Who/What is to blame for soaring gas prices?

[William769]

[porphyrian]

1. Oil companies. They are making record profits by gouging everyone else. - n/t

[The_Casual_Observer]

2. William, it's all of the above.

And, apparently nobody is willing to do anything about it either.

[William769]

6. Actually I voted for the U.S. Government.

They are the one's allowing the oil companies to screw us. At least thats my thinking.

[Homer Wells]

14. Pretty much the same thing, isn't it?

Oil Companies= U S Government
US Government= Oil Companies

And so it goes.....

[William769]

15. Well you got me there.

[Subdivisions]

3. You forgot to include

Peak in oil production and Decline in Oil Production

[Maven]

5. Ditto.

Amazing that this still isn't being acknowledged and that people discuss high oil/gas prices as though there's some entirely man-made cause and rising prices are temporary.

[AndyTiedye]

18. But That Doesn't Explain Why Gas is Up While Crude is Down

Not to deny the reality of Peak Oil, but it's not the primary cause of *this* runup of gas prices.

This year, they are working on Congress to get the right to drill for oil just about everywhere.
High gas prices make it easier for them to make this case.

Last year was the runup to an election. Prices went down to help the Repiglicans.

[gravity]

23. The price of oil is the biggest factor

but the current increase in prices is due to refinery problems. It could be caused by price gouging, but more than likely it is from real problems, since each refinery thats shut down is a lost in profit opportunity for individual companies.

[Maven]

24. The price of crude oil is not down over the long haul

Maybe it's ebbed a little in the last few months, but it's over three times higher than what it was 8 years ago:

http://futures.tradingcharts.com/chart/CO/M

That's not to say there isn't room for fiddling with the prices elsewhere in the supply chain--and I wouldn't be surprised if said fiddling were politically motivated--but that's not the big picture.

[Selatius]

10. Yeah, people forget the effects of Peak Oil a lot.

[NickB79]

16. Yep

The claim that the oil companies are responsible by simply shutting down old refineries and not building any new refineries misses the bigger story. WHY would oil companies build new oil refineries if 5 yrs from now there will be LESS oil on the market than there is today? It wouldn't be cost-effective for them to spend billions on refineries if those refineries are just going to sit idle without product to work with.

Cheap fuel is as dead as the dodo.

[LSK]

22. not in this case, the price of oil is down from recent years

[Maven]

25. It is slightly down over certain periods in 2006

It is by no means down "from recent years." Please see my post above.

[LSK]

31. and down from periods in 2005

The facts are that the price of gas has risen much further and not in proportion to the price of oil futures.

It closed at 65.65 today http://finance.yahoo.com/q?s=CLN07.NYM

Gas has NEVER been this high, not even close.

This is about refinery capacity, growing international demand and Oil Company profits.

[meow2u3]

4. Oil companies are holding back production of gasoline

either by telling Bush and Cheney under the table not to release oil from the strategic oil reserve and/or deliberately shutting down refineries to drive up prices. The rampant mergers have given them disincentive to keep refining capacity up.

All this bullshit about the malfunctioning refineries are but a flimsy excuse for price gouging. This is theft, pure and simple.

Gas prices should average about $1.50 a gallon.

[flpoljunkie]

7. Refineries have been shut down to keep down the supply and drive up the price.

Yet no media talking head will ask any oil analyst how many refiners have been shut down. The last figure I heard was 15!

Many oil companies now own their own refineries, as well.

[Initech]

8. Oil companies shutting down refineries and artificially driving up prices.

They deliberately took a page from the Ken Lay playbook. Of course, the main difference between Big Oil and Ken Lay is - Big Oil has yet to get caught.

[Maven]

9. A good article from The Oil Drum about why the story is more complex than "gouging" by oil cos.

http://www.theoildrum.com/node/2571

It's a worthwhile read.

[gravity]

11. Great read

The price of gas is set by many forces and there isn't just one factor that is responsible for all this mess.

[moobu2]

12. It’s the Bush administration working in unison

With big oil companies.

[in_cog_ni_to]

13. Since Exxon Mobil made $1,146 per SECOND ...PROFIT in 2005...I have to say it's the OIL Companies.

It's OBSCENE! How much money is enough?


Exxon Mobil sets profit record
Nation's No. 1 oil company reports larger than expected jump in 4Q income to cap record year.
By Chris Isidore, CNNMoney.com senior writer
January 30, 2006: 2:41 PM EST


NEW YORK (CNNMoney.com) - Exxon Mobil Corp. set U.S. records for annual and quarterly profits Monday as it easily topped fourth-quarter earnings forecasts.

The nation's largest oil company reported net income in the fourth quarter of $10.7 billion, or $1.71 a share, compared to $8.4 billion, or $1.30 a share, a year earlier.


Gas price spike longest on record
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Cheapest gas in the nation - full service
Excluding items, Exxon Mobil (Research) earned $10.3 billion, or $1.65 per share, topping a consensus forecast of $1.44 a share from analysts surveyed by earnings tracker First Call. It also topped the record for quarterly profits it set in the third quarter, when it earned $9.9 billion.

Shares of Exxon Mobil gained 2 percent in early-afternoon trading, helping to take the Dow into positive territory.

For the year the company earned net income of $36.1 billion, or $33.9 billion excluding special items. That's up 31 percent from the $25.9 billion it earned on that basis year earlier.

Exxon Mobil's 2005 net income for the year comes to $1,146 a second. That per-second profit is enough to pay for gas for the average American vehicle to be driven 10,294 miles, at current gasoline prices.

http://money.cnn.com/2006/01/30/news/companies/exxon_earns/

[Tara_NM]

21. 100% agree

The oil companies have (imo) a free pass from the White House to charge whatever they please. I believe Bush and Co. are skimming the cream of the profit tops of Exxon and other major oil companies.

[gravity]

26. They make their profit because market prices are higher

Oil is sold on a market, and when the market price rises, oil companies get more revenue for the same input cost, hence greater profits.

Profits aren't evidence of gouging

[gravity]

17. The markets n/t

[LSK]

19. lack of Refineries

Oil Companies shut down many and have not invested in them in years.

[NickB79]

27. No point in investing in them

5 yrs from now, when oil production has fallen from today's levels, there won't be anything for new refineries to refine.

[LSK]

28. then why is Saudi Arabia building them?

http://archive.gulfnews.com/articles/07/04/25/10120550.html

[gravity]

29. If we can't build them in the US

Someone else would will do it

[LSK]

32. point being the Saudis wouldnt invest in refineries if oil has no future

They should know better than anyone.

[NickB79]

34. Because after Peak, refined products will be even more valuable

And because the local demand for gasoline and diesel is skyrocketing across the Middle East as they are seeing a boom in the number of vehicles on the roads there. Remember that even after Peak, Saudi Arabia will still be producing millions of barrels more oil per day than they consume, and will still have the ability to meet their own demands and sell what's left to the highest bidders (probably China). Locally refined petroleum products will add even more value to an already valuable commodity.

One reason to believe a lot of that refined product will be used in the Middle East and not globally is acknowledged here: http://www.edmunds.com/advice/fueleconomy/articles/105512/article.html by this paragraph:

"In his book, Deffeyes suggests that the peak is occurring now (he says official USGS studies have placed the peak in 2036). The oil companies aren't saying much one way or the other. But for circumstantial evidence, Deffeyes points out that no new oil refineries have been built since 1970 and giant oil tankers are being retired without replacement. Perhaps the oil companies know more than they are letting on; they won't invest in refineries and ships they won't need."

So, few new tankers are being built as well as few refineries outside of areas that still have substantial oil reserves, despite global oil consumption predicted to increase by many millions of barrels per day in the next decade.

[shenmue]

20. The Saudi monarchy.

:grr:

[HysteryDiagnosis]

30. Thermals generated in the boardrooms of the key players,

there is plenty of hot air being dispersed therein to get anything soaring and keep it there.....

[Crunchy Frog]

33. I saw an LTTE the other day saying Democrats were to blame.

Something along the lines of "Hope all you people who voted Democrat are happy with the soaring gas prices!!!111!". :crazy: