Political Discourse: This is a discussion on Gas prices again within the Discussion forums, part of the extensive steroid information at MESO-Rx; $2.87.
And reading through these posts, it would seem that:
1. No one knows what "fungible" means, and why it's ...
And reading through these posts, it would seem that:
1. No one knows what "fungible" means, and why it's important.
2. No one understands supply and demand.
3. No one knows anything about China and India.
There is no collusion going on. Gas prices aren't high because of excessive markup, they're high because the market demands more crude than can be extracted and refined. The reason you see huge profits in oil companies isn't due to markup, it's due to huge volume.
You can boycott anyone you want. The commodity is fungible, meaning if you buy less from one oil company, they'll just sell their excess to another company at market price, and demand will always outstrip supply.
Which an FTC investigation released about a month ago concluded: there is no collusion or price fixing in the oil markets.
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You can boycott anyone you want. The commodity is fungible, meaning if you buy less from one oil company, they'll just sell their excess to another company at market price, and demand will always outstrip supply.
Which is exactly why all these people calling to boycott Exxon or BP or whoever have absolutely no idea what the hell they are talking about.
Gas prices aren't high because of excessive markup, they're high because the market demands more crude than can be extracted and refined. The reason you see huge profits in oil companies isn't due to markup, it's due to huge volume.
Its got to be mostly to markup. You cant tell the volume increased that much over the last 3 years.
Its got to be mostly to markup. You cant tell the volume increased that much over the last 3 years.
Net margins (profit) at the oil companies are about on par for most industrial companies in the US, at about 7.5-9.5%. Financial and pharmaceutical companies have margins in the 14-20% range. How is earning a 9% margin excessive? Its not. The cost of oil is around $74.50 per barrel today, which is up about 600% since 1998 and 200-300% since 9/11. Oil companies dont set the price of oil, they take whatever the market price is. If you understand how price setting goes for commodity products, youll understand why its not the oil companies fault.
Net margins (profit) at the oil companies are about on par for most industrial companies in the US, at about 7.5-9.5%. Financial and pharmaceutical companies have margins in the 14-20% range. How is earning a 9% margin excessive? Its not. The cost of oil is around $74.50 per barrel today, which is up about 600% since 1998 and 200-300% since 9/11. Oil companies dont set the price of oil, they take whatever the market price is. If you understand how price setting goes for commodity products, youll understand why its not the oil companies fault.
Bob, I have to disagree with you my good friend....this is 110% the fault of George W. Bush. How do I know this??? Ted Kennedy and Hillary Clinton told me so and they would never lie to me.
__________________ Show me a young Conservative and I'll show you someone with no heart. Show me an old Liberal and I'll show you someone with no brains. - Winston Churchill
Net margins (profit) at the oil companies are about on par for most industrial companies in the US, at about 7.5-9.5%. Financial and pharmaceutical companies have margins in the 14-20% range. How is earning a 9% margin excessive? Its not. The cost of oil is around $74.50 per barrel today, which is up about 600% since 1998 and 200-300% since 9/11. Oil companies dont set the price of oil, they take whatever the market price is. If you understand how price setting goes for commodity products, youll understand why its not the oil companies fault.
In theory, it's the same. While I would be might pissed off, they are more than entitled to charge double what they are. I bet people would still pay it. In some respects one "has" to pay it, but one certainly doesn't "have" to pay for gas on a 12-cyclinder truck to haul around their single self.
I'm not blaming the oil companies. Its a business. I wonder what the net profit on 1 gallon of gas was in 2000 and what it is now in 2006.
At the moment I cant find financial statement info for 2000. the oldest I can find is 2003, and for ExxonMobil their net profit was 8.7%. For 2005, it was 9.7%. Not exactly burning down the house with huge margins.
There are many factors that account for high gas prices. Taxes is one, high demand and lower supply is another. Plus volience in many regions that control a good portion of the world's oil supply doesn't help either. Also Wall Stree speculators also add as much as 1/3 to the price of oil per barrel sold on the exchange.
Oil is getting harder and harder to extract from the planet and some of the premium blend additives are adding to the cost as well.
Re: Gas prices again 
How do I know this??? Ted Kennedy and Hillary Clinton told me so and they would never lie to me.
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