Who Profited From Oil Prices
 

after fuel prices were cut in half(and now have rebounded a bit), it begs the question: who really controls them?

we know several factors are involved: price of oil, speculators, wars, profit margins, and supply/demand to name a few. but this article, by a source NOT known to be conservative, puts MOST of the blame/credit on the consumer.

https://www.parade.com/news/intellige...il-prices.html

i suspect OPEC and speculators(controlling oil prices) are next in line leaving oil companies, really just as previously thought, simply on a ride as record usage produced record profits.

I don't know who does, but the Gov't tries to. Gas prices went up, and local gov'ts all over the country were complaining that their fuel tax revenues were down (because the price was high, and people were driving less), so they needed to raise the fuel taxes! How backwards is that? My view is this: If less fuel is being used, there are less miles traveled on the roads, less wear & tear, and less maintenance should need to be done.

-Jay

first of all, I don't think anyone is making much of a profit on oil currently

OPEC is threatening the oil compnies by cutting production of barrels per day in order to drive the prices up. the problem is that all of the reserves are full and the oil companies are actually renting (maybe leasing) barges to fill with oil and store off shore because of the substantially low prices.

I have also heard that texas has cut off most of its oil wells because it is not profitable right now to run them.

the tax thing is going to get strange. in NC, they actually proposed a tax on the miles driven which would be in addition to the tax on gasoline. I think a lot of states are looking into something like that. I agree with jay, less gas means less wear and tear. let the ones burning the road up pay for it.

there was a proposal a few years back to change the tax on gasoline. it is currently a percentage of the price. they wanted to change it to a set amount per gallon. this was back when gas was somewhere around the $3 mark. it was higher than the current percentage but when it didn't make it and prices went up, the supporters of it let everyone know that we made a bad decision. I think we did pretty good considering the price now. I think that was also a NC thing.

While less miles travelled means less wear and tear on the roads, I suspect that it's not linear. Cutting miles travelled in half probably doesn't reduce maintenance costs by anywhere near half.

I agree that it is not linear in that fashion but you also have the transfer truck driver which is doing much more damage to the road (mile per mile) than I am. this has been compensated for in the past by him paying his taxes more often as he gets something like 5MPG vs my 35ish.

now with the second (proposed) tax, we are paying for miles driven and now I have to pay the same as him though my vehicle weighs a very small fraction of what he does completely loaded down.

I don't really know a good solution to this problem but I don't really like the solution that they have come up with.

https://www.fuelly.com/attachments/fo...5a3c396166.jpg

I'm actually pretty proud of our drop in consumption. We're back to the levels we were using in 99-2000 and gas prices kinda reflect that time period too. I scaled it to 0 because I feel it's a better representation of how much change there has been as opposed to the cropped graphs marketing personnel and political figures use to exaggerate the truth.

Still, it's pretty impressive. I'm also shocked how that change, even though it was a little bit, still caused gas to double in price and oil suppliers were supposedly falling behind.

Data acquired from USEIA.

Not only do trucks do more damage tothe road per mile traveled, and they use more fuel per mile, but the tax on diesel fuel is higher than the tax on gasoline.

-Jay

True, but I don't think you're going to fit 40,000 lbs of cargo into Prius. Really, the most energy efficient option for transporting goods is train, but that doesn't seem to be a popular option in the US. Maybe the railway system isn't developed enough, or the transition from rail to road too inefficient/time consuming to make it a viable option?

You'd be surprised how much rail is actually used. Most goods that come from cali to here in new mexico get here by rail. UPS uses rail for their ground shipments.

Alright, but there's still gobs of trucks on the roads, many of them traveling hundreds of miles to make a delivery. I'm saying if the rail system were adequately developed and/or fuel prices high enough, most of that distance could be covered by rail, then the last chunk from a rail depot to the delivery point could be covered by truck, assuming the delivery point doesn't have it's own rail access.

True, I'd love to see more of a future in rail but it seems that all they ever do is just fix up old tracks. It's the cleanest way to transport goods and we should use it way more often.

I saw a program on PBS (I think) a few weeks ago. It was about wealth and money. In it they traced the source of high gas prices last year. Supply and demand didn't change much, yet the price of oil more than doubled. It was caused by oil speculators, aka wall street.

was that about the time all the theories came out about the supply running out within the next 10 years or so?

I remember them talking about us sliding down the side of the bell curve into an oil shortage.

that was before demand fell like a rock as well.

the "official" #s from DOT say otherwise, at least on the demand side. with manipulation of stats who really knows?

if your point has validation, it just proves that higher prices do NOT effectively lower consumption. the rich still drive as just as much, and the rest of us especially those w/out mass transit can only reduce so much.

if demand is in fact down, it's likely related to the recession.

BEEF:"was that about the time all the theories came out about the supply running out within the next 10 years or so?"
There have been theories that the oil supply will run out in X years for the past 20 years or more. Reality shows that as oil supply dwindles the price goes up, and it becomes profitable to drill for oil in less accessible areas. In other words, there are oil reserves available that are not profitable right now.
Maybe someday in the future it'll be profitable to squeeze oil out of tar-laden sand. I just hope the price of gas doesn't go over $50 per gallon before those sources become profitable.

Have you ever heard of Pismo Beach? Pismo is the local native (aka Indian) word for 'tar'. The beach was named for the globs of tar that routinely wash up on the beach. There's oil out there, but what does it take to get it?

Even longer than 20 years... I'm 37, and I can remember as a kid in the late 70's being told that there will be no oil left by the time I learned to drive. Well, I learned to drive in 1987, and we're now 22 years past the point where I was originally told we'd "run out". The whole oil's running out is just a way for the left to cry "The sky is falling" to try and get their way. That's the way I see it. Every day we are finding more and more sources of oil. Now the cheap/easy sources may run out, and the price will go up as we go for harder to reach deposits, but its not running out anytime soon. Oil will be replaced when we find something cheaper. Plain & simple.

-Jay

that was more my point. they have been theorizing about when the oil will run out for years. when the hype gets up high enough, the price of gas goes up. mostly spawned by people that are scared.

that is when you get the crazies that buy a huge sealed container and fill it with gas because they don't think it will be available next week.

The problem of taxing the truckers is that they have to pass that on to YOU the consumer so SHUTUP ALREADY!! You take from your own pocket!!! The real problem is that the DPW are not fixing the roads properly when they do fix them and then they just break apart again. Route 24 south of 195 in Fall River developed about 50 pot holes in a 1 mile stretch of road all of a sudden early this winter. Ya think something was not a little screwy when they paved that section of road a few years ago?

fantastic point! i worked a short stint w/ the roads dept in my local public works a few years ago. anyway, a VERY large(and cheap) contract was given to pavers to upgrade the entire county of unpaved roads.

not only was it VERY poorly done, but the county itself decided to re-ditch along side them TEARING UP THE JUST PAVED STREETS! heavy equipment is unkind to fresh, soft asphault!

THIS is the quintessential model of gov't spending: double dipping, and in this case double screwing up.

Kinda' says it all IMO!

Yup, the job goes to the lowest bidder...who still has to pay union-dictated prevailing wage and follow a huge pile of worthless regulations along with the smaller quantity of useful regulations. That cheapest bid has to take the money from somewhere...

The system is not very good at delivering a good product.

It seems like a largely political issue to me. Longer lasting roads would piss off the associated labor unions. More durable construction means the roads need to repaired less frequently, which means a smaller labor force, which means layoffs and/or reduced hours. In turn, that means it's not in a politician's interest to push for better roads either, unless they were to get the public interested in it as well. Otherwise it would become a "so-and-so wants to cut jobs" talking point for the competition.
Yet another wonderful example of a government "by the people of the people and for the people" screwing over the people.

Clarification- It goes to the lowest bidder who will meet the specifications provided.

BTW when I was driving around Belgium a few years ago, I commented how nice the roads were despite an equally harsh environment to the US. My host pointed out that anyone who bids on a paving project is actually bidding on a 20-year contract, and they are responsible for *everything* that happens in the next 20 years. Therefore it is in the pavers' best interest to use the highest quality materials that never need maintenance, and ensure that the underlying ground/surface is REALLY properly prepared.

At first I thought that was probably more expensive for the gov't, but after thinking about it I bet the incremental cost is tiny (or maybe even cheaper) over the long term.

back to the topic

https://money.cnn.com/2009/01/30/news...ex.htm?cnn=yes

this is an interesting article. I don't think oil did too bad last year, let's see how 2009 fairs for them

The article points out that their profit margin was about 9%, which is typical in other industries as well. The difference between those other industries and the huge profits raked in by the oil companies is the total revenue. There's a big difference between 9% of $100M and 9% of $100B. Greatly inflated oil prices meant greatly inflated revenue, providing greatly inflated profits.

The article points to the supply/demand (specifically the narrowing gap between the two) and speculator issue as a cause of the price fluctuations. Either reducing demand or increasing production could widen that gap and smooth things out... Consumers have control of demand as the recession has shown. Guess who has control of supply? I'm sure they're just scrambling to increase production, with their record profits and all.

Eh...I've bid on loads of government projects. You have to sign a paper stating you will meet the specifications, and there's many qualifications required (some are administratively difficult, few demonstrate actual ability to do the work). You have to convince the guy whose job it is to check your work that your work was decent. You rarely actually have to meet the specifications provided...and sometimes it's impossible to do anyway.

Belgium's strategy sounds good.

As for the link about Exxon:
Interesting...

Y'All got off the subject.

Jay2TheRescus touched on who is the main single profiteer....government.

Why do people buy into 'class envy' and begrudge the system that provides you with cheap fuel and are outraged at the use of corporate jets......
yet think nothing at all of government taking a larger chunk of your purchasing dollar than anyone else....for doing what to bring it to you?
Huh?

This reminds me of a good quote I was thinking of yesterday:
"For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle."
--Winston Churchill

careful HC, that's a VERY political POV. it goes w/out saying which one. ;)

it's not like it was as insignificant as quotations from brainy smurf afterall.

oh wait, even he has his moments of profoundness.

Government and profit in the same sentence, now thats hilarious.

regards
gary