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Rookie Author
Salt Lake City

Joined:Jan 2013
Message Posted: May 8, 2014 10:06:19 AM

we live in a global economy where we in the united states cannot control our own "destiny" fuel prices, stock markets, etc. something clear around the world with a hiccup causes drastic changes everywhere else on this earth. i suppose if the u.s did not export a good portion of the oil produced in the u.s to other countries i suppose our prices could be a little bit less, but i am not a economics major, and even so the oil companies is going to send their oil where they can get the highest price, right?
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Champion Author Cleveland

Joined:Aug 2004
Message Posted: Jul 12, 2014 9:38:53 AM

Catfish99, you have a GREAT point.

Who screams that Apple is making billions? Who is cranky that Microsoft tallies billions in profit each quarter? How about Walmart or Macy's?

The SIZE of the corporation should tell you that they will make billions. Look at the marketshare these companies control. That should tell you the level of their profit.

The corner bar is one of 20 in a city, perhaps. If all the bars in a city of 25,000 people make $100,000 over a year, that means each bar would average $5,000 (basic math). If the corner bar wipes out 1/2 of it's competition by buying them out, the corner bar with 10 locations makes $50,000.

Blow that up to national or worldwide and oil companies, gas refineries, and wholesalers. Do you get the point now? The number of customers has increased exponentially and the profits are still a percentage of the business, but with 335 million customers instead of 25,000, you have to multiple bigger numbers (and probably need a calculator!).
Veteran Author Vancouver

Joined:Apr 2005
Message Posted: Jun 22, 2014 8:56:59 PM

Catfish is either delusional or has oil shares. Now is not the time to defend the oil cartels.

Just the other day in our local tv media, oil analysts commented that there is absolutely no reason for the current spike in prices. Oil production is fine, there is no shortage, prices have not risen from the source.

Basically, the public has to wake up and go on the "attack" and demand intervention. The oil cartel look for any excuse available and even imaginary to raise prices and to increase their profits.
Champion Author Wilmington

Joined:Sep 2005
Message Posted: Jun 19, 2014 7:34:46 AM

Just because companies make billions does NOT mean you are being ripped off. In fact it is quite the opposite.
First, consider the investment of capital in refineries, drilling equipment, transportation, etc. The big oil cos have hundreds of billions invested to build the company. Their return on investment is much lower than a Microsoft or a Starbucks with less capital need. So in order to get investors and continue to operate, they need to make at least an average profit. And the profit is that, fairly average for a large company.
ExxonMobil breaks down where their profit comes from in the annual SEC filings. Almost all of it comes from overseas. Domestically they make about ten cents per gallon on "downstream" operations - refining and selling oil products. So if they worked for free, with no reinvestment, they would drop the price of gas about a dime.
Finally, because they are so large economies of scale occur, making gas cheaper than if there were many small companies duplicating efforts. Big Oil actually means cheaper gas, not a ripoff.
Champion Author Orange County

Joined:Feb 2011
Message Posted: Jun 18, 2014 10:35:39 AM

Considering the oil companies yearly profit is in the billions I'd say we're basically getting ripped off...but I guess that's Capitalism; an economic system in which trade, industry, and the means of production are controlled by private owners with the goal of making profits.
Champion Author Virginia

Joined:May 2004
Message Posted: May 15, 2014 6:09:50 PM

>>i suppose if the u.s did not export a good portion of the oil produced in the u.s to other countries i suppose our prices could be a little bit less,...<<

According to EIA, during February 2014 the U.S. produced just under 225 million barrels of crude oil. During the same period, the U.S. exported 6.7 million barrels of crude oil. That's 3% of domestic production exported.
Champion Author Alabama

Joined:May 2008
Message Posted: May 11, 2014 7:26:38 AM

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