NationStates Jolt Archive

It seems that some analysts believe that a war with Iran could cause prices rise above the $100 level. Nice.

You think for once a company could absorb the price increases rather than passing them on (and more), especially with most oil companies boasting record profits.

Most of the analysts believe that a rise above $100 would only be temporary until extraction plants that are currently being built begin production.

http://observer.guardian.co.uk/business/story/0,,1764412,00.html

You think for once a company could absorb the price increases rather than passing them on (and more), especially with most oil companies boasting record profits.

Record profits in nominal terms are meaningless. Almost all major oil producers have miniscule profit margins, and those margins are being squeezed because the price of production is climbing faster than the increase in prices; it's possible that they might start incurring losses if oil demand remains high.

$100/barrel oil is exactly what we would need to break the oil cycle once and for all; a superspike like that would both reduce demand as well as make alternative energy extremely attractive, and the political climate would make it easy to mandate these alternative sources nationwide. A six-year rally in oil prices has been a miracle for alternative energy, and hopefully a superspike will finally achieve the long-awaited tipping point between fossil fuels and renewable energy...this is an opportunity rather than a source of concern.

A recession might not even be in the cards, especially since the Mideastern oil producers are investing billions in oil wealth abroad; intermittent and localized slowdowns and inflation, definitely, but quite possibly no recession. This would be different than the 1970's because producers would still be producing rather than taking oil off of the market to drive up prices, so that oil money would still be flowing to them. Plus, we're less dependent on energy to produce gains in GDP, so that is a further buffer against an economic slowdown.

And don't forget, we can still conserve. There is as much room for additional energy savings today as there was in 1973 or 1979...we can do much more, and I think an oil spike would achieve that. I'm hoping prices go high and stay there, because that's going to mean freedom from oil rather than continued dependence. Every year of high prices is another five years of advancement in alternative energy.

Record profits in nominal terms are meaningless. Almost all major oil producers have miniscule profit margins,
Profit margins are made of faerie magic and pixie dust.

This is great news. I am thrilled. Truly.

Profit margins are made of faerie magic and pixie dust.

No, they're not. If Exxon's profit margin were negative, it would be losing money rather than earning it to the tune of billions of dollars; it's getting more expensive to produce crude at the same time that its price is rising, but the increase in costs is starting to outweigh the increase in prices.

It's very possible that a prolonged period of high prices and high demand could have the same effect as low prices and falling demand on Exxon's profits, or ConocoPhilips (who is even worse off than Exxon), or Royal Dutch Petroleum, or any of the big producers.

Exxon, for example, only has $28 billion in cash reserves, so if profit margin were to dip negative to 5% or more they would exhaust all of their available cash in less than half a year. A continued rally in oil prices and rising demand could cause them to go bankrupt just as likely as it could cause them to make record profits if the cost of producing oil continues to rise faster than the amount it is sold for.

It seems that some analysts believe that a war with Iran could cause prices rise above the $100 level. Nice.

You think for once a company could absorb the price increases rather than passing them on (and more), especially with most oil companies boasting record profits.

Most of the analysts believe that a rise above $100 would only be temporary until extraction plants that are currently being built begin production.

http://observer.guardian.co.uk/business/story/0,,1764412,00.html


You say "some analysts" like it isnt an absolutely certain proposition agreed to immediately by all reputable analysts

It will happen as I am already hearing talk of $5 a gallon.

The oil industry LOVES the shrub. There is no price gouging. It's business.

No, they're not. If Exxon's profit margin were negative, it would be losing money rather than earning it to the tune of billions of dollars; it's getting more expensive to produce crude at the same time that its price is rising, but the increase in costs is starting to outweigh the increase in prices.
*snip*

Actually they are. I once saw an economist answer a question of how HP(I think it was them) lost value even though they had profit.

It basically was because they didn't make enough profit. Eventhough the follow years projections didn't show a negative; it still wasn't enough profit.

So faerie magic and pixie dust.

You say "some analysts" like it isnt an absolutely certain proposition agreed to immediately by all reputable analysts

Translation: The ones we agree with.

This is great news. I am thrilled. Truly.

So am I. Now we won't see these stupid kids driving their hummers around anymore. People will drive less and that's gonna be a big plus for our environment.

Transalation: The ones we agree with.


The effect on price, given today's supply and demand, minus Iran's supply and minus whatever supply it could disrupt elsewhere is not too difficult to work out.

So am I. Now we won't see these stupid kids driving their hummers around anymore. People will drive less and that's gonna be a big plus for our environment.

Actually no they are not.

You still have to get to work and the mass-transite system is not convient in many parts.

Companies expect you to work long hours now so people are going to pay the price and cut back on spending elsewhere.

The effect on price, given today's supply and demand, minus Iran's supply and minus whatever supply it could disrupt elsewhere is not too difficult to work out.

And yet I have read more then a few columns that a large part of the price increases are a game of the speculators.

Actually no they are not.

You still have to get to work and the mass-transite system is not convient in many parts.

Companies expect you to work long hours now so people are going to pay the price and cut back on spending elsewhere.

They can still buy more economical cars...:rolleyes:

And yet I have read more then a few columns that a large part of the price increases are a game of the speculators.


These are the sorts of things that speculators look at when speculating though, more or less.

If there are destructive hurricanes in the gulf of mexico again this year, things could be even more dire.

They can still buy more economical cars...:rolleyes:

Wow that was rather ignorant. Hate to tell you my British Friend; we all don't have Hummers and SUVs.

Wow that was rather ignorant. Hate to tell you my British Friend; we all don't have Hummers and SUVs.

But lots of you do...
It's not like $5 a gallon is going to bankrupt you all.

These are the sorts of things that speculators look at when speculating though, more or less.

If there are destructive hurricanes in the gulf of mexico again this year, things could be even more dire.

No doubt and the prices were increased before the hurricane made land fall and they went up after.....

But lots of you do...
It's not like $5 a gallon is going to bankrupt you all.

Wow. Two for two. We are not as rich as you think and yes it will. The increases snowball everywere

Trucks are used to get the merchandise and produce to stores. Truck companies need to pass the price increases on as do the stores. COL increases significantly increases which affects free cash.....

I hope it happens without an Iran invasion.

Wow. Two for two. We are not as rich as you think and yes it will. The increases snowball everywere

Trucks are used to get the merchandise and produce to stores. Truck companies need to pass the price increases on as do the stores. COL increases significantly increases which affects free cash.....

You're the richest country in the world and have the third highest GDP per person. That's how rich I think you are.
Large numbers of people in the USA have SUVs and oil price rises are encouraging them to buy more economical cars, which can only be good news.

Sure, it will be bad for some people, but decreased oil use is best for the planet.

Actually they are. I once saw an economist answer a question of how HP(I think it was them) lost value even though they had profit.

It basically was because they didn't make enough profit. Eventhough the follow years projections didn't show a negative; it still wasn't enough profit.

So faerie magic and pixie dust.
No. It's return over investment. If you have a business in which you invest 100 and get 150 back, and another in which you invest 1000000 and get 1000075 back, which is the better business?

You're the richest country in the world and have the third highest GDP per person. That's how rich I think you are.
Large numbers of people in the USA have SUVs and oil price rises are encouraging them to buy more economical cars, which can only be good news.

Yes and col in areas matches the income. We are not awash in personal wealth as you think. You make it sound like we are buying cars every year.

No. It's return over investment. If you have a business in which you invest 100 and get 150 back, and another in which you invest 1000000 and get 1000075 back, which is the better business?

Whatever.

Fact remains profit is now redefined to being a loss if you don't make your projected earnings. The company did not and will not run at a loss and yet it is viewed as it did.....

No. It's return over investment. If you have a business in which you invest 100 and get 150 back, and another in which you invest 1000000 and get 1000075 back, which is the better business?
Well, actually, that depends. What's the Opportunity Cost of both investments?

Whatever.

Fact remains profit is now redefined to being a loss if you don't make your projected earnings. The company did not and will not run at a loss and yet it is viewed as it did.....
If I told you "give 100 and I'll make 150 for you" and in the end I could only make 110 and there were other people who could have made the 150 for you but you had your money tied up, how would you feel?

Market is a lot of feeling too, you know.

EDIT: BTW, that would be Opportunity Cost.

Sure, it will be bad for some people, but decreased oil use is best for the planet.

And if forgot to add :D India and China are going to make our consumption look like a drop in the bucket.

You make it sound like we are buying cars every year.
Not since the fifties.

If I told you "give 100 and I'll make 150 for you" and in the end I could only make 110 and there were other people who could have made the 150 for you but you had your money tied up, how would you feel?

Market is a lot of feeling too, you know.


Not everybody is willing to take chances on the quick buck. The older you get the more you tend to look for stable investments. Especially if you don't have the liquid assets to play around.

So the question is you are guranteed to make 110 and you might make 150.

Why else do bonds sell as they do?

Not everybody is willing to take chances on the quick buck. The older you get the more you tend to look for stable investments. Especially if you don't have the liquid assets to play around.

So the question is you are guranteed to make 110 and you might make 150.

Why else do bonds sell as they do?
And that's precisely why its market value went down. People like a sure thing, so if HP tells you that they're going to make X amount and in the end they make less than that you feel cheated. Specially if other companies made more than that, in which case, you lost money.

It's part of the risk, but people don't like it. So, they start to sell HP stock to invest in something else that they think will deliver and that drives HP stock price down.

But if HP can become better pronosticator and show profit quarter after quarter, people will be back, even if the profit is slimmer. That's why big companies in mature markets will usually take slim profit margins: competition and risk management.

And if forgot to add :D India and China are going to make our consumption look like a drop in the bucket.
China's investing heavily in renewable sources...and...you've got to love India.

Whatever.

Fact remains profit is now redefined to being a loss if you don't make your projected earnings. The company did not and will not run at a loss and yet it is viewed as it did.....Aye, I also read that $30 billion was wiped off the stock market value of Microsoft on Friday, despite profits being up 16% from the previous year for that quarter. Why? It seemed like everyone had expected Microsoft to have bigger profits and that they were worried that microsoft might actually engage in some real competition for once by spending more money on the services in which it competes against Yahoo and Google. So all in all a fairly good quarter, but MS share prices dropped by 11%.

Speculators are like deer - panicked by virtually anything. But because we live in a money economy and they have move lots of money around they can cause problems where there might not necessarily have been a problem. An economy can be slowing down, but still doing fine. However, if something causes investors to panic and pull the plug that can destroy the economy, even though it might have recovered. It's seems to be the main reason for the Wall Street crash. Sure the global economy wasn't doing great, unemployment was up, but there were also rumours that certain experts thought the market was about to crash and people should get out whilst they could. Suddenly teh rumour got out into the open and panic selling ensued, causing the economy to crash as any prospect of investment disapeared. And again this was despite the auto industry having produced a record amount of cars that year.

Just think how boom and bust things would be if the Tobin tax wasn't in place, with speculators buying and selling at the drop of hat.

You say "some analysts" like it isnt an absolutely certain proposition agreed to immediately by all reputable analystsWell, I'm sorry then. I was trying to find the bit in the article that said who the analysts were, but I couldn't find it. So I gave up and just said 'some'.

edit: duh, how stupid can I get. I was right in the 1st paragraph 'senior Wall Street analysts', with a name given in the 4th paragraph 'Adam Sieminski'.

Record profits in nominal terms are meaningless. Almost all major oil producers have miniscule profit margins, and those margins are being squeezed because the price of production is climbing faster than the increase in prices; it's possible that they might start incurring losses if oil demand remains high.

<snip>
That's a good point. The oil industry is mature an effcient and therefore less able to absorb price fluctuations.

I'm not so sure about about your supply and demand point though. Demand is increasing faster than supply and therefroe putting an upward pressure on prices. And I do believe that the majority of price increases this year are because of speculation.

Hmmm, if you say that the price of production is increasing faster than actual prices then you are saying that the oil companies ARE absorbing some of the price increases.

It basically was because they didn't make enough profit. Eventhough the follow years projections didn't show a negative; it still wasn't enough profit.

So faerie magic and pixie dust.

If your profit margin is negative, you lose money. And if your profit margin is small and declining, you will be making less and less profit as time passes regardless of revenue growth. Margins are more important than nominal profit because they show whether or not the company can control its costs as it continues to grow and mature, and if it can't that means losses in the future.

Exxon's costs are rising and its profit margin is shrinking, which means they are close to having a loss, and because they have such large expenditures their losses will be just as big as their profits if they continue to decline on margins.

And if forgot to add :D India and China are going to make our consumption look like a drop in the bucket.

No they're not, because they drive small cars, due to being sensible, and for them, cars are a way to get from A to B, so the more economical, the better.

This is in contrast to seemingly many Americans who view their cars as status symbols, with the feeling that huge, powerful cars reflect well on a person.

Obviously, that was a ridiculously sweeping generalisation, but it's quite true.

That's a good point. The oil industry is mature an effcient and therefore less able to absorb price fluctuations.

And that's why they are so loathe to build refineries; a refinery can take a decade to be approved, built, and online, and they have to assume that it will be profitable 10 or 20 years in the future. It's much easier to expand existing refineries to meet demand but to avoid major investments in new capacity, as well as much safer and more profitable.

I'm not so sure about about your supply and demand point though. Demand is increasing faster than supply and therefroe putting an upward pressure on prices. And I do believe that the majority of price increases this year are because of speculation.

I'd say a good $10-$15 per barrel is risk premium and speculation, and the rest is supply/demand constraints. However, the thing is that the price of crude is being driven upward by the price for refined products rather than vice versa; there's plenty of crude on the market, but not enough capacity to refine it...oil is useless unless it's refined, after all.

However, we also have to take in to account that almost all of the world's oil demand growth is coming from Asia, with the US and Europe a distant second. That situation may change as China increases its fuel economy standards, reduces subsidies, builds refineries and slows its economic growth, and all of those are happening this year. A moderate to major pullback in oil is very likely in the second half of the year barring a severe hurricane season or war with Iran.

The only way to lower gas prices is to drive less, drive more efficiently, and buy more efficient vehicles. Carpooling is a major option; the average number of people in a car is one, so if a lot of people were to carpool that could cut the number of cars on the road by 50% or more and reduce gasoline consumption by even more if those cars on the road were more efficient.

There's a lot of room for reducing demand and it should be done, if only for the sake of those who aren't economically fortunate enough to be able to afford new cars or high gas prices. The same is true with natural gas bills and electrical bills; there are solutions in the pipeline but they will take several years to really affect prices.

Hmmm, if you say that the price of production is increasing faster than actual prices then you are saying that the oil companies ARE absorbing some of the price increases.

Well, yeah, but not intentionally. They don't have a choice in it because the price of oil is set by the market and not by them. That means projects that might be able to outpace costs at $60/barrel are suddenly turned in to losers at $50, and projects once profitable at $40 have their costs increase to $60 or more and vice versa.

The oil industry is easily the most volatile of all commodities.

China's investing heavily in renewable sources...and...you've got to love India.

China's actually way ahead of the US in terms of public transportation, alternative fuels, and is really catching on to alternative energy to power their economic growth. They might be the next California when it comes to sensible energy policy if they keep up their current push for environmental reform and alternative fuels/energy.

China's actually way ahead of the US in terms of public transportation, alternative fuels, and is really catching on to alternative energy to power their economic growth. They might be the next California when it comes to sensible energy policy if they keep up their current push for environmental reform and alternative fuels/energy.

Yeah, exactly, and their population is going to fall sharply in the next decade or two, which means that it's probably going to work nicely, too.

China's actually way ahead of the US in terms of public transportation, alternative fuels, and is really catching on to alternative energy to power their economic growth. They might be the next California when it comes to sensible energy policy if they keep up their current push for environmental reform and alternative fuels/energy.

You make it seem like that's not what I said!

You make it seem like that's not what I said!

No, I was expanding on it because that's actually a very undermentioned point and it was good that you brought it up.:cool:

Yeah, exactly, and their population is going to fall sharply in the next decade or two, which means that it's probably going to work nicely, too.

Either by demographics or economics, that's a correct assessment.

Population growth and energy demand level off and efficiency rises as nations develop economically, so the pain caused by Chinese and Indian demand now will be redeemed by more efficient use and much slower growth later. Combined with the demographic crisis, it's inevitable that Chinese demand will slow or even turn negative in the near future.

Profit margins are made of faerie magic and pixie dust.


Oil companies profit margin 7-9%. Microsofts profit margins as of the last report(a few days ago) is about 30%. Who should we be investigating?

Record profits in nominal terms are meaningless. Almost all major oil producers have miniscule profit margins, and those margins are being squeezed because the price of production is climbing faster than the increase in prices; it's possible that they might start incurring losses if oil demand remains high.


Their profit margins are around 10%, up from about 7% a few years ago. That is not a miniscule profit margin.

I do my part - I sold my car in 2003, and bought electric Lawn Mower. Im still surviving just fine. Just gets a little cold riding a bike to work. But I lost weight, so that is good.

People at work make fun of me for biking, I laugh at them when I point across the street at the gas prices. My vow is to not own a car again until gas drops below 1.00

Their profit margins are around 10%, up from about 7% a few years ago. That is not a miniscule profit margin.

They were only 4% in 1999, rose to 9.5% in 2000 and then plunged back down to around 4% until 2003. The volatility of this industry more than explains the volatility in profit margins, and a 4% margin is almost losing money while 10% is hardly secure; a -2% margin would exhaust almost all of Exxon's cash reserves in one year.

10% is very small compared to almost all other industries; for example, the largest IT companies in the world like Cisco and Microsoft have margins in the 20-30% range, homebuilders are around 20%, pharmaceuticals are 25% plus and biotech are easily over 50%. Many other industries are above 20%; if anything, 20-25% is the average and oil/gas producers are well below average.

I'll just make a few points, some recapping what people have already said:

1. Exxon-mobil produces 2.5 million barrels a day compared to over 80 million world wide. They cannot control the price at which the 95% of the world's production that isn't theirs is sold.

2. In general, profits from high prices go to people/governments that own oil wells.

3. Americans can use less gasoline without having to buy new cars. I've been to America and people there drive pretty much like Australians which means there is a lot of scope for car pooling, going easy on the accelerator, planning shopping trips carefully so you don't need to go so often, sticking to the speed limit, walking and cycling for neighborhood trips and so on. I don't "like" doing these things, otherwise I would aready do them. But I will do them if they same me a lot of money.

4. People in India and China may want to drive big cars, but they pretty much can't aford it. If rich Americans are going ape faeces over high oil prices, imagine how a well off Chinese person earning two dollars an hour must feel? $100 a barrel oil will slow their growth in demand.

The only people that will get really screwed by this are poor people in rural areas. But they don't really count, right?

Please remember that the United States are far less urbanized than Europe.

For an example of someone who gets hurt by high gas prices, let's consider my mother. She has to drive 45 mins to go to her $7.00/hr job (ironically enough) at a gas station. She's been looking for a job that's closer, but she hasn't had any luck in the last 6 months. The closer jobs pay $5.15 (minimum wage) and are usually about 15-20 mins away, so it's not that much of a savings on gas. She has been working part time as a secretary for a realty office, but they pay the same and she can't get more than 10-15 hours per week from them. In all, she works about 50-60 hours a week.

She's driving an old Geo Metro, and she's barely scraping by as it is. What is she supposed to do when gas gets to $5/gallon? I help her whenever I can, but I'm a college student and I'm not exactly rolling in the filthy lucre myself.

There goes my dreams of buying a V8 Mustang.

She's driving an old Geo Metro, and she's barely scraping by as it is. What is she supposed to do when gas gets to $5/gallon? I help her whenever I can, but I'm a college student and I'm not exactly rolling in the filthy lucre myself.

That's why wealthier people who can afford to cut back, buy more efficient vehicles, and carpool should to reduce the burden on those who really can't afford to do much about high prices due to their financial situation. Aside from the direct benefits, you're helping those who aren't as lucky...it's a win-win situation.

The government should also provide huge subsidies to lower income families to buy more efficient vehicles and enable them to get a refund on work-related transportation costs that would be compounded if the person carpools. Incentives to companies to increase their amount of telecommuting and provision of company transportation should also be priorities.

The amount wasted in this country is staggering, and we could do a lot to trim consumption without impeding our economic growth or our standard of living...if anything, it would improve with fewer cars on the road. The burden for that waste does not fall on the people who waste the most but rather those for whom gas prices are not an annoyance but a serious threat to their financial stability.

The only people that will get really screwed by this are poor people in rural areas. But they don't really count, right?

Everybody get's hurt by higher oil prices, but poor people are the ones who will feel the pain.

Please remember that the United States are far less urbanized than Europe.

I'm in Australia so I can sympathize. Gasoline is even more expensive here, but our cars are usually more economical.

For an example of someone who gets hurt by high gas prices, let's consider my mother. She has to drive 45 mins to go to her $7.00/hr job (ironically enough) at a gas station. She's been looking for a job that's closer, but she hasn't had any luck in the last 6 months. The closer jobs pay $5.15 (minimum wage) and are usually about 15-20 mins away, so it's not that much of a savings on gas. She has been working part time as a secretary for a realty office, but they pay the same and she can't get more than 10-15 hours per week from them. In all, she works about 50-60 hours a week.

She's driving an old Geo Metro, and she's barely scraping by as it is. What is she supposed to do when gas gets to $5/gallon? I help her whenever I can, but I'm a college student and I'm not exactly rolling in the filthy lucre myself.

A 45 minute drive? So that we would be looking at roughly 56 miles a day? A 1996 Geo Metro with a 1.3 litre engine gets 39 miles to the gallon in the city, but 35 is probably a more realistic figure for a careful driver. So if gas is $3 a gallon now your mother spends about $4.80 a day commuting. If gas goes up to $5 a gallon she will spend $8 a day comuting, which will take her one hour and nine minutes to earn at the service station. Assumeing that wear and tear on the car is another $4 that's $12 a day total or almost 2 hours work. So working at a closer job would saver her about $8 a day and almost an hour's travelling time. The travelling time should be worth about $5 to her so getting a closer job will save her about $13 dollars a day. She would have to work seven hours at the distant job a day to make the commute worthwhile.

Of course if she could find someone to car pool with it would save money, although I know this can be difficult to arrange. But if car pooling saves $33 dollars a week it should be worth putting effort into somehow arrangeing it. There should be some sort of car pooling system on the internet to help people arrange these sorts of things. Does anyone know of one?

Of course if she could find someone to car pool with it would save money, although I know this can be difficult to arrange. But if car pooling saves $33 dollars a week it should be worth putting effort into somehow arrangeing it. There should be some sort of car pooling system on the internet to help people arrange these sorts of things. Does anyone know of one?

Well, in her particular situation she works at a rural gas station in a town (of about 400 people) I'd never even heard of (and I'm from that area) before she got that job. She works 3rd shift, so from 11:00pm until 7:00am. Hardly any traffic heads towards her gas station anyway, (it services mostly north-south traffic, and it's west of here) and even less goes out at those hours. I had to take her to work when I was in town on break a few times, since her car died, and I would only see 2 or 3 vehicles the whole ride there and back.

I've tried to get her to get a job in town, but the only jobs she could find are of the fast food variety, and she refuses to do that. She can't get a job where she'll work in the afternoon, because my youngest brother is only 10 (a 14 year difference between her eldest and youngest, poor woman) and paying someone to watch him would be too expensive. I don't live in the area, and my sister has 2 kids and a 2 jobs of her own to worry about. Also, we aren't factoring in the cost of taking my brother to school (school buses buses don't stop anywhere near their house), and any other sort of running around she may need to do.

Anyway, the point of my anecdote is that people who are cheering on gas prices should think of what all of the ramifications are going to be. Most of us may be able to operate by driving less or some other means, but there are a lot of people stuck in a cycle of working to live and living to work, and barely scraping by while doing that. Those are the people that are going to be hurt, and some of you don't seem to care about them.

Anyway, the point of my anecdote is that people who are cheering on gas prices should think of what all of the ramifications are going to be. Most of us may be able to operate by driving less or some other means, but there are a lot of people stuck in a cycle of working to live and living to work, and barely scraping by while doing that. Those are the people that are going to be hurt, and some of you don't seem to care about them.

I care in my cold, dispassionate way. But I think this is more an issue of poverty and near poverty than gasoline prices. The United States doesn't need to have people living in poverty. There are other first world countries not as rich as the U.S. that have practically no poverty. There's not a lot that can be done to reduce oil prices, there just isn't as much oil left as there used to be. However there are plenty of things that could be done to help those near the bottom rung of the economic ladder. These would include repealing the Bush tax cuts, some form of national health cover, an improved negative income tax system and better opportunities for training and education.

That's why wealthier people who can afford to cut back, buy more efficient vehicles, and carpool should to reduce the burden on those who really can't afford to do much about high prices due to their financial situation. Aside from the direct benefits, you're helping those who aren't as lucky...it's a win-win situation.


You just love the carpool mantra eh?

So if he is a student and probably holds a job, how is carpooling going to get him around?

Tax the wealthy and the gas guzzling models and put the money into an efficient mass transit system is better then carpooling....

You just love the carpool mantra eh?

Well persosnally I find people tend to get upset when you suggest they sleep in their car. But it's not such a crazy idea. I mean there is a definite correlation between how much gas your car consumes and how comfortable it is to sleep in. And it's a common thing in Japan to sleep at work and only see the wife/husband and kids on the weekends, although there it is do to working 16 hours a day rather than due to gas prices.

Maybe in the future workers will give up on commuting and live in their cars and only actually drive them when they change jobs. :)

I'm in Australia so I can sympathize. Gasoline is even more expensive here, but our cars are usually more economical.

Isn't yours from taxes?

Ours goes into corporate coffers.

Well persosnally I find people tend to get upset when you suggest they sleep in their car. But it's not such a crazy idea.

That wouldn't work well here. For onething certain areas are not places to be at during the night. The cops would check you out and most companies don't like the idea of you sleeping on site.

As to the work hours. We are getting that way. Since shrubby took office I am doing 12-15 a day. The coporate execs are starting to sound that your reward is having a job.

The oil industry LOVES the shrub. There is no price gouging. It's business.

You know. That's really not fair. Clinton was pres. when the USSR military-industrial machine collapsed, and oil demands fell by about 50%. (Hence $20 bbl for oil).

It has nothing to do with teh 'shrub'. Demand has led production in many respects for the past few years, so now we are looking at a real price of $50 +.

Nothing to do with politics, though.

You know. That's really not fair. Clinton was pres. when the USSR military-industrial machine collapsed, and oil demands fell by about 50%. (Hence $20 bbl for oil).

It has nothing to do with teh 'shrub'. Demand has led production in many respects for the past few years, so now we are looking at a real price of $50 +.

Nothing to do with politics, though.

Then how is it prices dropped for the Christmas season and the stocked right backup afterwards?

Repubs and oil go hand in hand. Why else do we listen to that jack ass talking about technology that probably wouldn't be in consoumers hands for 10 years (if ever)?

Then how is it prices dropped for the Christmas season and the stocked right backup afterwards?

To use a greenspanism, the market it frothy right now, because people believe they can't loose in oil.

I could equally ask you why house prices fell before easter.

Repubs and oil go hand in hand. Why else do we listen to that jack ass talking about technology that probably wouldn't be in consoumers hands for 10 years (if ever)?

What. So a dem president will bomb china and india flat, and stop them from using oil?

It's not a conspiracy, people are using moar oil. Hence the price goes up.

To use a greenspanism, the market it frothy right now, because people believe they can't loose in oil.


Ahh but winter time is prime consumption time and yet prices dropped significantly.


I could equally ask you why house prices fell before easter.

For our area? Job loss and people stopped investing. They are hoping the price drops will spur buying. It might improve but incomes have flattened and dropped around here.

Companies are starting to use "incentive" bonus programs instead of raises. Instead of your 3-5% You might get 1-2% with a possible 3-7% split over the 4 quarters.


What. So a dem president will bomb china and india flat, and stop them from using oil?

Actually I am told china is big on mass transit and car ownership is not big at the moment.


It's not a conspiracy, people are using moar oil. Hence the price goes up.

It never is.....

Isn't yours from taxes?

Ours goes into corporate coffers.

Part of it goes into taxes, but the rest goes to, um, well... me. You see, I own part of several oil wells and even though they are pretty clapped out they are still producing oil so I end up making more money from an oil price raise than I end up spending.

But don't blame me for high prices. Even if we sold our well's oil for under $75 a barrel, people would just buy and then resell for instant profit. I'd rather we keep the profit than a turn over artist get it.

I'm saving the money I make and when my current car starts wearing out I'm going to buy a very economical hybrid.

Ahh but winter time is prime consumption time and yet prices dropped significantly.

Yet we had that really mild winter also.


Actually I am told china is big on mass transit and car ownership is not big at the moment.

Oddly enough, petrochemicals aren't just used for personal transport. It's also a function of industrial capacity - for a variety of reasons.

They were only 4% in 1999, rose to 9.5% in 2000 and then plunged back down to around 4% until 2003. The volatility of this industry more than explains the volatility in profit margins, and a 4% margin is almost losing money while 10% is hardly secure; a -2% margin would exhaust almost all of Exxon's cash reserves in one year.

10% is very small compared to almost all other industries; for example, the largest IT companies in the world like Cisco and Microsoft have margins in the 20-30% range, homebuilders are around 20%, pharmaceuticals are 25% plus and biotech are easily over 50%. Many other industries are above 20%; if anything, 20-25% is the average and oil/gas producers are well below average.

I call BS. Exxon-Mobil's profit margins have been increasing steadily from 7% in 2001 to over 10% at present. 10% is a very healthy profit margin. All of the other industries you have named are exceptionally profitable, because they are either risky (home building) or oligopolistic in nature (software, pharma, biotech). Not unlike oil and gas.