Can anyone answer me this question? Regarding the Oil Industry.....

[Crazy Larry]

Oil just peaked at an all-time high - at $78 a barrel ......

http://biz.yahoo.com/ap/070731/oil_prices.html?.v=17



...so why am I paying $2.99 a Gallon at the pump, when Oil was trading at $60 a Barrel last summer and I was paying $3.30+....(NY prices)

....is anyone else paying cheaper than normal prices at the pump?

So does the price of a Barrel of oil not effect the price at the pump? If not, then is the Oil Industry lying to us when they raise prices at the pump due to Middle East Turmoil/Hurricanes that also cause the price per Barrel to spike?

....I'm starting to think that they are laying the price low due to record earnings and public/political outcry over the outrageous pricing as of late....

[BigBlackDodge]

The problem was that they couldn't refine the oil to gas quickly enough to meet demand. They always have to repair them just before the peak demand..........which cuts producton and drives prices up.

It's simply really. The less they produce the more money they make.


BBD

[Mike DC]

The oil industry has a certain amount of "speculation" involved in setting its prices.  (Read: estimating demand & gouging us appropriately.)  It's never been any big secret.

The refineries are the bottleneck point in the US.  It doesn't matter how much oil they pull out of the ground at any given time because it hits the market few months later.
We haven't built a new refinery in the US in decades.  Of course they like to blame that on environmental regulations, but you could make a case that it's really just to keep the prices from falling too low.  There's a whole host of economic factors for why they don't want oil prices getting too cheap.

The prices always go up in the summer & down in the winter. 
We drive more in the summer.  And they can get a little more money out of us in the summer because we're not spending all our fossil-fuel dollars heating our houses.

[Brock Samson]

greed

[Todd Wilson]

The oil industry has a certain amount of "speculation" involved in setting its prices.  (Read: estimating demand & gouging us appropriately.)  It's never been any big secret.

The refineries are the bottleneck point in the US.  It doesn't matter how much oil they pull out of the ground at any given time because it hits the market few months later.
We haven't built a new refinery in the US in decades.  Of course they like to blame that on environmental regulations, but you could make a case that it's really just to keep the prices from falling too low.  There's a whole host of economic factors for why they don't want oil prices getting too cheap.

The prices always go up in the summer & down in the winter. 
We drive more in the summer.  And they can get a little more money out of us in the summer because we're not spending all our fossil-fuel dollars heating our houses.

I can take you to 2 refineries within about 1 hour to 1 hour and a half drive from my place that have been shut down. Havent produced a thing there in a long long time!


Todd

[Crazy Larry]

The oil industry has a certain amount of "speculation" involved in setting its prices.  (Read: estimating demand & gouging us appropriately.)  It's never been any big secret.

The refineries are the bottleneck point in the US.  It doesn't matter how much oil they pull out of the ground at any given time because it hits the market few months later.
We haven't built a new refinery in the US in decades.  Of course they like to blame that on environmental regulations, but you could make a case that it's really just to keep the prices from falling too low.  There's a whole host of economic factors for why they don't want oil prices getting too cheap.

The prices always go up in the summer & down in the winter. 
We drive more in the summer.  And they can get a little more money out of us in the summer because we're not spending all our fossil-fuel dollars heating our houses.

I knew about the refineries and how we don't really use what we have - I also have heard about gasoline additives needed for environmental regulations in some states - that cause the gasoline to take a longer process in getting to the pump.

However, I still remember Gasoline prices spiking at the pump during times of Middle East turmoil - like when we went to war, or when tensions with Iran increased to what they are now...that has nothing to do with the refineries and their output.....

I would really understand if the prices and the refineries always went hand in hand - but Hurricane Katrina didn't wipe out any refineries, just oil rigs in the Gulf of Mexico, and if there is a three months buffer between oil hitting the barrel and then to the pump, and also major reserves by these oil companies, why was I paying $4.00/gal for high test in the Charger in August of 2005....only one day after the storm?

I always tried to justify it somewhat, but after this summer - with oil trading at a record high, no refinery problems, super high tensions in the middle east - and cheaper-than-normal prices at the pump.....we can only find that it is pure greed and just because they can-why the prices raise at the pump.

I just know the price of Gasoline could easily be dropped back to $1.50/gal and millions would still be made, the country would still run, and nothing would change with the oil output/intake - its amazing why our government (Senate/presidency) hasn't busted this monopoly/strangle hold Big Oil grips over us and installs government regulated price-caps. They do at the state level with public utilities such as Electricity and water...why not Gasoline?

Then you look at who is on the take - as in who has big oil investments - From Al Gore and Occidental Petroleum Company (http://www.corpwatch.org/article.php?id=468) to Sen Ted Stevens from Alaska and the most recent investigation- http://www.adn.com/news/politics/fbi/story/9179115p-9095789c.html...

we can only assume we'll be in this state forever.

[Troy]

This again? To accurately answer the question would take a lot of time to explain "How things work". Short, simple answers have never been satisfactory in the past and even detailed answers never change anyone's mind. So, pick your "bad guy" and blame them. I for one paid $2.65 yesterday so I'm not about to ask why prices aren't higher.

FYI - Katrina shut down the ports too (no tankers could unload).

Troy

[Brock Samson]

still about 3.60 a gal at the "cheap" stations here in SF, for reg...  cheapest gas in the state is only an hour drive away in Sacramento... 
it's all BS if ya ask me... nothing will stop these multinationals from raping the planet...

[Brock Samson]

  cause it's our job.

[PocketThunder]

This again? To accurately answer the question would take a lot of time to explain "How things work". Short, simple answers have never been satisfactory in the past and even detailed answers never change anyone's mind. So, pick your "bad guy" and blame them. I for one paid $2.65 yesterday so I'm not about to ask why prices aren't higher.

FYI - Katrina shut down the ports too (no tankers could unload).

Troy

This is all we need to say Troy.

            

Paul
in St. Paul

Estimator of Oil Refinery Construction

[70charger_boy]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

[Troy]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Didn't you start the last one?

Troy

[70charger_boy]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Didn't you start the last one?

Troy

Yep, and I learned never ever ever to post another one again.
Thanks Troy 

[Crazy Larry]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Not this again??

WTF back to you...

Oil just hit the highest price ever on the stock market - go find me your post about that - it just happened yesterday....I didn't see any post regarding the original question of this thread yesterday or today.

No need to take part in a conversation if you don't want to, nobody is forcing you to click on this thread.

You would have a point if there was nothing new to add to this topic, but there is....

Once again, Oil is trading at $78+ a Barrel and will probably reach $80 - this is the the highest it has ever reached in our time - this has NEVER happened before - so this qualifies as a new thread/discussion.

I simply asked if anyone might know why the price has not been effected at the pump - or will it in 3 months? Maybe some here might be more in the know on trading and industry than I. That is why I started a NEW thread and a NEW discussion.

[Troy]

Actually, it closed down today. The price of gas (and other oil-based products) relies on a whole bunch of factors which we have discussed in the past. Both gasoline and oil are sold on the open market so both are subject to speculation (although not necessarily in tandem). Remember that oil is only the raw material for gasoline - it still has to be transported, refined, and transported again. Add in different taxes, long-term contracts, seasonal and global demand, and varying profit for the middlemen and the prices become hard(er) to predict. Prices differ here by over 30 cents per gallon depending on where you are in the city which usually has absolutely nothing to do with the market. Also, reserves are primarily to cover short term problems with the supply chain and don't really count as "usable" since they have to be refilled at some point.

Troy

[bull]

"The Conspiracy of Powers" (including a group of telepathic aliens from Jupiter's moon, Io) set the price where it is now to calm the public and increase fuel sales this summer so that people will be traveling far from home and away from their guns when the invasion takes place.

[SeattleCharger]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Didn't you start the last one?

Troy

Yep, and I learned never ever ever to post another one again.
Thanks Troy 

            He is asking why the current price at the pump isn't always consistently in proportion to the current barrel price the oil companies are paying.   So this is totally different.  thanks Larry, best thread I have read in a long time,   

[70charger_boy]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Didn't you start the last one?

Troy

Yep, and I learned never ever ever to post another one again.
Thanks Troy 

            He is asking why the current price at the pump isn't always consistently in proportion to the current barrel price the oil companies are paying.   So this is totally different.  thanks Larry, best thread I have read in a long time,   

Yep and someone responded in one of my other threads that there is no link between crude oil prices and gasoline prices. Do a google search on it.  Msn had a long internet article on this.

You can think that this is a great thread...that's cool.  I know I'm not part of the click and I don't give a ...

[rt green]

well, it's a hell of a process to ground to the pump. i agree with that. all i know, is that they did the same a few years ago, at a cheaper price. maybe we use more now than we did just a few years ago.  but to hear reports of oil companies showing record profits, and us losing our asses at the pumps really pisses me off. costs more to transport it? shit those truckers are paying the same price we are.

[SeattleCharger]

Not this again.  WTF.  Next time, dig up 20 of my old posts on the oil companies.  NOBODY CARES

Didn't you start the last one?

Troy

Yep, and I learned never ever ever to post another one again.
Thanks Troy 

            He is asking why the current price at the pump isn't always consistently in proportion to the current barrel price the oil companies are paying.   So this is totally different.  thanks Larry, best thread I have read in a long time,   

Yep and someone responded in one of my other threads that there is no link between crude oil prices and gasoline prices. Do a google search on it.  Msn had a long internet article on this.

You can think that this is a great thread...that's cool.  I know I'm not part of the click and I don't give a ...

I was sort of joking, the existence of this thread doesn't really affect me one way or the other,  kind of enjoy hearing the opinion's though,

[justin1987]

well, it's a hell of a process to ground to the pump. i agree with that. all i know, is that they did the same a few years ago, at a cheaper price. maybe we use more now than we did just a few years ago.  but to hear reports of oil companies showing record profits, and us losing our asses at the pumps really pisses me off. costs more to transport it? shit those truckers are paying the same price we are.

Being in a family that has been in the oil industry for well over 30 years, I could talk your ear off on this subject. Oil companies are not the ones that are making tons of money of the oil. It is the oil refineries that are gouging everyone. The company my dad works for is locked in at $37.00 a barrel no matter what the market price is. So they are losing money now, but if oil ever goes under that (which I doubt it will) then they will be making more than market value.

I don't think a lot of people realize how many hundreds of thousands of dollars it costs to keep a low oil producing well going. Plus, around here, copper theives have been stealing wire like you can't imagine. That has caused a lot of production woes.

[Crazy Larry]

Being in a family that has been in the oil industry for well over 30 years, I could talk your ear off on this subject. Oil companies are not the ones that are making tons of money of the oil. It is the oil refineries that are gouging everyone. The company my dad works for is locked in at $37.00 a barrel no matter what the market price is. So they are losing money now, but if oil ever goes under that (which I doubt it will) then they will be making more than market value.

Now THAT is something I never heard before - very interesting.

You are saying that an Oil company is under contract to sell to the refinery at $37 a barrel? Do you know, by any chance, (or ask your Dad) how long do these contracts run for? So the refineries (which are owned by who?) set the inflated prices to sell to the Gas companies???

I always thought the refineries were owned and ran by the Gasoline companies - you are saying they are independent from them. I Never knew that.

[Mike DC]

 
Maybe the gas isn't going up -- maybe it's the US dollar that's going down.

Gas/oil prices, milk is $4/gallon, raw wood prices, steel prices, shipping prices, foreign currencies that are all gaining on us . . . I think the US dollar is suffering a lot more inflation than the official C.P.I. is ever admitting to.  The Fed keeps publishing C.P.I. numbers that make inflation look low, but the raw commodity prices & currency exchange rates all seem to tell a different tale.

 

[70charger_boy]

 
Maybe the gas isn't going up -- maybe it's the US dollar that's going down.

Gas/oil prices, milk is $4/gallon, raw wood prices, steel prices, shipping prices, foreign currencies that are all gaining on us . . . I think the US dollar is suffering a lot more inflation than the official C.P.I. is ever admitting to.  The Fed keeps publishing C.P.I. numbers that make inflation look low, but the raw commodity prices & currency exchange rates all seem to tell a different tale.

 

Yep, I totally agree.  The numbers out there are not really accurate because we are in a war and home prices are at an all time high.  When the war is over and home prices crash we will be in a world of hurt and if gas prices remain high then what?

[justin1987]

Now THAT is something I never heard before - very interesting.

You are saying that an Oil company is under contract to sell to the refinery at $37 a barrel? Do you know, by any chance, (or ask your Dad) how long do these contracts run for? So the refineries (which are owned by who?) set the inflated prices to sell to the Gas companies???

I always thought the refineries were owned and ran by the Gasoline companies - you are saying they are independent from them. I Never knew that.

I'll ask him how long the contract usually runs when he gets home.

As for the oil companies being seperate from oil refineries, the larger companies (i.e. ConocoPhillips, Valero, etc.) refine their own gas, but there are many more refineries that are privately owned by individuals. The smaller oil companies that cannot refine their own gas sell their oil to those refineries.

[Vainglory, Esq.]

Oil just peaked at an all-time high - at $78 a barrel ......

http://biz.yahoo.com/ap/070731/oil_prices.html?.v=17



...so why am I paying $2.99 a Gallon at the pump, when Oil was trading at $60 a Barrel last summer and I was paying $3.30+....(NY prices)

....is anyone else paying cheaper than normal prices at the pump?

So does the price of a Barrel of oil not effect the price at the pump? If not, then is the Oil Industry lying to us when they raise prices at the pump due to Middle East Turmoil/Hurricanes that also cause the price per Barrel to spike?

....I'm starting to think that they are laying the price low due to record earnings and public/political outcry over the outrageous pricing as of late....

I have two words for you that will explain it very easily.  Futures contracts.

Granted, there are a lot of things that go into the price of refined gasoline, but if you want to know why the price of gas doesn't directly track the price of oil, it's because the "price of oil" is not the "price of oil right now."  I realize that exchange traded derivatives might be a little advanced for some, but if you really want to understand the market for crude oil, you need to understand them.  Look up futures contracts, and you'll have the answer to your question.

[Crazy Larry]

Oil just peaked at an all-time high - at $78 a barrel ......

http://biz.yahoo.com/ap/070731/oil_prices.html?.v=17



...so why am I paying $2.99 a Gallon at the pump, when Oil was trading at $60 a Barrel last summer and I was paying $3.30+....(NY prices)

....is anyone else paying cheaper than normal prices at the pump?

So does the price of a Barrel of oil not effect the price at the pump? If not, then is the Oil Industry lying to us when they raise prices at the pump due to Middle East Turmoil/Hurricanes that also cause the price per Barrel to spike?

....I'm starting to think that they are laying the price low due to record earnings and public/political outcry over the outrageous pricing as of late....

I have two words for you that will explain it very easily.  Futures contracts.

Granted, there are a lot of things that go into the price of refined gasoline, but if you want to know why the price of gas doesn't directly track the price of oil, it's because the "price of oil" is not the "price of oil right now."  I realize that exchange traded derivatives might be a little advanced for some, but if you really want to understand the market for crude oil, you need to understand them.  Look up futures contracts, and you'll have the answer to your question.

Thanks for this - I will do just that. 

[Khyron]

It's Bush's fault.









someone had to say it

[Vainglory, Esq.]

While you look it up, it might be useful to bear in mind that, in the case of, say, an oil refiner, the purchaser of crude oil will "ladder" their contracts as a hedge against market fluctuations.  Therefore, on any given day, a refiner might buy for immediate delivery at the spot price, AND a forward contract for a month from now, AND a forward contract for six months, AND a forward contract for twelve months from now.  The prices of these derivatives may differ based on the prevailing market conditions, which are, in essence, what the traders expect the price to do. 

Because of this, the company protects itself against the vagaries of the spot-price market at any given point in the forseeable future.  Say, for instance, the spot price of oil rises next month.  Well, if you've bought futures at the prior month's lower spot price, you've helped yourself.  Say, however, that the spot price is lower in a year from now than it was when you bought the contract.  If you were to mark that to market, you'd find a loss.  The companies who do this (it's called hedging) are trading the possibility of higher profit for more foreseeability.  If you've set up a ladder of futures, you know at any given moment what your stock of crude will cost for a particular date in the future - this is good for planning purposes and may insulate your business from an unforseen shock to the market like a terrorist attack - but you're also conceding that, if the price of crude goes down in the future, you'll lose profit.

Once you understand futures contracts, you'll see how hedging makes sense for oil refiners, and when you put it together with the fact that they ladder their contracts, you'll understand why it is that a rise in the current spot price of oil has little effect on the price of gas if the market expects the price to drop later on (which presumably it does at the moment), thus making the forward contract cheaper to a refiner and lowering the replacement cost of the sold gasoline.  On the other hand, if a spike in the spot price of oil immediately correlates to a spike in the pump price of gas, you may conclude that the market generally believes that crude will be subject to higher cost and/or greater volatility in the future, raising the price of forward contracts to the refiner and causing an immediate rise in the replacement cost of gasoline.

As it turns out, when the oil companies say that it's supply and demand, they're not lying to you.  There's just a lot more that goes on behind the scenes than you might think.

Have fun researching.  I happen to think this sort of thing is really very interesting.

[jamie1974]

   So Exxon is a refiner?

   They can bitch and moan as much as they want about problems with hurricanes, the war, Bush, etc, but the BOTTOM LINE is that they reported something like $30 BILLION dollars profit last year. So someone over there is full of crap.

   Now I DID hear that the government was stepping in last summer to review Exxon, but I never heard any more.

[Mike DC]

 
You could always buy stock in Exxon and get in on the loot.   
As far as I know, Exxon's not investing in infrastructure or refineries in the U.S. with that money.  They're just buying back their own stocks & paying out higher dividends with it.

(Hmm . . . what does THAT tell you about their long-term feelings in regards to America's future energy demands?  And what does that imply about America's future economic situation in general?)
 

[Crazy Larry]

While you look it up, it might be useful to bear in mind that, in the case of, say, an oil refiner, the purchaser of crude oil will "ladder" their contracts as a hedge against market fluctuations.  Therefore, on any given day, a refiner might buy for immediate delivery at the spot price, AND a forward contract for a month from now, AND a forward contract for six months, AND a forward contract for twelve months from now.  The prices of these derivatives may differ based on the prevailing market conditions, which are, in essence, what the traders expect the price to do. 

Because of this, the company protects itself against the vagaries of the spot-price market at any given point in the forseeable future.  Say, for instance, the spot price of oil rises next month.  Well, if you've bought futures at the prior month's lower spot price, you've helped yourself.  Say, however, that the spot price is lower in a year from now than it was when you bought the contract.  If you were to mark that to market, you'd find a loss.  The companies who do this (it's called hedging) are trading the possibility of higher profit for more foreseeability.  If you've set up a ladder of futures, you know at any given moment what your stock of crude will cost for a particular date in the future - this is good for planning purposes and may insulate your business from an unforseen shock to the market like a terrorist attack - but you're also conceding that, if the price of crude goes down in the future, you'll lose profit.

Once you understand futures contracts, you'll see how hedging makes sense for oil refiners, and when you put it together with the fact that they ladder their contracts, you'll understand why it is that a rise in the current spot price of oil has little effect on the price of gas if the market expects the price to drop later on (which presumably it does at the moment), thus making the forward contract cheaper to a refiner and lowering the replacement cost of the sold gasoline.  On the other hand, if a spike in the spot price of oil immediately correlates to a spike in the pump price of gas, you may conclude that the market generally believes that crude will be subject to higher cost and/or greater volatility in the future, raising the price of forward contracts to the refiner and causing an immediate rise in the replacement cost of gasoline.

As it turns out, when the oil companies say that it's supply and demand, they're not lying to you.  There's just a lot more that goes on behind the scenes than you might think.

Have fun researching.  I happen to think this sort of thing is really very interesting.

BRAVO!

That is some really good info - I did a bit of reading and yes, it is very interesting how it all works out. I also think it is a very risky way to handle your money - you never know what will happen in the future - and if that oil price comes down than you lose money by buying a higher future price right now.

Here's a quick slant - would you say that those who are investing into near$100-a-barrel oil futures - would you say they would not want any new lands for oil to be found domestically (or alternative ways to gasoline) It would make sense that they wouldn't want the market "watered" down, and would you further say they (those investing in oil futures) would be actively raising opposition to oil research/alternative fuels for the years to come??

This is all starting to make sense. Many thanks for the info!

[dodgecharger-fan]

The futures topic is interesting. I'm going to do some more reading on that.

I also heard recently that it's the reserves that really drive the "supply" in the supply and demand equation. A book was recommended to get a good understanding: Oil on the Brain
http://www.oilonthebrain.com/


Apparently, it's a really good read and does a good job of explaining it all. I plan to pick it up soon.

[Vainglory, Esq.]

Here's some info from the Money and Investing section of August 1st's Wall Street Journal that may help explain the current situation: "Oil traders interpreted the sharp slide in the [Dow Jones] as a warning sign the U.S. economy could slow, potentially cutting petroleum demand."  This means that futures are likely cheap, meaning a rise in the spot price of oil won't have an immediate effect at the pump.  Here's some more from the same article: "The record high ...could be hard to break, though, with the rapid rise in prices starting to make some traders nervous about making bets on further gains."  It goes on to quote an oil trader who is positioning himself for shorts, saying we can't sustain the current highs and pointing to August of last year, when prices fell from $77 to below $60 in two months.  Again, this means that futures are likely cheap because traders expect the price to go down in future months, meaning the current high spot price doesn't equal a high price at the pump, due to lower projected replacement costs.

To answer Crazy Larry's question: if the oil companies are locking themselves into long-term contracts for a specific price of oil, you can bet that they won't be happy if the prices of oil fall below their contract prices.  So on the one hand, it's very logical to think that oil companies would not be happy with new discoveries of oil and/or new fuel technologies.  On the other hand, if an oil company did think that way, I'd say that they were being painfully short-sighted.  The fact is that businesses change, often in leaps and bounds over short periods of time, and if you can't adapt or try to block the change, you'll find yourself a dinosaur in a modern world.  Take IBM for instance.  They built their company on making huge, business-oriented computers.  When the world changed to PCs, they didn't try to block the change - they diversified.  Now they earn the majority of their money from business consulting, and not computers at all!  To analogize, an oil company would be better served by allowing oil discoveries and technology to progress, so that one day Chevron Texaco, for example, could find itself at the cutting edge of the booming solar energy market...

To answer Mike DC's "question": you've - inadvertently I think - hit on a very salient point.  If you're an oil company and the government is pouring massive amounts of money into alternative energy, mandating corn to replace oil, tightening restrictions on refining, threatening to tax "windfall" profits, and raising fuel economy standards, all for explicit goal of reducing our oil use, would you be making capital investments?  I wouldn't...

[SeattleCharger]

When I have knocked the oil companies to my stepdad, (he is in investing and a republican) he says the oil companies have never been a good investment and have typically had very low profit margins.  That is over the last many many years until recently.   
  Now from what vainglory is saying,  many of their costs are set up in a present time in varying time lengths of contracts for varying legths of time into the future, maybe on speculation and prediction of future prices/demands, etc. 
    So, the oil companies had many deals and contracts for their supply set up before the war and the hurricane, so when the supply and demand situations changed, they were able to charge a bunch more because the supply appeared to be going down, and since their are more and more demands for oil, the demand was only going up.   The oil companies were then making huge profits since they had locked in relatively good prices compared with the new supply and demand prices that came in the post war/hurricane market.  Once their supply contracts expire, their profits should go significantly back down.   

[Troy]

   So Exxon is a refiner?

   They can bitch and moan as much as they want about problems with hurricanes, the war, Bush, etc, but the BOTTOM LINE is that they reported something like $30 BILLION dollars profit last year. So someone over there is full of crap.

   Now I DID hear that the government was stepping in last summer to review Exxon, but I never heard any more.

Somewhere on this site is a long thread about Exxon, their prices, and profits. The government loves oil company investigations because it makes them look concerned for their constituents. This is usually right before they raise the gas tax. You didn't hear anything else about it because, once again, they (Exxon) didn't do anything wrong. Exxon is the largest oil company on the planet so if they were only making $5 in profit we'd be in trouble. They have 82,100 employees and had total revenue of $377.6 billion in 2006 with a profit margin of 10.99% (most likely less than your bank and insurance company).

Yes, they have refining capabilities (they have 40):
http://www.exxonmobil.com/Corporate/About/refining.asp

For anyone really interested, look up the refining capacity around the world (particularly Europe). Then, compare that to the gasoline prices in the different areas. Don't forget that countries like Venezuela and Iran provide gasoline subsidies for their citizens so the price at the pump isn't the real price.

In regards to investment, Exxon in particular is projected to start into a slide (they can't very well keep growing at the same pace forever). I wouldn't be spending billions on new refineries and equipment either with the government seriously clamping down on fossil fuels within 30 years. They know the bottom will drop out some time in the future so they're saving up now while the going is good.

Troy

[Mike DC]

To answer Mike DC's "question": you've - inadvertently I think - hit on a very salient point.  If you're an oil company and the government is pouring massive amounts of money into alternative energy, mandating corn to replace oil, tightening restrictions on refining, threatening to tax "windfall" profits, and raising fuel economy standards, all for explicit goal of reducing our oil use, would you be making capital investments?  I wouldn't...

My point wasn't inadvertent.  They don't seem to be growing the oil infrastructure in the U.S., and I agree they've got good reasons for that decision.  (Alternative energies, the decentralization of the population has played itself out pretty far already, etc.) 

And how much oil do we really have left, worldwide, assuming that Asia's oil demand continues to increase?  Of course everybody's oil reserve numbers will all start raising again once there's economic impetus to do so, but at the same time it's not like they're finding any more supergiant oil fields anymore.  (And the situation in Saudi Arabia seems unsettling to me.  When's the last time an outside party has actually put a dipstick into the ground and truly verified their reserve numbers?)  I'm not trying to derail the discussion, but it's still a real issue even after the rising prices increase the "extractable" threshold to some extent.  The middle-eastern deserts may well be peaking right now, and the Canadian tar sands oil is unlikely to ever get much cheaper to extract no matter how much research they throw at it.  It's mostly downhill from there, and we're already at the point where offshore drilling & water injection of older wells is really growing worldwide.


I just don't think the alternatives (ethanol, cleaner/greener energies, fuel economy standards, etc) are gonna "make up the difference."  Just because we're not gonna burn any additional oil in the future doesn't automatically mean we're gonna find the equivalent amount of affordable alternatives.  The other option is that we're just looking at an overall increase in energy prices and a reduction in energy usage relative to the growing population in the U.S. 

And if that's the case, it reads to me like an economic & lifestyle decline in a big way here.  Unfortunately the American public that I see every day is the most energy-addicted society that I could imagine, from the (cheaply insulated) 3000-square-foot houses, to the 5500-pound trucks, to the 50-mile commutes . . . there's just no wiggle room on the issue at all without major problems.  We can switch to Honda Civics, but after that there's not much we can do other than pay up.

 

[Brock Samson]

so there's alot of good info here i'm sure... 

but still, noone has answered the question why the bay area has the highest gas prices in the state, while 50 miles up the road (where our legislators ride around in limos and SUVs) are the lowest prices in the state (Ca.) BTW we have a major refinery located at point richmond, right here...



   http://www.google.com/search?hl=en&sa=X&oi=spell&resnum=1&ct=result&cd=1&q=chevron+refineries&spell=1


i say it's straight up corruption pure and simple..

after Katrina our prices spiked and we are still paying the the highest prices in the nation... WHY? 

Cause the balance of power in this nation is in the hands of multi-national Big Biz. All mom and pop operations are being shut out and closed down,.. soon it will all be a nation of strip malls with your choice for food being Micky Ds or Burger King...

corruption is rampant at all levels of our society.
 

China and Saudi Arabia are now poised to rule/ruin our planet, i personally belive we Americans are intellectually twenty to thirty years behind the curve, alot has changed, and we haven't been told... the ones who do know are simply using this knowlage to cash in...
dont expect Rupert to clue you in either...

I belive alot of assumptions we hold/held are loooong past obsolete.
more..


  http://news.yahoo.com/s/thenation/20070802/cm_thenation/15219523

20 billion in arms going to the Saudis...

http://www.forbes.com/markets/feeds/afx/2007/08/03/afx3984279.html

China A-shares at record high.
 

[Crazy Larry]

Brock,

   i lived out in Petaluma, CA for a half a year, and the gas prices in San Fran/Bay Area were always crazy high (this was back in 1999). I can only imagine what they are at now.

   here in NY State, we have some of the highest state taxes on gasoline in the country - so we are sitting high, and the price could always drop down by 60 cents if they would take away the state tax - but it never will.

   This is where your city or area of the state may have an extra tax hidden in there and charging everyone. That is outrageous, and what is worse, is that those gasoline taxes are not a constant - so its not like they can budget in for a specific amount into the state budget - so when gasoline prices rise (and the tax is placed on the gallon - usually at a percentage of what the pump is asking) that means the state is getting more money than what they have budgeted or expected to receive that year.

   Now the crime is - we never hear what happens or how is that extra money used - it goes away and is used somewhere. And that is a crime when you can't account for what we are taxed.

   NY and CA are the worst states for this - and its no wonder that they constantly vote Dem in every election. I don't want to turn this into a political thread, but this is a clear example of how Gasoline and Big Oil money is not just a republican issue (as Al Gore and Michael Moore would want you to believe). It is clearly profitable on both side of the aisle.

[Crazy Larry]

Here's some info from the Money and Investing section of August 1st's Wall Street Journal that may help explain the current situation: "Oil traders interpreted the sharp slide in the [Dow Jones] as a warning sign the U.S. economy could slow, potentially cutting petroleum demand."  This means that futures are likely cheap, meaning a rise in the spot price of oil won't have an immediate effect at the pump.  Here's some more from the same article: "The record high ...could be hard to break, though, with the rapid rise in prices starting to make some traders nervous about making bets on further gains."  It goes on to quote an oil trader who is positioning himself for shorts, saying we can't sustain the current highs and pointing to August of last year, when prices fell from $77 to below $60 in two months.  Again, this means that futures are likely cheap because traders expect the price to go down in future months, meaning the current high spot price doesn't equal a high price at the pump, due to lower projected replacement costs.

To answer Crazy Larry's question: if the oil companies are locking themselves into long-term contracts for a specific price of oil, you can bet that they won't be happy if the prices of oil fall below their contract prices.  So on the one hand, it's very logical to think that oil companies would not be happy with new discoveries of oil and/or new fuel technologies.  On the other hand, if an oil company did think that way, I'd say that they were being painfully short-sighted.  The fact is that businesses change, often in leaps and bounds over short periods of time, and if you can't adapt or try to block the change, you'll find yourself a dinosaur in a modern world.  Take IBM for instance.  They built their company on making huge, business-oriented computers.  When the world changed to PCs, they didn't try to block the change - they diversified.  Now they earn the majority of their money from business consulting, and not computers at all!  To analogize, an oil company would be better served by allowing oil discoveries and technology to progress, so that one day Chevron Texaco, for example, could find itself at the cutting edge of the booming solar energy market...

To answer Mike DC's "question": you've - inadvertently I think - hit on a very salient point.  If you're an oil company and the government is pouring massive amounts of money into alternative energy, mandating corn to replace oil, tightening restrictions on refining, threatening to tax "windfall" profits, and raising fuel economy standards, all for explicit goal of reducing our oil use, would you be making capital investments?  I wouldn't...

That is why I think it would be crazy to trade these futures at $80+ when just last year they were at $60 - thats a big dip if it were to happen again.

It seems the only country going out an trying to actively claim oil fields is Russia - with what they just pulled up in the North Pole. Maybe we should get that aggressive with our potential oil fields off of California that are in "protected environment areas" - but those decisions are made by oil companies/research companies and politicians - and if they don't want the price to dip in futures, they'll let them sit for another 10 years.

So yes, it would be extremely narrow-minded to sit back and watch others advance - unless - the others are all playing ball on the same team and will not make the first step at advancement - in order to keep the market in check.

Do you think this is all by chance or do you think that there is an active communication on the part of all oil companies to not reveal all the oil that we really have - kind of like a giant scare tactic, that keeps the consumers paying high, and the market asking high?

I tend to think they want us all thinking that the Mad Max scenario - with bandits raiding innocent passengers for the gasoline in their tanks is not too far off.

[Mike DC]

The shortages are bull in the short term.  Just driving up the market by goosing the press with a steady stream of excuses for why the price is temporarily high (and yet it never really gets low again).  And they also float a "peak oil" scare every now & then.

We can chew on the specifics all day. 
I think the oil supply is fine in the short term, but in the big picture we've still got a problem.  We've already found most of the oil on earth.  We used up the cheaper half of it pretty quickly.  We're addicted to the use of it, and now Asia is coming into the market with just as much money/clout as we'll probably have in the future.   

 

[bull]

   So Exxon is a refiner?

   They can bitch and moan as much as they want about problems with hurricanes, the war, Bush, etc, but the BOTTOM LINE is that they reported something like $30 BILLION dollars profit last year. So someone over there is full of crap.

   Now I DID hear that the government was stepping in last summer to review Exxon, but I never heard any more.

Somewhere on this site is a long thread about Exxon, their prices, and profits. The government loves oil company investigations because it makes them look concerned for their constituents. This is usually right before they raise the gas tax. You didn't hear anything else about it because, once again, they (Exxon) didn't do anything wrong. Exxon is the largest oil company on the planet so if they were only making $5 in profit we'd be in trouble. They have 82,100 employees and had total revenue of $377.6 billion in 2006 with a profit margin of 10.99% (most likely less than your bank and insurance company).

Yes, they have refining capabilities (they have 40):
http://www.exxonmobil.com/Corporate/About/refining.asp

For anyone really interested, look up the refining capacity around the world (particularly Europe). Then, compare that to the gasoline prices in the different areas. Don't forget that countries like Venezuela and Iran provide gasoline subsidies for their citizens so the price at the pump isn't the real price.

In regards to investment, Exxon in particular is projected to start into a slide (they can't very well keep growing at the same pace forever). I wouldn't be spending billions on new refineries and equipment either with the government seriously clamping down on fossil fuels within 30 years. They know the bottom will drop out some time in the future so they're saving up now while the going is good.

Troy

Here's an idea: Exxon should take some of that 11% profit out of its own pocket and finish fixing the screwed up mess it make in Alaska.

[Crazy Larry]

The shortages are bull in the short term.  Just driving up the market by goosing the press with a steady stream of excuses for why the price is temporarily high (and yet it never really gets low again).  And they also float a "peak oil" scare every now & then.

We can chew on the specifics all day. 
I think the oil supply is fine in the short term, but in the big picture we've still got a problem.  We've already found most of the oil on earth.  We used up the cheaper half of it pretty quickly.  We're addicted to the use of it, and now Asia is coming into the market with just as much money/clout as we'll probably have in the future.   

 

They say that with deep core drilling, better deep water diving technology, and also better underwater horizontal drilling technology - there are oil fields out there we haven't even discovered. And no one has tapped the floor of the North Pole - which is why Russia is trying to claim it as their own......

articles.....

http://news.yahoo.com/s/nm/20070802/ts_nm/russia_arctic_dc_7

http://www.breitbart.com/article.php?id=070802092713.ofcte485&show_article=1

"Russia wants to extend right up to the North Pole the territory it controls in the Arctic, believed to hold vast reserves of untapped oil and natural gas."

There's still so much oil under the earth and the ocean is far greater than we would ever know, because up until now, we've never had the technology or need to search for it. All we need is the political and economical push to go and get it - which also up until now, we've never had the need for such a push.

[Mike DC]

I disagree.

There's a limit to where crude oil is ever gonna be found just because of what it is and how it forms.  And the fact is that we've found most of it already.  We haven't found a single new supergiant oil field in something like 40 years.  The new discoveries are notable, but they're still generally small scattered pockets compared to the stuff we were finding decades ago.  And the new extended amounts of oil that we're getting from the older wells is being reached by increasingly expensive & drastic methods.

We're still running out in the big picture.

 

[CharlieCharger]

 
You could always buy stock in Exxon and get in on the loot.   
As far as I know, Exxon's not investing in infrastructure or refineries in the U.S. with that money.  They're just buying back their own stocks & paying out higher dividends with it.

(Hmm . . . what does THAT tell you about their long-term feelings in regards to America's future energy demands?  And what does that imply about America's future economic situation in general?)
 

I would have to disagree with you about not investing in infrastructure ..I work for the largest refinery  in the U.S (Exxon Bay town) and we are adding several new units as well as just finishing  a major overhaul of one of our Pipe stills..Our last new unit addition was finished in 2000 ..and another overhaul on our hydro cracking unit in June..as long as it has to do with producing oil you can believe there is money going to it

[pettyfan43]

Actually Scientists are rethinking WHERE crude actually comes from , Two of the biggest oil fields we have, under the ocean, were supposedly getting low 15 years ago. About 6 months ago there was a report released that said, the crude levels in these two oil fields and others, actually had NOT DROPPED over the last 15 years and had apparently RISEN! YEAH they are rethinking WHAT crude is and WHERE it is coming from because there is a very real possibility that our oil supply is a renewing resource.

Scientists give the impression that they have it all figured out, in actuality, what they DO know about this planet is infinitely small compared to what they d NOT know and only speculate about. Of course the oil companies and the left leaning media are REALLY NOT gonna be happy if this becomes common knowledge. And nobody wants to stand up to the environmental idiots and the dirt Nazis.

[RECHRGD]

Actually Scientists are rethinking WHERE crude actually comes from , Two of the biggest oil fields we have, under the ocean, were supposedly getting low 15 years ago. About 6 months ago there was a report released that said, the crude levels in these two oil fields and others, actually had NOT DROPPED over the last 15 years and had apparently RISEN! YEAH they are rethinking WHAT crude is and WHERE it is coming from because there is a very real possibility that our oil supply is a renewing resource.

Scientists give the impression that they have it all figured out, in actuality, what they DO know about this planet is infinitely small compared to what they d NOT know and only speculate about. Of course the oil companies and the left leaning media are REALLY NOT gonna be happy if this becomes common knowledge. And nobody wants to stand up to the environmental idiots and the dirt Nazis.

I agree!!  In fact I was just about to bring up the same thing.  Just when did the Earth decide that it was going to stop producing crude??  The enviromentalist's agenda would go to hell real quick if oil was considered a renewable energy source.  BTW, here in Wa. State they've declared that water is NOT a renewable resource in order to give paybacks to solar and wind power developers.  They would like to tear down all the (cheap) energy producing dams in order to bring up the numbers in the Salmon runs.  Thing will get pretty dim around here if we have a few days without wind and sun.   Bob

[Mike DC]

Actually Scientists are rethinking WHERE crude actually comes from , Two of the biggest oil fields we have, under the ocean, were supposedly getting low 15 years ago. About 6 months ago there was a report released that said, the crude levels in these two oil fields and others, actually had NOT DROPPED over the last 15 years and had apparently RISEN! YEAH they are rethinking WHAT crude is and WHERE it is coming from because there is a very real possibility that our oil supply is a renewing resource.

Scientists give the impression that they have it all figured out, in actuality, what they DO know about this planet is infinitely small compared to what they d NOT know and only speculate about. Of course the oil companies and the left leaning media are REALLY NOT gonna be happy if this becomes common knowledge. And nobody wants to stand up to the environmental idiots and the dirt Nazis.

You're not referring to the "abiotic oil" theory, are you?  It's a tantalizing idea, but I don't think it's a valid one. 

Too many other things about oil are explained by the conventional theory and rendered invalid by that one.  And even if you bite off the idea that the wells are actually gonna refill themselves, most of the wells on earth obviously aren't doing it fast enough to be relevant to us.  (I mean, why has North American oil well production already peaked & gone down since 1970 if the wells are just gonna refill themselves on their own?)

 

[pettyfan43]

Actually Scientists are rethinking WHERE crude actually comes from , Two of the biggest oil fields we have, under the ocean, were supposedly getting low 15 years ago. About 6 months ago there was a report released that said, the crude levels in these two oil fields and others, actually had NOT DROPPED over the last 15 years and had apparently RISEN! YEAH they are rethinking WHAT crude is and WHERE it is coming from because there is a very real possibility that our oil supply is a renewing resource.

Scientists give the impression that they have it all figured out, in actuality, what they DO know about this planet is infinitely small compared to what they d NOT know and only speculate about. Of course the oil companies and the left leaning media are REALLY NOT gonna be happy if this becomes common knowledge. And nobody wants to stand up to the environmental idiots and the dirt Nazis.

You're not referring to the "abiotic oil" theory, are you?  It's a tantalizing idea, but I don't think it's a valid one. 

Too many other things about oil are explained by the conventional theory and rendered invalid by that one.  And even if you bite off the idea that the wells are actually gonna refill themselves, most of the wells on earth obviously aren't doing it fast enough to be relevant to us.  (I mean, why has North American oil well production already peaked & gone down since 1970 if the wells are just gonna refill themselves on their own?)

 

Like I said, Several of the biggest ones levels are NOT falling and a couple have actually RISEN, This has been reported a couple times. I'm searching to see if I can find one of the stories, but it isn't like it's a big secret.

[Beer]

I disagree.

There's a limit to where crude oil is ever gonna be found just because of what it is and how it forms.  And the fact is that we've found most of it already.  We haven't found a single new supergiant oil field in something like 40 years.  The new discoveries are notable, but they're still generally small scattered pockets compared to the stuff we were finding decades ago.  And the new extended amounts of oil that we're getting from the older wells is being reached by increasingly expensive & drastic methods.

We're still running out in the big picture.

 

I have been employed on a 5th generation Drillship since it was built in 2000. There are plenty of new significant finds right in the Gulf of Mexico...Deepwater is booming.

We just wrapped up setting Tahiti up for production about 120 miles from SW Pass LA (google Chevron and Tahiti).  BP has Thunderhorse. Several other finds are also being worked right in the Gulf of Mexico. New Deepwater Production platforms are being made for the new deepwater discoveries.

Technology for exploration, drilling, testing, and producing in up to 10,000' of water to a total true vertical depth's of 35,000' is not cheap. Nor is directional drilling cheap (sidetracking).

Companies are in fact investing in infrastructure as the exploration as new builds are being built in Korea and Singopore (Google Transocean/Seadrill/Diamond for new additions planned to their fleet).

[Mike DC]

 
I'm not saying that they're not finding new oil. 

I'm saying that the new oil they're finding isn't enough to cancel out the rate we're using it up worldwide.  A huge oil discovery today would have been viewed as a mediocre discovery 50 years ago.  We've found the really huge concentrations of cheap oil already, and that's what we've been using up first.  From here on out, the worldwide situation is just increasing extraction costs and worsening reserve/demand ratios for the foreseeable future.

 

[pettyfan43]

But real world evidence just doesn't point that way. Think about this, where we ARE drilling are only pinpoints on a map in relation to the size of the earth. I think there is MUCH more down there than we can ever fathom, and we can get to it in time if the Dirt Nazis and the algores of the world will mind their own business.

[Mike DC]

To the contrary, I think the real-world evidence DOES point that way in this case. 
The raw amounts of oil discovered over the decades shows a lot more oil being discovered decades ago. 


We're just finding more oil right now than 15-30 years ago because the price went up so there's an incentive to look for it again.  But the technology has been growing all the time.  We've got better & better ways of targeting exactly where the oil is likely to be found, and yet we're still making some pretty small new discoveries compared to the mid-20th century findings. 

If we could really get lots more massive quantities of oil just by looking, then we wouldn't be doing expensive deep-core offshore drilling just to get batches of oil a fraction of the size of what we used to find.  It would be A LOT more profitable to find a few more BIG wads of oil in politically compatible areas than doing what they're doing right now. 

And why not just find enough oil in the continental U.S. to get rid of the middle-east's influence on the western world's politics?  It would save us a lot of trouble.  But instead the U.S. chooses thankless/bloody/unpopular military action (costing a couple trillion dollars that it already owes to other countries) trying to bring some long-term stability to the middle east.  The current Iraq war isn't the subject of this discussion (and I don't think it's that simple either), but the fact is that the entire western world generally cares way too much about middle-eastern stability for the oil not to be critical to us.


Right now, the world is collectively going back and finding the smaller oil fields that we ignored 50 years ago because there used to be a lot of other huge/cheap oil fields to pump first.  A profit-driven industry like Big Oil is only gonna do the harder work once they're really starting to exhaust the biggest & most profitable sources already.

 

[SirNik73]

 
Maybe the gas isn't going up -- maybe it's the US dollar that's going down.

Gas/oil prices, milk is $4/gallon, raw wood prices, steel prices, shipping prices, foreign currencies that are all gaining on us . . . I think the US dollar is suffering a lot more inflation than the official C.P.I. is ever admitting to.  The Fed keeps publishing C.P.I. numbers that make inflation look low, but the raw commodity prices & currency exchange rates all seem to tell a different tale.

 

YEP!

In 2002 the Jack in the Box Big Cheese Burger was $0.99 now its over $2 at some Jack's....
Am I the only one that is watching this?

Last summer Burger King Double Cheese Burger was $0.99 now its $1.89

Who the hell is controlling this!

I want my Cheap Lunch back!

********UPDATE*********

Went to lunch today. the Burger King Double Cheese Burger is now $2.19 but it still tastes great.

[bull]

Who's controlling it? The "people" who keep jacking up the minimum wage and thinking they're helping people by doing it. You think 'ol Jack is going to take it in the shorts when the govt. forces him to increase wages? No. Jack passes it on to all the piss ants making $7.50/hr and then those same piss ants wonder why the price of hamburgers, movies, pizzas and beer keeps going up.

[70charger_boy]

Maybe the gas isn't going up -- maybe it's the US dollar that's going down.

Gas/oil prices, milk is $4/gallon, raw wood prices, steel prices, shipping prices, foreign currencies that are all gaining on us . . . I think the US dollar is suffering a lot more inflation than the official C.P.I. is ever admitting to. The Fed keeps publishing C.P.I. numbers that make inflation look low, but the raw commodity prices & currency exchange rates all seem to tell a different tale.

YEP!

In 2002 the Jack in the Box Big Cheese Burger was $0.99 now its over $2 at some Jack's....
Am I the only one that is watching this?

Last summer Burger King Double Cheese Burger was $0.99 now its $1.89

Who the hell is controlling this!

I want my Cheap Lunch back!

whopper jr's and chicken crisp sandwiches are .99 cents

[Brock Samson]

a nation of strip malls just like i said.

[Mike DC]

 
Man, that issue is A LOT bigger than just the minimum wage.  Look to the whole economy & spending habits of the last 30 years or so, the trade deficits, the massive federal debt, etc.

   

[bull]

 
Man, that issue is A LOT bigger than just the minimum wage.  Look to the whole economy & spending habits of the last 30 years or so, the trade deficits, the massive federal debt, etc.

   

He was asking about $.99 burgers, not furniture imported from China and credit card debt.

[Crazy Larry]

 
Man, that issue is A LOT bigger than just the minimum wage.  Look to the whole economy & spending habits of the last 30 years or so, the trade deficits, the massive federal debt, etc.

   

He was asking about $.99 burgers, not furniture imported from China and credit card debt.

Cheeseburgers at McDonald's still 99 cents - and hamburgers are 89 cents.

I think that is pretty much consistent with the last 20 years or so.....

and you can buy them with a credit card now - how convenient!

[Mike DC]

 
Burger prices?  Yeah, maybe that one is being affected by the minimum wage hikes. 

Hmm . . . I'd be curious about how much the location labor actually adds to the total cost of fast food. 
It's probably not the whole story but I'm sure it's still a decent chunk of change.

------------------------------------------------------------------------

Either way, the big country-killer isn't the minumum wage levels.  It's the lack of better-paying jobs several notches above that level.

Better jobs causes MUCH lower crime, lower school dropout rates & more higher education, families sticking together & splitting apart for the right reasons (instead of forced cohabitation for rent money or splitting up for the sake of faraway jobs), kids get raised by their loving parents (instead of being raised by the media while their parents are at work all day), people can start voting based on the right decisions for the country overall (instead of desperately voting with their wallets every four years just to keep from going under) . . .

The lack of decent working/middle-class jobs is such a total chain-reaction that's messing America up at this point.

 

[Vainglory, Esq.]

There will always be a lack of "decent" jobs if you never define decent.  That way no one can contradict you.

Show some semblance of fact to back up what you're saying, or else all you're left with is an assertion.

[bull]

I think we should raise the minimum wage to $100k a year or $50/hr. That way we'll all be rich, right?

[70charger_boy]

I think we should raise the minimum wage to $100k a year or $50/hr. That way we'll all be rich, right?

[Mike DC]

 
Vain, was that last post of mine really very controversial/incorrect in nature? 


Methinks you might be picking on the idea just for the sake of it. 

 
 

[Vainglory, Esq.]

Yes it is very controversial, and I think if you look at the facts, you'll find that it's just as incorrect.  Show me proof of the lack of "decent" jobs.  Show me proof of a lack of jobs at all.  Show me some fact that points to the vaguest idea that more people are not doing better than they ever have...

If you can't find evidence that the sky is falling, there's no need to pretend that it is, even if it helps to make your point.  Repeated assertion does not a truth make.

[Mike DC]

I was originally just trying to make the point that the widening class gap causes a chain reaction much bigger than the raw dollars alone. 
I'm not sure how your assertion of a stable class gap became the "baseline" and my assertion became the one needing defending.

If you wanna debate whether Joe Average is having a harder time of it than he was a few decades ago, be my guest.  First we'll argue about where the classes really divide, then we'll argue about what a "decent standard of living" is, then we'll debate whether people really have less or just want more . . .