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Author Topic: Oil production booms, demand drops, prices stay high: Why? Back to Topics
krzysiek_ck

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Illinois

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Message Posted: Aug 3, 2013 12:45:11 PM

"The world is awash in oil and the U.S. recorded its biggest increase in oil production last year. Oil demand is down, mainly due to high prices and the weak economy, but also due to huge gains in energy efficiency.

Yet oil prices remain high. Why?

That’s a conundrum energy economists are struggling with, says BP’s chief U.S. economist Mark Finley. If supply is up and demand is down, price ordinarily would fall. It isn’t happening, though.

“It’s a key question we’re facing, and we don’t really know the answer,” Finley said."

Oil production booms, demand drops, prices stay high: Why?

In my opinion the answer is rather easy. Big Oil Greed.

RFS, RINs, food prices, engine problems are only a diversion to steer the conversation away from where the actual problem is. The problem - Big Oil Greed.

"Last year (2011), the five biggest private sector oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell Group — made a record $137 billion, and every additional penny they charge at the pump increases their profits by $200 million dollars per quarter. Yet each year Big Oil receives billions of dollars in taxpayer subsidies. The Repeal Big Oil Tax Subsidies Act eliminates these unnecessary subsidies."

S.2204 – THE REPEAL BIG OIL TAX SUBSIDIES ACT

[Edited by: krzysiek_ck at 8/3/2013 12:49:41 PM EST]
REPLIES (newest first) Post a Reply
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stinkyme
Rookie Author Massachusetts

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Message Posted: Sep 6, 2013 10:53:29 PM

very keen observations . Gas is more in the north east. They blame the reason for this as lack of proximity to distribution locations, however northeast has ports that are used. So again the shell game. Certain states are seeing much lower costs. But the oil companies are not mandated and/or held accountable to speak truth...
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bluenvoy
Champion Author Nashville

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Message Posted: Aug 11, 2013 11:37:24 AM

Prices are inching down here now.
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forresj
Champion Author Wilmington

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Message Posted: Aug 11, 2013 8:53:44 AM

Not many people realize this but it only costs a couple of bucks to pump a barrel of oil out of the ground. But oil companies are making at least $100 a barrel.

[Edited by: forresj at 8/11/2013 8:54:08 AM EST]
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krzysiek_ck
Champion Author Illinois

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Message Posted: Aug 9, 2013 9:17:24 AM

I agree goldseeker, yet we still have a lot of people very confused about this simple concept.
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goldseeker
Champion Author West Virginia

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Message Posted: Aug 6, 2013 3:07:15 AM

Nothing unusual here.
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darwinfinch
Veteran Author Gasbuddy

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Message Posted: Aug 5, 2013 10:50:25 AM

Also note how the beef/poultry/food companies in 2011-2012 complained that ethanol was raising the price of corn, and so the price of food went up. Now in 2013, corn is back near $4/bushel and the food prices are climbing still.

HINT: Only 11 cents of what you pay for a box of corn flakes can be attributed to the price of corn. The price is largely based on oil prices, packaging, and marketing. The CEO of General Mills admitted as much in a public statement.
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darwinfinch
Veteran Author Gasbuddy

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Message Posted: Aug 5, 2013 10:46:47 AM

Prices are high and growing because there is no competition in the marketplace except for biofuels, which are really the only thing keeping gasoline from heading toward $6/gallon.

Even if consumption is down, the consumption levels are not flexible. The quantity of demand is not as important in raising prices as the strength of demand, which is not very flexible. Trucks need fuel to ship products, etc.
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GrumpyCat
Champion Author Alabama

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Message Posted: Aug 5, 2013 9:57:44 AM

Prices will remain high so long as producers believe consumers will not increase consumption if prices are lowered.
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Floridaman2013
Champion Author Florida

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Message Posted: Aug 5, 2013 7:47:50 AM

Have remove banks from investing in future commodities. They are killing us.
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pawnkingfour
Champion Author Georgia

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Message Posted: Aug 4, 2013 10:48:02 AM

WHY? Its the do-nothing Congress effect!
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Banjoe
Champion Author Winnipeg

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Message Posted: Aug 4, 2013 9:47:15 AM

Invest is oil stock and share the wealth, folks.
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Boyrr
Champion Author Allentown

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Message Posted: Aug 4, 2013 9:44:12 AM

Greed
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forresj
Champion Author Wilmington

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Message Posted: Aug 4, 2013 9:00:54 AM

Market manipulators are keeping prices elevated.
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SilverStreaker
Champion Author Twin Cities

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Message Posted: Aug 3, 2013 6:04:40 PM

Wow, they didn't blame it on ethanol?
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