Agreed. However, the govt. giving up taxes isn't a control in my book.

tommykat, see above. THAT'S effective. He's reducing his demand, not just delaying it.

they are controlling my wallet! :cuss:

I guess I should at least compliment you. It was summarized and written well. It was also very easy to understand.
I don't deserve it.

Making 10% on $80 is really no better than 10% on $40. It can be argued that 10% on $80 is significantly higher risk. It's double the income, but it's at least double the risk.

The oil companies don't always run in the black. They frequently run at a loss because their margins are so thin.

Yes. I'm nice like that.


Carry on.

The oil companies do benefit from higher priced crude. It doesn't cost any more to refine a barrel at $10 a barrel versus $70 a barrel. So, their costs remain stable despite crude pricing.

As to their profit margin, it has fluctuated between, well, -10% to 10% now. The oil companies have lost billions in the past. Of course, no one remembers that fact. When oil was $15/barrel....

Really? That surprising. I had a few drinks over dinner tonight, and I'm more than a little tipsy.

Perhaps you should try harder?

BTW Simplex a tax is a form of Govt control but I understand what you are trying to say as in regulation

Yeah, what he said.

Perhaps.

Not that I doubt you, but I have to wonder how they could lose money selling a product that most of us can't do without. How many years ago are you talking? Also, how did they have losses comparable to today's profits when they were paying $15 PB? I'm assuming that the crude is their greatest cost, is that correct? Or does getting it here and refining it cost more? It just seems like if they were losing money it was probably their fault. But again, I don't know jack about it, I'm just making some general assumptions.

Sorry for the confusion. I'm probably talking too much about refining, since it relates directly to gasoline pricing.

Oil companies also, of course, also drill for crude which they then sell on the open market. Say they have a field that they've been producing from for some time. They've already invested the capital (rigs, drills, etc) to produce from that field. So, say the price of crude is at $15/barrel. Their costs exceed that. However, now say that crude is trading at $70. As you can see, the profit then becomes considerable.

I don't remember the exact timing of the last bust, but I believe it was in the late 80s and early 90s.

Ok Donger, that helps me. Yes, I recall the 80's oil bust. Where I'm mixed up is that I always thought the Middle East oil was probably extracted by the Arabs and then sold to American companies. I figured we were only pulling our own oil out of the ground. So yes, it's understandable that if it cost them more to get it out and then to market than they could sell it for that would be a problem and I can see how that could easily happen.

Still, it's hard to imagine that those losses could come near the profits they are seeing now. But on the other hand, they obviously have no idea how long they'll be able to ride this wave and would want to earn every dime they can now.

This issue is hard for me, being a left leaning Libertarian capitalist with an inherent distrust of Big Government and Corporate America. I gots no problem with folks making money but at the same time I smell some rats.

Like they say, follow the money.

http://money.cnn.com/2007/05/16/news...ex.htm?cnn=yes

Gas prices hit record for 4th day

AAA's average for a gallon of regular tops $3.10 for first time, the fourth daily record high in a row; more price rises seen.

NEW YORK (CNNMoney.com) -- Gasoline prices hit a record high for the fourth straight day Wednesday, according to AAA, and more records could be on the way.

The motorist group said the average price for a gallon of self-serve unleaded gasoline rose to $3.103 in its latest reading, which is based on a daily survey of purchases at up to 85,000 gas stations. That's up from Tuesday's record of $3.087 a gallon. Prices are now up 2.3 percent in just the last week and 8.6 percent over the last month.

Before Sunday's record, the highest price ever recorded in the survey was $3.057, which was set Sept. 4 and Sept. 5, 2005, after Hurricane Katrina disrupted refinery operations and pipelines and caused a spike in prices. But on Sunday prices topped that mark for the first time, hitting $3.064, followed by $3.073 on Monday.
6 ways to lower gas prices

California had the highest average price, with a gallon of self-serve unleaded costing $3.474 in the latest survey, although that was off of Tuesday's reading of $3.478.

South Carolina had the cheapest gas, but it is also creeping toward the mark of $3 a gallon with an average price of $2.853, up from $2.838 on Tuesday. Thirty-three states and the District of Columbia now have average prices at or above $3 a gallon, with Kentucky, Florida and Maryland crossing that threshold in Wednesday's reading. Pennsylvania, at $2.992, and Massachusetts, at $2.986, are poised to be the next to join that group.

The Energy Information Administration's weekly survey of service station prices also found Monday a new record high of $3.10 a gallon for unleaded. That was up 5 cents from a week earlier and up 16 percent over year-ago levels.

And there's likely to be more price increases ahead, according to EIA chief Guy Caruso.