn't buy crude oil, they pump it themselves (see # 2). i was working, so i may have missed who they sell it to. i would assume, another big oil company's refinery. it would turn into a big circle of crude oil sellers, which would, in turn, mean that less oil got refined, lowering supply and raising prices even more.

So large oil company A (who drills, refines and sells gas) instead of making the crude they produce into gas, sells the crude to big oil company B (who also drills, refines and sells)? Why would big oil company B buy someone else's crude when they produce their own?

 

[Rmsanger 10+ year member]

In Macro Econ you will learn a term called price elasticity of demand. Oil, you will remember is price inelastic, (at least in the US)... Meaning that as price changes the % change is demand is relatively small.

The world's oil market is basically an oliogopoly with the world's suppliers of oil being apart of OPEC. They systematically restrict/control supply ; thus have relative control over pricing on the downside.

The largest Oil companies must contractually obligate a % of oil revenue to OPEC nations. As you will notice the margins amongst the largest oil companies have remained about the same over the past decade (give or take 200 basis points or 2 %).

The driver which they cannot control is speculation and fear of future volatility. When the price of oil reaches a certain level where there appears a downward pressure on demand, the Saudis or Irainians will magically begin to start to increase production.

It's almost a game of cat and mouse.. OPEC will maximize long-run profits by maintaining slow demand growth and limiting supply. When there is a break in demand trend they will adjust supply accordingly to keep oil as the primary method of energy use. Most of these nations no this is their only poker chip against the rest of the world, without the oil they are just deserts and canyons.

 

[azimuth 5,000+ posts]

So large oil company A (who drills, refines and sells gas) instead of making the crude they produce into gas, sells the crude to big oil company B (who also drills, refines and sells)? Why would big oil company B buy someone else's crude when they produce their own?

that's where i get foggy as well. i missed over half the show. i guess it might further there monopoly. they didn't say that they made 0 money on the refined product, just that crude oil is worth more before paying for the process of refining it. company B would make money both ways. they'd just make less of an overhead profit, but they'd make profit nonetheless. mind you, this was someone with a vested interest explaining this. it makes sense, but has holes in it. i wish i could have heard the whole show.

 

[audiobahnuser18 5,000+ posts]

Heres the real reasons gas prices go up from the persons point of view

A.) our president don't do shit about it

B.) we still pay the prices and this may 15th thing is supposed to help how bout we all try and consume gas some how

C.) come out with better electric cars i heard on the news last night there is a car in the works almost looks like a lotus runs on 250,000 lithuim ion batterys like the ones in your computer there still in the works and testing.

 

[Qbenjamin 10+ year member]

I sure hope he was being sarcastic.

 

[faulkton 5,000+ posts]

that's where i get foggy as well. i missed over half the show. i guess it might further there monopoly. they didn't say that they made 0 money on the refined product, just that crude oil is worth more before paying for the process of refining it. company B would make money both ways. they'd just make less of an overhead profit, but they'd make profit nonetheless. mind you, this was someone with a vested interest explaining this. it makes sense, but has holes in it. i wish i could have heard the whole show.

What show was this?

 

[Qbenjamin 10+ year member]

Ludacris said it best:

Gas prices are way too high......

President Bush could give a **** about our broke ***.......

 

[MikeofTulsa Moderator]

Ludacris said it best:
Gas prices are way too high......

President Bush could give a **** about our broke ***.......

well if you believe ludacris is broke, then you're just as dumb as he is.

 

[Qbenjamin 10+ year member]

Now they are saying that by the middle of summer we will be at $4.00 per gallon? WTF?