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DozerMite

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The price of gas just jumped to $3.99 for 87 octane.
Just heard on the news that they expect crude to go over $200 a barrel by next year. That would make gas over $7.00 a gal. All the while the oil companies are reporting $3.6 billion profits in three months.

I guess it's time to set the lathe up to drill for oil...
 
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I heard that many of our big pension plans are actually making it worse, because they are investing heavily in petro futures and driving the prices up even further.
 
It amazes me that all you ever hear is "profit" and nary a work about "Profit MARGIN".

Oil is a HUGE industry... and it has HUGE costs! "Big oil" profit margins runs about 10%...

We do not drill, refine, heck we have not open a refinery in close to 30 years and we have even lost refinery capability in that time. Our dollar stinks to buy oil over seas, and now we threaten to sue OPEC in a market where costs are pretty much "bet on".Oh heck, might as well tax those huge "wind fall profits" of 10%, Eh? And we are in shock just why???!!!!

Speaking of "windfall profits", do you know that Harvard can pay the tuition for the entire school on 1/8 of the yearly intrest based on thier endowments alone!! I wonder what "Big Harvard" runs for a profit margin?

Sorry to rant, but the fix is not to hammer "big oil" for making money, it is to open our eyes and support ourselves with what we have been given. I am all for alternative energy, but until we have something we can not tank our country by doing zip!

So please, think about the big picture and not just the "wow, that's a lot of money!"
 
Originally posted by DozerMite

The price of gas just jumped to $3.99 for 87 octane.
Just heard on the news that they expect crude to go over $200 a barrel by next year. That would make gas over $7.00 a gal. All the while the oil companies are reporting $3.6 billion profits in three months.

I guess it's time to set the lathe up to drill for oil...
Click to expand...

I read where the US uses about 140 billion gallons of gasoline each year. That amounts to 46 billion gallons a quarter. If my math is correct that means that oil companies profit is 8 cents per gallon. By comparison, the average combined state and federal gas tax is 48 cents.

Not sure that "big oil" is to blame for the high prices.

jeff
 
Same story different animal----investors are buying up calves at a super inflated price---most of the time they are paying double the price. They will graze them this summer and sell in the fall making a good profit. Here's the catch---no one can afford to replace these calves so the price/demand will even go higher. What will the price of calves be a year from now---if you can even find any for sale.
By the time this whole thing settles down we will see a different way of living here in the USA.
 
The supply and demang argument is well and good. However, teh increased cost of oil doesn't account for record profits. Consider this scenario:

If I buy a widget for a dollar, I'll sell it for $1.10. If my widget costs increase to $2.00, I will have to pass the cost increase to my customers, or go out of business. Should I now sell the widget for $2.10 or should I sell it for $2.20?

If I sell it for $2.10, I've kept my amount of profit the same but passed the increase supply cost on. If I sell it for $2.20, I've passed on my cost increase and gouged my customers an additional ten cents per widget.
 
Not to start an argument but I've owned a number of businesses and your off base. If the wiget cost $1.00 and I sell it for $1.10 I'm making 10 % gross profit before other expences now the wiget increases to $2.00 my cost, to keep the same 10% gross I have to charge $2.20, not to say we aren't being gouged by Exxon and Mobile because when oil was $50 a barrell the raw cost per gallon was 90.9 and gas was 1.00 a gallon a 10% gross profit before expences, now oil is $135.00 aq barrel making the raw oil cost 2.45 a gallan and gas is $4.00 a gal a 61% gross profit before expences,so even keeping with a 10% gross profit gas would be $2.69 a gallon.



Originally posted by sbell111

The supply and demang argument is well and good. However, teh increased cost of oil doesn't account for record profits. Consider If I buy a widget for a dollar, I'll sell it for $1.10. If my widget costs increase to $2.00, I will have to pass the cost increase to my customers, or go out of business. Should I now sell the widget for $2.10 or should I sell it for $2.20?

If I sell it for $2.10, I've kept my amount of profit the same but passed the increase supply cost on. If I sell it for $2.20, I've passed on my cost increase and gouged my customers an additional ten cents per widget.
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That is my point. Gross margin is not a fair way to look at profits when you are trying to argue that 'times are tough all over', as the oil companies are attempting.

There's also the argument that one shouldn't boost profits during a time of war for a commodity item. It is practically the definition of price gouging.
 
There is always another side of the coin. If you are a retiree with a portfolio of stocks which includes Exxon, do you want someone regulating the profit? Exxon has a marvelous track record of having increased its dividend annually for 10 consecutive years. Their dividend payout ratio is 23% which is quite high for huge multinationals. The compound annual growth rate for just the dividend component of Exxon has been over 8% for the past 10 years. Not only that, but they have paid dividends every year since 1882 (Yes, eighteen, eighty-two!). While I admit I'm not crazy about $4 a gallon gas, I do like a capitalist society wherein I am allowed to invest and share in the profits.
 
Given that the nation is at war and at the brink of recession and that that the oil companies benefit from government subsidies, I would think that some restraint would be called for.

BTW, I'm not your financial advisor, but if I were, I would recommend that you take your money out of oil stocks if you are retired or nearing retirement.
 
In the early 1970's, there was a new engine that showed real promise, operating without gasoline (I THINK it was electric). GM bought the patents and rights (IIRC). At the time, I thought they would develop it and LEAD the nation, some day. INSTEAD they put it on a shelf and kept it from becoming competition.

Gas was only 50 cents a gallon, who needed an ALTERNATIVE.

Then, the Toyotas of the world cleaned their clock. BUT, still no technological improvments. The world has rewarded GM's stupidity with mediocre results. THINK where thay could be if they had DEVELOPED alternatives in the mid-70's. We, in the USA could be laughing at the world if we were no longer DEPENDANT on oil!!!

But, we're not.
 
What about those of us in oil producing countries that pay WAY more per gallon than you do? Perhaps we should be complaining too?

Personally, I'm getting a bit tired of seeing all these posts on gas prices. If high prices bothers you, change your habits, or reduce your dependence...

Unfortunately, complaining without action is like sitting in a rocking chair - it gives you something to do, but you don't get anywhere...

:)
 
You are ABSOLUTELY correct.

WE should learn to have six weeks of vacation, like many European countries. We should learn to have our jobs very close to home - SHRINK all that damn real estate we drive past!!! IF we can successfully do everything just like the REST of the world, we COULD become "just another country" instead of the only "superpower" on earth. (Who will be HAPPY to defend Canada should they ever be attacked by another country - that's what GOOD neighbors do.)

BEFORE we are LIKELY to change our habits, we have to feel some pain. (And take some jabs from our neighbors!!) THAT is where we are, NOW. Historically, we have created solutions thereafter.

There is not much horse poop on New York streets, anymore!!!

Just stay in that rocking chair and WATCH!!!
 
Amen to the idea that we change our habits. How many of us find that we need to run to the grocery store, daily, for some little thing we are out of? How many of us get home from work, just to jump back into the car to get dinner to go at the place we just passed...on and on I could go.

I feel I'm doing my part. I checked and I have not purchased fuel since early March and still have half of one tank. I have my groceries delivered and even have wood working stuff from across town shipped. It still costs me much less than the fuel.

We are a vehicle reliant population and until we learn to really evaluate our driving, we will be feeding the off shore oil industry.

The price of fuel today only really bothers me because I can't get up and willynilly pull the RV around the country for no good reason other than a change of scenery. Now, the price of food does bother me...have not found a way out eating!:)

BIG Doug
 
$4 for a gallon of HEATING oil is also a little depressing. (Up 300% in about 3 years) I imagine this is true in Canada, also???


So, I will work longer hours and earn additional money, so I can continue to live as I wish. VACATIONS have NEVER been on my "to-do list".
 
Originally posted by OKLAHOMAN

Not to start an argument but I've owned a number of businesses and your off base. If the wiget cost $1.00 and I sell it for $1.10 I'm making 10 % gross profit before other expences now the wiget increases to $2.00 my cost, to keep the same 10% gross I have to charge $2.20, not to say we aren't being gouged by Exxon and Mobile because when oil was $50 a barrell the raw cost per gallon was 90.9 and gas was 1.00 a gallon a 10% gross profit before expences, now oil is $135.00 aq barrel making the raw oil cost 2.45 a gallan and gas is $4.00 a gal a 61% gross profit before expences,so even keeping with a 10% gross profit gas would be $2.69 a gallon.



Originally posted by sbell111

The supply and demang argument is well and good. However, teh increased cost of oil doesn't account for record profits. Consider If I buy a widget for a dollar, I'll sell it for $1.10. If my widget costs increase to $2.00, I will have to pass the cost increase to my customers, or go out of business. Should I now sell the widget for $2.10 or should I sell it for $2.20?

If I sell it for $2.10, I've kept my amount of profit the same but passed the increase supply cost on. If I sell it for $2.20, I've passed on my cost increase and gouged my customers an additional ten cents per widget.
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I don't want to be argumentative here, but the math doesn't add up here. At $135 per barrel (42 gallons of oil in a barrel), you get $3.22 a gallon. Amazingly during the refining process, the barrel of oil grows into 44 gallons of material. About HALF of this is gasoline. About a QUARTER is Diesel, and the rest is used for plastics and other stuff. With fees for refining, distribution, the profit the gas station makes, and the taxes for a gallon of gas, you get where we are today.

The market is supporting a 60% plus markup for sheer SPECULATION. That means people are buying in order to sell it at a profit later on, because someone else thinks $135 a barrel is going to be a bargain. The prices we are paying is because of sheer SPECULATION. If you do the math, a barrel would be back to $54 per barrel without all of the "freaking out speculation" tacked on. People are making money, but they are the ones with the oil fields in their deserts, not the big oil companies.
 
Actually oil cost about and I say about 3.25 a gallon right now. Only 42 gallons in a barrel of oil. As far as us taking oil from other countries like Canada there is more to the story. I know for fact we are refining oil that is turned to gasoline ect... and being shipped into Canada.

Oops some people type faster than I do. [:I]
 
Actually, I am changing my habits and dependency. I'm selling my truck because I can't afford it anymore. I'm not the only one doing this. It cost me $640 to fill it up.

So after I sell my truck and all the other guys/gals sell their trucks, we can listen to you and the rest of the world complain about the cost of EVERYTHING else. How do you think you get all the things you need for daily life? It comes on a truck. It is already affecting the cost of most everything. Soon, you will not only be unable to afford the gas to get to the store, but once you get there, you won't be able to afford that stuff either. It is already happening. It will suck to be hungry!
It won't be long and winter will be back. Are you prepared to pay your heating bill this year?[:0]
It's not just about the cost of gas. It's about what it has and will continue to affect.

We are past recession, we are heading to a depression.
 
PLEASE REMEMBER:

NO ONE TAKES ANYTHING FROM ANYWHERE!!!!

We BUY, YOU (the owner) SELL.

Optionally, YOU can KEEP. We will BUY somewhere else, or do without.

A seller perceives the value of the money he is getting to be equal or greater than the VALUE of the commodity he is selling. Even Venezuela SELLS oil to interests in the USA. It sure is NOT because they LIKE us. They LOVE our MONEY, which then becomes THEIR money.

Commerce makes STRANGE bedfellows.
 
Wow, collective pile on the ol' Canadian! :) Hope I didn't offend anyone!

As far as being invaded, Ed, I can honestly say I sleep soundly at night. There are very few areas of the world in which Canadians are not welcome...the only reason to invade us would be to plunder our natural resources (and we just give those away! [:p] But enough of that...

Yes, I'm prepared to pay my heating bill - it's hydroelectric, so much cheaper than oil. I don't know anyone in the area that uses oil, actually, so I don't know what the price of that would be...

But I guess I was out of line (although I fail to see how thus far)...I was merely suggesting that complaining alone does nothing. I've always had a very laid back mentality with regards to change (I'd have been a terrible hippie!) - strive to change the things you can, and accept those things you cannot...

Complaining about it is nothing more than venting...which is fine, I suppose, but not really productive in the end.

As far as the people with "oil fields in their deserts" making money (and I hope I don't get attacked for this), I'm very happy for them. What else do they have? Should they have to live in a perpetual stone age because those of us with privilege don't want to pay the price the market dictates? What has finally happened is that the rest of the world is catching up with the West in terms of industry, and demand is catching up with supply...the solution? Switch to different fuels? Halt urbanization? Not sure!

I don't know the answers, but I do know that I don't have them. All I can do is pay what is demanded of me at the pump, and try and save in other ways...

Again, not trying to be antagonistic; I'm just stating my views!

Have a great day!
 
Dozer,

When you SELL your truck, someone else will BUY your truck. What wiil they do differently, to make it profitable????

What will YOU do to make a living?

The grass is always greener, until you jump over the fence. You changed the angle of the sunshine! It's really the SAME green.
 
Originally posted by DozerMite

The price of gas just jumped to $3.99 for 87 octane.
Just heard on the news that they expect crude to go over $200 a barrel by next year. That would make gas over $7.00 a gal. All the while the oil companies are reporting $3.6 billion profits in three months.

I guess it's time to set the lathe up to drill for oil...
Click to expand...
Not sure where you got your number (3.6 billion) from, but Exxon alone had over $11 Billion in the fourth quarter 2007 and well over $10 billion in the first quarter of 2008!!
 
Andrew (Maxwell),

I don't MEAN to attack YOU!!! However, I will voraciously attack your ideas and statements! NO harm meant to YOU.
 
Thanks for the clarification, Ed! I've a thick skin anyway!

Just found an interesting fact, actually...apparently Canada exports 2 million barrels of oil per day into the US...how much does the US actually consume? Just curious, but I didn't know the oil sands produced THAT much, or that the market in the US was quite THAT demanding...

Oil exports into the US per day in 1000s of barrels
CANADA 1,727 1,920 1,863 1,780 1,825
SAUDI ARABIA 1,535 1,614 1,541 1,216 1,325
MEXICO 1,232 1,231 1,220 1,621 1,475
NIGERIA 1,138 982 1,097 1,290 1,156
VENEZUELA 858 945 980 1,036 1,033
IRAQ 773 780 697 523 464
ANGOLA 375 341 429 696 570
ALGERIA 232 191 264 501 484
ECUADOR 231 169 217 191 214
BRAZIL 188 169 175 209 174
KUWAIT 178 261 225 288 208
COLOMBIA 120 220 169 108 107
RUSSIA 108 80 68 193 92
CHAD 101 89 103 66 74
UNITED KINGDOM 95 60 80 77 90
 
Lets not just get off on the oil companies.The government,banks,power producers and the rest of big business is giving it to us dry. Look at the price of produce in your local supermarket and ask a farmer how much he is getting for same.aaaaaaaaaaaaaaaaaaaaaoil the same way, ask any arab to show you his millions. his pockets are just as empty as the farmers. The consumer dictates the price . If we dont buy, the price will go down.Let everyone not buyexxon and shell, see how soon we will have a price war.Up here in canada I will walk past a petro scam station rather than buy gas there.
 
Ed,
More than likely it will just sit on the lot. It is not profitable for the independent contractor with the costs. After the fuel, $1M liability insur., maintenance, plates, tolls, and pull in fees, it costs ME money to make a delivery. That doesn't even include the cost of food, lodging, or health/medical insur. of which my wife and myself do not have. Just another thing that is unaffordable, but that is another bowl of beans.If I get rid of it, I can lose about $1500 a month to own it and it sit in my drive.

As for making a living, I'm in an industrialized area. Should be pretty easy to find a job, probably not well paying, but I should be able to get by. And have insurance for my wife and I.

I'm not looking for greener grass, I would just like to keep the grass I have.
 
Sorry I am quick to defend large oil companies. It is how I make my living. I just remember the days when we were recording losses and no one came to help us. Yes even though oil is my living I am trying to change as well. I am currently looking at trading my truck for a small car, possibly a hybrid. Problem is they make them almost unreachable for a working man in price. My current experience in buying my daughters civic I was actually told by 2 different dealerships the price on the window is the price period. They are in such high demand they don't have to deal on them because someone will come along behind me willing to pay it. The gas saving cars aren't being produced as fast to keep up with demand right now.
 
Andrew,

The US consumes approx. 23mil barrels a day, 69% of which is transportation. We are the largest consumer, followed by Japan.

The USA has NO excuse (IN MY OPINION!!!). WE are the innovators of the universe, WHY did we not see this coming and DO something before now??? We HAD nuclear power and DROPPED it -- cause it made the "greenies" uncomfortable. Meanwhile, Chernoble wiped out a large population, but Russia continued to USE nuke, while they SELL oil.

Most Americans don't EXPECT other countries to help solve OUR problems. In this case, we did a LOUSY job of anticipating. BUT, as we need to spend more on necessities, the rest of the world will encounter a substantial drop in consumption. So, again, the AMERICANS will be the bad guys --- for NOT buying ENOUGH ---- instead of for LIVING IT UP, which has made us the BAD GUYS in the past.

When you are the biggest, you make the BEST (and easiest) target!!!
 
Personaly I would like to see a lot more small hydro-electric for local supply. Here in New England we have a TON of old mill towns that ran on hydro power, most all still have the mills in place. We are trying to start one mill back up to to convert to hydro-electric. What is the hold up? Yep, 100 years of freaking river studies so we can ensure the swamp grass will survive and the mosquito popluation stays the same. (OK, I am making that up, it might just be 50 years..) [:eek:)]

Wind & solar are very dependant on the weather. For the most part, Hydro runs 24/7 on a good river. It is a shame it just sits there with dams and infrastructure in place already. :(

http://putnamgreenpower.com
 
Anybody here think we should keep our aid money here, keep our food here, keep our jobs here, keep our soldiers here, keep our nuclear fuel here, keep our weapons here, and learn to live with the resources we already have? Just a thought...
 
My beleif is that all the "Average Joe" can do about the price of gas currently is make every attempt to ease your dependency on gas. Personally, I bought a motorcycle, and significantly reduced my commute when I got a new job. I grocery shop no more than once a week, and usually combine trips to Home Depot, Fishing, etc. because those are the only times I use my Truck. I used to spend about $300 a month on gas, no I've reduced that to maybe $60, and I hope to go lower even when I eventually buy a new vehicle. I hope to wait until there is a decent plug-in truck available, if mine can hold out that long.

Reduce fuel usage, reduce polution, demand higher efficiency and demand alternative sources, nuff said.


(somebody needs to take my soapbox away from me when I'm drinking beer...[:p])
 
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Originally posted by livertrans

Lets hear from our overseas members. what do you pay for gasoline and is your price per litre on the increase?
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It is rather interesting to see people in America that worked up about the cost of petrol or gas as you call it. On every visit to your country I have been amazed at the low cost of petrol compared to other countries I visit. This is in large part due to low taxes put on petrol by your Federal and State governments, as I understand it.
This low cost, although great for the recipient, has fostered a rather easy going attitude as to how much you use, hence your very large cars, SUVs and the like. Now that the cost of oil is going through the roof, Americans are finding out that driving a F250 or F350 mega V8 is hurting the back pocket, people in Europe and other places learned this years (decades?) ago, so they drive little 4 cylinder cars but still get to the store and go on holidays.

Having said all that, here in Australia, we tend to drive what you guys call medium size cars, lots of V6 Ford and GM cars, as well as V6 Toyota Camrys Mazda 6 etc. There are also a lot of small 4 cylinder cars, mainly as second cars. Our government taxes are about $A0.55 per litre, which cost a total of around $A1.45 per litr. Now there are 3.8 (roughly) litres per US gallon, so we pay about $A5.51 or $US5.73 per US gallon. European prices would be about 40-50% above this.

So I have taken a more logical approach to transportation, my V6 (3.6litre) GM car is dual fule, petrol/lpg, lpg being direct injected same as petrol. Because we have oodles of this stuff and sell it to Japan and China for next to nothing, the government in its' wisdom doesn't tax it so I pay $A0.64 per litre and get 8.8km/ltr around town and 10.5km/ltr on the highway. Say average 9.6km/ltr, so a km costs me 6.7c, or $US0.11/mile.

I filled up my LPG tank yesterday, cost me $A40 and I had covered 590km in 2 weeks.

Expensive oil? Nah, cheap (LPG) gas!

Oh and to further sweeten the deal our government subsidises LPG installations on cars to the tune of $A2000, out of a total cost of around $A3000.

My car came from the factory with LPG already installed.
 
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