can someone PLEASE explain the gas price logic to me, without bashing bush/OPEC

[BB1]

Wait... there's porn on the internet? 

[Sledge57]

I can explain it. Did you quit buying gas because the price went up?
No? There ya go. Supply and demand............................................

STOP buying gas? How exactly do you do that without becoming a bum, hermit or mountain man? Maybe I'll just stop working altogether and live off you guys.

I never said stop buying gas, it ain't gonna happen and I ain't gonna quit. The point is the price is going up and you, me and everyone here can't do a thing about it. We can come up with boycott plans, threaten to vote "insert name" out of office etc... In the end we're gonna just pay the price and complain about it.........

Buy gas in Europe if you want to see high prices.

I hate it too but the only other solution is breaking out my Schwinn............................

[MOPARHOUND!]

(Don't know why I post in off topic.............but, here goes..... )

They just built an ethanol (corn, sorghum) plant in Garnett, KS, bringing the number of plants in Kansas to 7.  Plant #8 at Phillipburg, KS has broken ground.  http://www.ksgrains.com/ethanol/kseth.html

When gas goes over roughly $1.59 a gallon, ethanol becomes a profitable alternative.  What the owners of plants have to risk is the price of gas.  If it stays above $1.59, then they will be in the money, if the price goes back down, they will be out a ton of $$$.  Capitalism at work.

The global economy is changing the oil market in a way not seen before.  Have watched diesel fuel in trucking go up and down over the years.  But for it to go up and stay up this long is unprecented.  China and India have buying power and economies that are growing by leaps and bounds.  China's dam projects recently wreaked havoc in the world cement and steel markets.

Speculation is another factor.  Read an article where a billionaire investor was convinced of "peak oil" being close (that is, when we have used up 1/2 of oil resources on the planet, and begin on the second 1/2 which will continue to dwindle as this term defines it) and had mega $$$ invested in oil.

Isn't Microsoft's profit margin around 25%, but oil around 10% now??  

[PocketThunder]

Wait... there's porn on the internet? 

Yes but you gotta pay for it....   

[bull]

I can explain it. Did you quit buying gas because the price went up?
No? There ya go. Supply and demand............................................

STOP buying gas? How exactly do you do that without becoming a bum, hermit or mountain man? Maybe I'll just stop working altogether and live off you guys.

I never said stop buying gas, it ain't gonna happen and I ain't gonna quit. The point is the price is going up and you, me and everyone here can't do a thing about it. We can come up with boycott plans, threaten to vote "insert name" out of office etc... In the end we're gonna just pay the price and complain about it.........

Buy gas in Europe if you want to see high prices.

I hate it too but the only other solution is breaking out my Schwinn............................

You said 'quit' and that and 'stop' mean pretty much the same thing. And for what it's worth, I don't think the price of gas in Europe is going to make anyone here happy to pay $3/gal. That's kind of like telling the judge you should be set free for stealing because some other guy murdered.

I don't have the time during my 15 minute breaks at work to take on all of you at once. Wait until Tuesday night and I dazzle you all with my knee-deep BS (if the thread isn't locked by then).

[bull]

Uh... E85 is subsidized by the governmet at something like $0.60 per gallon to make the price competitive. Where do you suppose they get the money?

Wondering how many people actually bother to research anything before pulling "facts" out of their rear... 

First off, I don't think this is necessary.

Why not? Read the whole thread and notice how many people reference where they got the information or have a shred of evidence to back up their argument. We go through this so many times and it is so predicatble that I could script the entire conversation beforehand so forgive me for pointing it out. As an educator it grates on my nerves when people are too lazy to check the facts - the very facts that they will argue to the death over just because someone else told them. It also doesn't take a whole lot of effort to verify/refute someone else's position yet even that is obviously too much to expect. I don't care if someone disagrees with me because I may actually have based my opinions on incorrect information at some point. However, I will look it up and modify my thinking based on newer, better information. Is that too much to expect from adults? Again I must point out the difference between fact and opinion. You can believe there is a gasoline conspiracy and I can believe there are aliens reading this site but neither can be proven. The firing order of a 440, however, is irrefutable. See the difference?

That's fine but as I mentioned in the paragraph below that the 'facts' that are quoted is the regurgitated rhetoric of big oil. Yes, there are plenty of 'facts' to site because it has been accepted as fact for a century. I'm not questioning you I'm questioning the validity of the information you are siting. What I do have a problem with in your first two opening sentences is being talked down to and basically considered ignorant just because I (and in some cases we) don't accept the 'facts' you site. Maybe you aren't meaning to come across that way but it seems so. Just because conventional wisdom says it's perfectly acceptable to have $3/gal. gas and billions of dollars in profits by oil companies does not mean I have to accept it. 1,000 years ago everyone probably thought the world was flat too.

[dodge freak]

What do you mean the world isn't flat ?

[Troy]

Which of my sources is tainted? I'll find another. Believe me, I usually have 3 or 4 but I'll link to the one that describes things the clearest. Pinpoint examples please. Is it rhetoric if it can be defined by standard scientific principles? I do research for a living and I am a realist when it comes to my view of the world. I am certainly open to looking at alternative points of view but I'm not gonna dig to the 12,854th page of Google links to find the one that doesn't agree with the rest and base all of my opinions on that. 1,000 years ago a guy wouldn't be able to get the latest baseball scores and highlight videos on a satellite phone in outer Mongolia. It's a bit harder to fool (most) folks these days - although I'm beginning to doubt that assumption.

Troy

[dodge freak]

I just like the price to come back down to $2 or so or my pay check to go up 20% to make up for it.

As for price caps, did you know good old Wal-Mart now has pay caps for all of it workers in it stores ? Some people are getting pay cuts cause their wages are above the cap. If Wal-Mart can have caps on what it pays their workers what is so wrong or crazy about capping the price of gasoline ? Fair is fair and yes you don't have to work for Wal-Mart and you don't have to buy gasoline either. People have family's to take care of they can't just quit just like we can't stop buying gas.

Well good news oil went down again today, its now around $68 after hitting around $77 last week, maybe gas will go down sometime this week, why does it seems like it goes up faster than it goes down? Gas here by me is $2.98-$3.09 for the 87 stuff, last week it was $3.15 everywhere.

[Sledge57]

.................. Just because conventional wisdom says it's perfectly acceptable to have $3/gal. gas and billions of dollars in profits by oil companies does not mean I have to accept it. 1,000 years ago everyone probably thought the world was flat too.

Ok you don't have to accept it, what are you gonna do instead, E-85?

As far as quit and stop, yep that's what I said. I didn't say you should or I would though. It is however the most surefire way to drive down the price, it just ain't gonna happen. Politicians won't fix it no matter how much lip service they give.

So now that people are gettin hard when they see gas for $2.89 thinking they're getting a deal, it's walk, ride a bike, steal gas or pay the price, cause we ain't seeing $2.00 again.....................................

[RD]

Which of my sources is tainted? I'll find another. Believe me, I usually have 3 or 4 but I'll link to the one that describes things the clearest. Pinpoint examples please. Is it rhetoric if it can be defined by standard scientific principles? I do research for a living and I am a realist when it comes to my view of the world. I am certainly open to looking at alternative points of view but I'm not gonna dig to the 12,854th page of Google links to find the one that doesn't agree with the rest and base all of my opinions on that. 1,000 years ago a guy wouldn't be able to get the latest baseball scores and highlight videos on a satellite phone in outer Mongolia. It's a bit harder to fool (most) folks these days - although I'm beginning to doubt that assumption.

Troy

that may be all fine and good, but your condescension and lack of tact makes me really not want to read your posts.  It is great to feel passionately about something as long as you can disseminate that passion in a way in which other people would enjoy reading what you have to say.  I bite my lip reading your posts due to their negativity.  I have to be reminded of the same thing too.  I think piggy stated that I was a "condescending know-it-all" when I would state comments like you are stating.  And well, he was right.

[RD]

most recent profits based on income statements:

exxon/mobil - 157,678,000,000 dollars 42.5% of total revenue
BP - 57,174,000,000 dollars  23.2% of total revenue
conocophillips - 16,200,000,000 dollars 33.4% of total revenue

coca-cola - 14,909,000,000 dollars
pepsi-cola - 5,632,000,000 dollars

mcdonalds - 1,775,300,000 dollars
burger king - 745,000,000 dollars
wendy's - 924,919,000 dollars

tyson food's - 149,000,000 dollars
National Corn Grower's Association (http://www.author-works.com/media/media-16403.pdf) - 1,460,448 dollars [total assets]


MONEY IS POWER, and somehow I do not believe that the corn grower's have as much push and pull as the oil companies do.

    Please post profit as a percentage of total revenue.  Without that info, the above numbers are meaningless.  My brother in law's software company made 65% profit last year, he must be gouging the consumer.

I found all the information on the yahoo finance site.  percentages stated above.  but, if your profit is $157,000,000,000.  THAT IS SUBSTANTIAL NO MATTER WHAT THE PERCENTAGE IS DONTCHA THINK? 

I just did the oil companies, but you can find all income statements on yahoo finance except the NCGA.

[Troy]

Which of my sources is tainted? I'll find another. Believe me, I usually have 3 or 4 but I'll link to the one that describes things the clearest. Pinpoint examples please. Is it rhetoric if it can be defined by standard scientific principles? I do research for a living and I am a realist when it comes to my view of the world. I am certainly open to looking at alternative points of view but I'm not gonna dig to the 12,854th page of Google links to find the one that doesn't agree with the rest and base all of my opinions on that. 1,000 years ago a guy wouldn't be able to get the latest baseball scores and highlight videos on a satellite phone in outer Mongolia. It's a bit harder to fool (most) folks these days - although I'm beginning to doubt that assumption.

Troy

that may be all fine and good, but your condescension and lack of tact makes me really not want to read your posts.  It is great to feel passionately about something as long as you can disseminate that passion in a way in which other people would enjoy reading what you have to say.  I bite my lip reading your posts due to their negativity.  I have to be reminded of the same thing too.  I think piggy stated that I was a "condescending know-it-all" when I would state comments like you are stating.  And well, he was right.

Yep. I have been known to be negative, cynical, sarcastic, disrespectful, condescending, and even insulting when the mood strikes. Of course, that is almost totally dependent on who I'm dealing with at the time (and it's not incredibly often in the grand scheme of things). I once heard the perfect phrase to describe it but I won't post it here in case it hurts someone's feelings (or more likely they'll take it out of context). Not much else to explain beyond that.

Troy

[dodge freak]

I know I am not right always -and I do like reading other views, sometimes-even days or weeks later-I can see their point, if not so what ?

Was told along time ago " just cause one guys a jerk does not mean you have to be a jerk too"  something to think about.

Funny how most of us have never even met each other but we "know" all about them just by reading a few post they write. Not sure but some how I think if we all were to meet  we find we might have more in common than we think we do . Lets just try to say what we think without putting a poster down ,thats all he was saying.

[Brock Samson]

man i wish this thread would just die allready! 

[dodge freak]

 

[Todd Wilson]

Troy has seemed to hit it on the head as to how the gas prices seem to work. But that is where the problem is.  Futures in the gas area is whats causing the problems.  They can increase profits just from futures prices by jacking up the price of gas thats already at the filling station.   Also  if the futures prices control the price of oil/gas   how come we have zones out there and the price of gas is one price and a different price across the street?!?! Gas is gas  and FUTURES IS FUTURES!  The zone boss's   TELL the stations what they have to charge for a gallon of gas. We cant even have a price war where several companies will try and have the lowest price to drum up business. Isnt this how Wal Mart does so well by providing us with goods at better prices then Kmart or Target can sell for?



So we throw in the supply and demand theory.

I still say this is BS as well because  the futures price is what controls the price of gas right??   So if refineries are at maximum capacity and simply cannot keep up with production then why dont we invest some of our profit and build new refineries (we cant do that the goverment wont let us excuse from oil companys).  SO why dont we take our profits and expand the existing refineries. They are grand fathered in and they should be able to add more machines to an existing refinery?!   Also  WHY has the oil companys CLOSED refineries all over instead of spending some of their profits on upgrading and redoing old plants?   

Any other business in the world has to reinvest in equipment at some point to stay in business, except for the oil companies  they can create a smaller supply and jack the price up. Most companys increase their ability to produce to make more money.   I dont think there is a shortage of oil. I think the  supply and demand theory has been created to jack up the prices.

The refineries have the best methods of transportion. We have pipelines all over the place  with controllers monitoring things and filling tanks at power plants with diesel fuel  at the punch of a button.  Our local gas companys take their trucks to a valve sticking out of the ground and fill their trucks up and go back to the stations to fill the underground tanks. That pipe is full and continuously flowing for sometims hundreds of miles with all kinds of other companys tapping into it along the way for their fuel.


SO Troy   how much  $ is added to a gallon of gas by the gas companys??  Does that show up in their reports??  We never see the wholesale price of a gallon of gas anywhere???! I would be willing to bet that amount has changed a lot over the years. I bet its went up a lot and changes all the time.

Example...

Todd Wilson Oil comnpany wants to buy a ship full of oil.   Futures price in New York today says a price. I pay the price for the ship of oil.  I break it down and the futures price comes down to 1$ a gallon. After my costs to refine the oil to a gallon of gas  is added and we say   25 cents   so now the gallon of gas is worth $1.25 a gallon.  Factor in the costs of the small gas station outfits  we'll add in another 25 cents in cost for those companys to make a profit to pay their bills.  SO now this gallon of gas costs $1.50 and thats what is charged at the pump. The company pumping out of the ground has made their $. I made my $ and the gas station has made their $. That was last week.


This week........

Some camel jockeys get pissed off and start fighting. Futures go up and my next ship of oil  will cost me $1.25 instead of 1$.    So now   after all the work involved to get it to the gas pumps like we did last week   is the gas now worth $1.75???  Yes it is..........but in the mean time   I have been laughing and scratching myself at my big wood desk while puffing a cigar and decide this week  we will charge 1$ for our costs instead of 25 cents a gallon for gas like we did last week and now gas is $2.75 a gallon at the gas station.

The week after that.......

The camel jockeys become friends and stop fighting and the futures price in new york drops and my 3rd ship of oil costs me 1$ again.   So now after I refine and the small stations get it to the gas pumps jsut like we did last week and the week before does the price of gas at the station drop 25 cents or do I scratch my CEO nutsack  and keep the price the same at the pump and now I make $1.25 profit instead of 1$ or 25cents the week before.  When in reality  my costs are still 25 cents  and the station company costs are still 25 cents. But now I am just raking it in?!


Do you see what I am saying?




Todd

[Beer]

The problem with building more refineries is no one wants them in their backyard. Its like the nuclear power issue of "build that plant somewhere else" (I am all for nuke power too).
We have plenty of oil and the oil companies are investing their profits into building the technology to get more oil. The trouble is not only refinery issues, but we know that oil is a limited commodity, and the general idea is to tolerate the higher prices and use the foreign oil first, so they run out before we do.

I am sitting on this right now, in the Chevron Tahiti field  (Goggle for info) drilling wells for a production site.




Chevron pays Transocean a day rate of over $400,000 a day for the use of the Drill ship. I would estimate daily cost for them to operate the Drill ship damn near a million bucks a day.


Article Excerpt
ChevronTexaco's Tahiti deepwater oil field -- one of the biggest in the Gulf of Mexico -- has moved a step closer to development with a production test that exceeded expectations.

The announcement on Tuesday is the latest in a series of encouraging updates on the April 2002 discovery, which still awaits a formal sanctioning decision.

The California-based major said its test on the original Green Canyon 640 discovery well indicates that it is capable of producing as much as 30,000 barrels of oil per day.

Here's an entertaining fact. Florida will not let anyone drill for oil or gas off their coast. There are plenty of finds off the coast from acoustic research vessels.  Cuba is leasing to China fields off its coast (within the limits of its exclusive economic zone). So the very oil and gas we could recover using our very strict environmental codes is going to be recovered by an unregulated oil and gas industry based in Cuba and ending up to be used in China...

Beer

[Troy]

Todd: it's already been answered elsewhere in this thread. Profit margins at most large oil companies have been hovering around the 10% mark. Most gas stations are franchises or privately owned so their books aren't always open but gasoline usually has the lowest profit margin of anything else in the store (see my example of coffee and fountain drinks earlier). Yes, everyone from end to end takes a little profit along the way. If they didn't they wouldn't be in business long.

Here's one scenario: finally people refuse to pay more than $3.00 for a gallon of gas here in the US. However, people in the UK, Germany,  and China are willing to pay $3.50. Since there is a finite limit on the amount of fuel produced daily, where do you think it will go? Didn't we just go through this with diesel last year (and even now since the price is still way up there above regular grades)? It's all well and good to blame some greedy faceless, nameless executive somewhere but in reality it's a global market and the goal of every business is to maximize profit - or face bankruptcy. Could it be that China needs all that fuel in order to produce all the junk that we import right back into this country? It's a cycle. Stop buying that stuff (but pay higher prices for US made goods) and they'll make less which will use less fuel which will decrease demand which means they won't be willing to pay a premium to import oil which, in time, will bring the levels back down to what we are willing to pay. On one hand we attack oil/energy companies for not spending more on R&D (so we can have cheaper products) yet on the other hand we expect them to do it without making any money in the first place.

I don't have all the answers or even a quick-n-easy solution but that's because it's not as simple of a problem as most people want to believe. I don't like paying so much for gas and I'm not exactly sticking up for oil companies either but I understand how the process works and, so far, none of them has done anything illegal or even beyond the scope of any other business on the planet. The point of this thread was that gas prices have dropped even at a time when some people think they should have gone up. I think I explained why but the end result is that prices did go down. Could they have already been inflated? Probably.

Personally, I'd love to see more alternative fuels if only to decrease the volatility of the markets. I don't want to pay an extra 30 cents per gallon any time some cleric sneezes or some dictator needs attention to stroke his ego. Unfortunately for some, the companies who will end up owning the alternative fuels are the same ones running the oil industry. To me it makes sense because they have the infrastructure in place so the cost to implement anything new won't be as dramatic (which should mean lower prices for us). It's not going to happen tomorrow but any pressure (ie. support) that we can put on the industry will help speed things along.

I don't know anyone on this board with a hybrid so it can't be all that bad yet.

Troy

[Shakey]

I never saw the point in complaining about the price of fuel?   

[bull]

I don't know that we're complaining about it exactly, although there is much to complain about. There's nothing that can be done about it by the folks at dc.com after all. What we are talking about for the most part is how the price is set.

But, in a futile attempt to answer Troy's question regarding my complaints about his facts: I am not arguing the facts on how these jokers come up with the prices, the supply, the refinement, etc., although it still seems pretty vague and open to interpretation. Basically we have to believe what they say and accept that the 'fears' they feel actually exist in reality (more ambiguity). The 'facts' I'm eluding to are those regarding alternative fuels and the supposed research oil companies are doing to bring them to fruition. That and the 'facts' stating all the problems we'll have if we switch to something else. Of course there will be problems but I doubt they'll be as bad as a nuke exchange with Iran. Those head-loppers want us out and I'm becoming inclined to agree with them.

Despite what some oil company executives or press releases or commercials might say I don't believe any of them are doing much if anything to reach that end. There's nothing in it for them really.

http://www.abc.net.au/am/content/2006/s1561524.htm
http://www.montereyherald.com/mld/montereyherald/15266493.htm

I guess it just annoys me when people parrot the bilge spewed by big oil companies. I don't believe much of it anymore after all the crap big corporations have put this country through. Anyway, like I said, this is going nowhere as usual and nothing we decide here matters to anyone.

[RD]

Anyway, like I said, this is going nowhere as usual and nothing we decide here matters to anyone.

nope, but sometimes it is just good to bounce ideas and opinions around.  to become an informed citizen is important in my eyes.  that is, "taking in all the information that is available and making a decision based upon that knowledge."

this is just one of many ways in which this can be accomplished, well, as long as it is done with a civil tongue and with respect.

I tend to agree with bull on many of his comments, but it does not make me not want to read those of others.  to get a holistic approach to any matter is the best approach in my opinion.

on that note, i do believe this thread has probably ran its course.  without a lock, which is good.  So, i congratulate all those that could debate this topic without resulting to violating the forum's rules.   

[Shakey]

on that note, i do believe this thread has probably ran its course.  without a lock, which is good.  So, i congratulate all those that could debate this topic without resulting to violating the forum's rules.   

Right on brotha!  Now let's go out back, smoke a coupla joints and have a few beers and celebrate the fact that we're maturing!   

[Brock Samson]

                                                          www.energy.ca.gov/consumerfuels/

[Troy]

Despite what some oil company executives or press releases or commercials might say I don't believe any of them are doing much if anything to reach that end. There's nothing in it for them really.

Yes, there is - but it doesn't involve complaining, it involves doing. The link you posted actually quoted Bush's State of the Union address where he said we need to decrease our reliance on foreign oil. Well, first of all... duh!?! The next step though is to actually do it and that means making some personal sacrifices and not expecting someone else to make it all better. Consumption is still mostly going up and that trend looks to be consistent for a long time (worldwide). The fastest way to drop the price is to decrease demand - more efficient cars, better insulated homes, better logistical planning for shipments, maintaining vehicles properly, cutting back on unnecessary trips, improved manufacturing processes, and even reducing *ack!* recreational activities. Of course, then you'd have to assume that the rest of the world plays along. EDIT: Looky, Strat posted more tips!

Despite what some oil company executives or press releases or commercials might say I don't believe any of them are doing much if anything to reach that end. There's nothing in it for them really.

You're right, why should oil companies care about alternative fuels? I'll go even further and say "why should they be forced to pick up the tab"? First, they'll be forced to pay for it out of their own pockets and then the government will tax them on producing it and then tax their earnings and then tax the actual product - which is in direct competition to the product they currently sell. Yeah, I'd be all over that too. Hey, if it's such a great idea there would be no shortage of companies falling all over themselves to be the next big players in the energy market. However, I do think that the oil companies have the resources and infrastructure to get this implemented. Remember when cars first came out and the bodies were built by coachbuilders? Why? Because they had a head start over everyone else on tooling, equipment, suppliers/resellers, and most importantly, knowledge. Of course, oil companies didn't ask my opinion and the budget to get it going is way beyond anything I've ever dealt with (and difficult to even comprehend).

"taking in all the information that is available and making a decision based upon that knowledge."

I am not a die hard conspiracy type of guy, but I do believe the excuses to push gas to the $3.00 mark are nothing but a bunch of crap, and this recent situation and the resulting lowering of the gas prices are definitely a good identifier of the BS that we are being fed.

Troy