Big Oil Is Gaming the System to Keep Domestic U.S. Prices High

[NeoConsSuck]

Here is a good read:

The U.S. Is Now EXPORTING Oil, But the Oil Companies Are Gaming the System By Switching To a Different Benchmark to Keep U.S. Oil Prices HIGH … And the Keystone Pipeline Will Create Even HIGHER U.S. Prices


Leah McGrath Goodman – who has written for the Financial Times, Barron’s, The Wall Street Journal, Forbes and Fortune – notes that the U.S. is now an oil exporter, but that Americans aren’t getting reduced oil prices because the oil companies are now pricing the oil according to European metrics:

The U.S. is now selling more petroleum products than it is buying for the first time in more than six decades. Yet Americans are paying around $4 or more for a gallon of gas, even as demand slumps to historic lows. What gives?

***

Americans have been told for years that if only we drilled more oil, we would see a drop in gasoline prices.

http://www.ritholtz.com/blog/2012/05/big-oil-is-gaming-the-system-to-keep-domestic-u-s-prices-high/

[liberal N proud]

1. We have suspected this for years

Why is it not investigated by the Justice Department? or Congress?

Oh, I know, they are getting paid not to, at least Congress is.

[Edweird]

2. Am I the only person that remembers W talking about 'artificially low gas prices'?

They told us they were going to jack up the price of gas. Then, they did it.

[rurallib]

6. I remember him saying that anything over $30 a barrel

was outrageous and he wouldn't stand for it.
Then I think Cheney told him who was in charge

[Warren Stupidity]

3. Global market determines prices.

So, even as we drill for more oil in the U.S., the price benchmark has dodged the markdown bullet by taking cues from the more expensive oil. As always, we must compete with the rest of the world for petroleum – including our own.

The giant economies of Europe and Asia and their demand for oil are part of what sets the market price. This isn't some nefarious scheme. However the drill baby drill liars should suffer consequences for so blatantly lying to the American people.

We are in the era of global essential resource scarcity. Oil is but one of many such resources. It will only get worse. No serious efforts are being made to restructure our economies to live within the planet's capacity to sustain us.

[hack89]

4. Until recently WTI has always been priced higher than Brent

the shift to Brent is not a US issue - WTI use to be a global index. Wall Street switched to reflect how the global markets are now pricing oil

[pampango]

5. Canada exports lots of oil and their gas prices are higher than the US (at least last year

when I visited Ontario). You're either part of the world or you're not.

[uponit7771]

7. +1

[eallen]

8. First, the US is NOT exporting oil....

We import about 60% of the oil we consume:

http://oilprice.com/Energy/Crude-Oil/Why-the-US-is-Not-About-to-Become-an-Oil-Exporter.html

The US recently did become an exporter of oil products. In other words, we have enough refinery capacity to produce gasoline and other refined products not just for domestic markets, but also some for foreign markets. That says nothing about net oil production or consumption.

Second, if you think there is some trickery keeping gasoline prices high in the US, compare them to gasoline prices in most other nations.

[Duer 157099]

9. I thought that high gas prices in other nations

was due to the associated taxes, which their citizens get back in the form of social services (like health care). No?

[Spider Jerusalem]

10. Partly. Petrol is the equivalent of US$8/gallon in the UK in part because of taxes.

Remove taxes from the equation and the underlying baseline cost per gallon is pretty much equivalent everywhere in the industrialised world. The UK price per gallon, less fuel duty and VAT (taxes) works out to about US$3.30 a gallon at current exchange rates, which is more than the wholesale cost per gallon in the US.