What Oil ship sank??

[83burban]

The price we pay at the pump is affected by much more than just the oil companies raising prices. The real reasons for the inflated prices is because of speculation on the price of oil (which sky-rockets when investors believe that their will be a disruption in the flow of oil into refineries).

Since the demand remains constant, disruptions in the supply will cause the price to jump. The reality is, that even though the supply of oil to the US will be marginally impacted, the PERCEPTION of the market is that the supply will fall and the price of crude rises dramatically.

Since the actual supply is not affect, the oil companies output remains flat - but since the speculation rises prices for the crude the cost of a gallon increases; even though the production remains constant. This means that the Oil Companies are using the same amount of oil but the price of the oil increases on the consumers side.

The record profits by many of these oil companies is the result of reduced costs on the part of the refineries and the increasing prices. Oil companies have to raise prices in relation to the market.

I do not work for the oil companies, just pointing out the reality of the situation and the markets. OPEC plays a major role in this, since they actually can affect the supply and cause prices to jump as they want.

[83burban]

Basically, the oil companies are pulling the same amount of crude out of the ground since production in Libya has little impact on US prices. They charge the consumer based on the market price, which as said earlier is determined by the perception of the supply being affected. The higher the market price, the greater the profit (since it costs the same to produce a gallon of gas regardless of the supply).

As a side note, even though we do not receive much crude from Libya, other countries do. And they will look elsewhere for oil to fill the void produced by Libya- thus this puts a pressure on the price of US oil, since we are not competing against other nations who are demanding oil from our partners.

Again, the cost of producing the oil doesn't change, but the market price does - and that is what is passed to us.

[kingsolver72]

My point is perhaps OPEC would be a non factor if the U.S. could drill in our own country and off our own shores like other countries do....
It is what it is...could be worse.

[83burban]

Kingsolver73 - That is entirely true, but that is a political issue not one against the oil companies. Oil companies would much rather have domestic oil drilling - since it would reduce their costs significantly and increase profitability.

Of course, they would have to do it in an environmentally friendly way, and that would raise costs - but overall - if our government would allow domestic drilling we would not have these price fluctuations resulting from conflict in the middle east and other geopolitical unrest, so even though the price of oil may remain close to what it is now - the fluctuations would not occur with the same effect

[67ChevyRedneck]

Originally Posted by Dooley

There's some "selective memory" practice going on in the US today. It was less than 3 years ago, May 2008 when gas/diesel prices were much higher than they are right now. Diesel was over $5.00 a gal in many parts of the USA. I was paying $4.89 locally. Gas was over $4.00 also.

I sure haven't forgotten!!! I know damn well it played a major role in the "crash" of our economy. It was a great big cluster F waiting to happen, and oil prices pushed it all over the edge, and the house of cards fell.

IMO, our economy is currently too "fragile" to support high oil prices.

[N2TRUX]

Religious and political posts are not allowed on the forums. This rule has been in effect since June, 2005 as seen here . Please refrain from creating political or religious posts.

[68C15]

Originally Posted by kingsolver72;4512681Thats not counting other sources such as Alaska,N. Dakota,[B

S.Dakota[/B](Bakken)

wait, what?!
maybe I should start drilling in my back yard? wouldn't that be a hoot?

[Dooley]

OPEC has nothing to do with oil company executives retiring with $141,000.00an hour pensions plus benefits.

http://abcnews.go.com/GMA/story?id=1841989

[kingsolver72]

Originally Posted by Dooley

OPEC has nothing to do with oil company executives retiring with $141,000.00an hour pensions plus benefits.

http://abcnews.go.com/GMA/story?id=1841989

I didn't read the link but,why do you care how much an executive retires with?

[Liz]

fuel prices suck, we need fuel to drive etc..., life goes on, breaking political discussion rules on a message board won't change a thing, the end..