Strangely the oil price drops near an election. The last price drop that held a while was when the oil execs were testifying in front of congress. pure coincidence.
Bush oil exec
Cheney oil exec
Rice oil exec tanker named after her
don evans at commerce Tom Brown oil exec
Brodman energy oil exec
Khalizad unical exec
Griles interior oil man
Yes I believe it is worthy of skepticism.
That’s not the only way they make money. From Palast’s book, cited above:
All right, I’m afraid I still don’t get it. Apparently, according to some of the posters here, the Republican administration, by some mechanism no one seems to be able to coherently describe, are artificially raising crude oil, or maybe gasoline, or maybe both, prices, then just as artificially lowering them again, so that we’ll all vote Republican in November. You know, for the guys who so recently raised those prices to begin with.
So the main proposition of these posters is that we all have the memories of goldfish, apparently.
Again, OP? Gonzomax? Bueller? Anyone? How, exactly, are these prices being manipulated? If you are unable to clearly articulate a plausible mechanism for widespread price-fixing of either crude or refined products prices, as seems the case, I’m afraid I must remain rather skeptical myself.
Lets not forget that Oil is used for more than gasoline. They make a killing off plastics, jet fuel, kerosene, and many of the other products that sell worldwide.
**Might as well not try to convince the conspiracy nutters, not worth the time though, they want to really believe in something to make life interesting, and no amount of reasoning will get through the constant fingers in the ear and the “Na Na Na Na” chanting they are doing.
Don’t forget Vaseline! 
We all know why you are fascinated with Vasaline, BrainGlutton, & it’s disgusting. Keep it to yourself, please & thank you.
A station near work is down to $2.19.9 today.
Damn that oil cartel!
A company isn’t a group? 
Actually, your theory doesn’t hold up. If the oil companies were truly manipulating prices for the GOP, then how do you eplain the fact that during 2002 oil prices hit a low of $1.09 in May and then rose to $1.43 in November. Or in 2004 prices were at a high of $2.03 for the year in May and were only $2.00 in November. If your conspiracy theory were correct, then oil companies would have lowered prices to help out the GOP then, right?
The oil company executives testified before Congress in October 2005. Oil prices did indeed start to decline at the beginning of October from $2.92 and they hovered at $2.20 or so until the spring of 2006. That’s no sign of a conspiracy, however. In the spring of 2006 oil companies had to begin switching over to a different blend of gasoline for summer driving. Due to the energy bill this blend had to have more ethanol in it than in the past and ethanol was in short supply. This restriction of demand led to the higher prices we saw at that time.
Wow, six people in the Adminstration have oil ties (sorry, Condi getting a tanker named after her means nothing). Color me underwhelmed.
You can believe what you want, but there are absolutely no facts to back up your beliefs.
This could only be as a result of a 50% drop in oil use world wide. There has apparently been a huge breakthrough in India and China and their use has dropped hugely. Or their might be other dreaded factors involved.
Giant KFC Protest in SF 2/6/05 : Indybay We idiots are everywhere.
http://www.washingtonpost.com/wp-dyn/articles/A28456-2004Oct12.html another uninformed person. Send him an email and set him straight.
You said it, not me.
I don’t dispute that there are a huge number of people who have little knowledge of how gasoline prices work, claim that companies arbitrarily raise and lower prices, and steadfastly refuse to look at the actual facts. People like that do indeed exist everywhere and they have numerous sites on the web and even respected newspapers like the Washington Post publish them. You don’t need to trot out every one of them to prove this. What you do need to do is actually provide some proof for your contention other than “I don’t trust the oil companies.”
U.S. Senate: 404 Error Page not my term,
Which proves absolutely nothing.
No, Bush doesn’t set the price of gas and he can’t lower it for the election. He does control the weather, though, and look for sunny skies on election day in areas where high turnout helps Bush and rain/snow in areas where low turnout helps him. You heard it here first!!
A politician castigating unpopular companies and throwing a bone to economic populists? Say it ain’t so!
I worked on Capitol Hill and I’m pretty familiar with the script: something in the news gets people worked up, Congressmen and Senators rush to propose ridiculous “solutions” to the “problem” knowing full well these “solutions” won’t work and have no chance of being enacted, people praise these folks for paying attention to the problem, and then the matter is forgotten.
I remember when President Clinton called on the FTC to investigate price gouging when gasoline prices were going up in 2000. It was a blatant election year ploy to help Gore since there was no evidence of any gouging. And, of course, after the election the FTC quietly releases a press release announcing that this investigation, like all the others it conducted, found no evidence of gouging.
It’s a ridiculous game played by Congressmen, Senators, Governors, Presidents, and especially state Attorneys General.
I’ve given up trying to tie the price of gasoline to anything but whimsy. Supply-and-demand models don’t work because increasing prices actually appear to be leading increasing demand. It’s as if the United States, in particular, collectively said, “Fuck supply and demand – we’ll pay whatever the hell it takes to burn it in ever-increasing quantities!”
I agree that the “cartel” has little to do with manipulating prices. Maybe the Bush-Cheney gang can get gasoline suppliers to fiddle with price a little here and there, but if they had any real power, they’d have us paying $1.50 a gallon and loving the hell out of them for it.
Nothing makes sense about gasoline prices. But I’ll tell you what does make sense: If gas hits $2 a gallon, I’m borrowing my father-in-law’s old 500-gallon farm fuel tank and filling that puppy up!
What can be irrational about gasoline prices is that people expect gasoline prices to fluctuate. Some people expect them to go up, some people expect them to go up but not as much as the first people, some people expect them to go down, and some people expect them to go down but not as much as the other guys. And some of these people are commuters, some are gas station owners, some are trucking companies, some are oil companies, some are oil producing countries.
So, if the price is rising, people want to buy now before the price increases. But this means increased demand for the same supply. Which means…the price goes up! Wheee! And vice versa, when the prices are going down. But of course supply isn’t constant either. And everyone constantly projects what they think the future price will be, what the future supply will be, what the future demand will be. Often this lowers volitility in the price, because future changes in supply and demand are already discounted. But if people’s expectations of the future are incorrect it increases volitility in the price. Predictable markets are stable, unpredictable markets fluctuate wildly.
What all this means is that there’s no such thing as a “fair” or “reasonable” price for gasoline. Does not exist. Suppliers try to sell high, consumers try to buy low. What’s the fair price? Imagine you’re in an old-style bazaar, bargaining for each thing you buy. What’s the fair price for wheat, for clay pots, for sheepskins, for this or for that? Does such a word have any meaning? A fair price is a price you are willing to pay and a seller is willing to recieve. That’s all.
I know alot about oil markets and their history, so I will help you all out!
Firstly there is an organization or cartel which tried, sometimes sucessfully, sometimes, not to control oil prices. Namely OPEC. They had production quotas to limit production and keep the price high. Thus in 1980 oil was $35 a barrel. It didn’t always work however. By 1986 oil was $12 a barrel as OPEC countries ‘cheated’ on their quotas and non-OPEC affiliated companies found new oil.
Now, however, OPEC is pretty much pumping all out. There is no ‘quota system’ anymore, because there is no spare capacity. That is why oil prices have risen.
Why is this? Where did the spare capacity go? Well…higher demand worldwide. And lower PRODUCTION (this is important) from aging fields in the US, North Sea, Alaska, and now Mexico and Indonesia (both OPEC countries BTW).
A little info. In 1970 the US produced as much oil as Saudi Arabia does now. Did you know that? This was BEFORE Alaska. The continental US made 10 MILLION BARRELS per day!! Now, the US makes about 5 million. Even with Alaska. So what happened? The answer to this is the answer to ‘why have oil prices risen’? Oil fields deplete with time and produce less oil eventually. Mexico just announced that the second largest field in the WORLD, Cantarell, is declining in production.
The larges oil field ITW is Ghawar in Saudi Arabia, which produces about 5 million barrels per day. The problem with these large fields is that they were discovered 50-60 YEARS ago. They are old, and they reach a point where oil comes out slower and slower as they eventually die. That’s what happened to Texas and the lower 48. That’s what is happening to Alaska and the North Sea and Cantarell.
But no problem you say, there will be many new discoveries. Actually no, there haven’t been and many people say there simply WON’T BE. The world has been scoured for oil for the most part, although some people say there are undiscovered supplies in Saudi ARabia, Iraq, etc. The reason OPEC countries didn’t expand their supplies and pumping capacity is that they had excess pumping capacity for so long there was no reason to develop new pumping capacity and supplies.
So maybe Saudi Arabia, can, with time just find new fields, double production as the world eventually needs it etc. Others say it’s not true, that Saudi fields are aging and will decline soon (see book by Matthew Simmons who argues that Saudi fields are close to declining - and if that happens oil at $70 or $80 will be but a fond memory).
As an example, SA’s Ghawar is pumped with seawater so that 50-60% of waht they extract is seawater and has to be boiled off to get the oil. Very expensive. They do this to increase pressure. Now would they be doing this if the field was young and pumping under its own pressure? No. The Saudis insist though that they can pump at 10-15 mm bpd (more with more investment) for many decades. Although they recently said that they would not be able to expand to 20 mm bpd as some people insist they will have to be able to do.
Anyway, I digress. So that is why the price of oil is high. REcord demand, growing every year, especially India and China, and declining fields in the West, possibly even in the Middle East (Iran has had problems too and Iraq of course is on the verge of a civil war). So the price of oil has risen. If it hadn’t, there possibly would be shortages right now. Not a conspiracy, just economic reality in the world of commodities. Copper has gone up 300%. Gold has doubled. Steel has approximately doubled. Iron ore has increased a lot.
Two things to consider for the prolific poster who insists on manipulation (forgot his name). Oil is priced on a marginal bais. That is, on the last barrel. If someone is willing to pay $70 for oil, then all oil is $70. There are no lucky people who buy it at $5 for example. Oil is rationed, like everything in a capitalist society for the most part, on a price basis. Pay the price, get your oil.
Now US companies, what % of oil do they produce? Are they withholding supplies to ‘drive the price higher’? They produce maybe 10-15% of oil. They are investing alot of money to keep production from falling, as it otherwise would. So I think the charge is absolutely baseless.
So why are they making so much money? Very simple. They own alot of oil and the price has gone up. They don’t control the price, they sell into a world market and that’s it. Did they control the price in the 1980s when it was $12 a barrel? I’ve heard oil execs say that “if you told me in 1980 we’d be selling our expensive newly found oil at $12 a barrel, (it had been $35-$40 in 1980 and most ASSUMED the price would only go higher) I would have laughed in your face”. But they did sell it at $12. Why? They don’t control the market. Only OPEC did, and now they can’t even control it. OPEC has actually said they want lower prices.
As for “10 cents a gallon is a fair profit”. That’s not how it works. First of all the oil they are selling may be expensed at a $5 a barrel finding cost, but that finding cost may have been in 1975 or so. Oil is worth what the next barrel costs, not what the historical barrels cost.
Why should they sell any oil in the US if they can’t make money? If you owned a gold mine and had invested in it for years and someone came along and decided that $10 an ounce profit was “fair”, how would you feel? Also where do you think new oil discoveries and investment will come from? Where do companies get the capital to do that? High prices yield profits, which provide money for new investment. And also provide incentives for alternatives and conservation. You want to hamstring the very entities that you insist find more oil. Seems odd.
And the world needs new oil supplies. And they are very expensive and difficult to find. The latest frontier is deep water. Drilling fields in 3000-5000 feet of water. How expensive is that? Could you do it? You have to have a ship hover over a spot on the bottom of the ocean, while it’s being rocked by the sea, and drill a hole down 10-15K feet. Impossible even a few years ago. They should risk billions doing this but if they actually find any oil, well they better not think they’re going to make a profit on it!!
Who are you to say they are “making too much money”? Why should they invest anything if they are going to be henpecked for making a profit?
IMO, you can’t have it both ways. You want low prices. You want new oil supplies (because the old ones are running out). Can’t have both. New oil is expensive. The oil sands of Canada weren’t even economical without the oil prices over $30.
In the longer term, with 6 times as much consumption as new finds, I think the days of $70 or $100 oil will be looked at fondly in a few years. Right now you can buy raw oil, a very precious commodity for LESS THAN THE PRICE OF MILK. Milk is pretty easy to make. Just milk a cow. It eats grass! Oil is a little harder to find. What logical reason is there to think that oil should be ‘fairly priced’ (according to you) at $15-$20 per barrel, or about 1/2 the cost of bottled water?
And as for the “hundreds of billions in profits” of the oil companies, they are made off of cheaper oil found years ago. And the largest oil co, Exxon, makes about $40 billion a year, not hundreds of billions.
Ask yourself this, why is oil the same price all over the world? Bush gives oil co’s the green light to raise prices? US oil companies make a small fraction of world production. So why don’t other producers increase their supplies if it’s so easy to do? BECAUSE THEY CAN’T!!