Americans blame oil companies, Bush for pricey gas

Well, I for one don't blame Chimpy for high gas prices. Yes, he's an idiot. Yes, he's a war criminal too. But he's just not competent enough to influence the cost of gasoline.

Now Cheney on the other hand...

As well they should.Now,let's hear from all the Big Oil suck ups explain the market and yada yada yada.

At quarter end you will see another release of record gross profit for the oil companies. That's gross profit not revenue.

Gross profit= sales - cost.

Only the oil companies can control what they charge.

So please - all of you rightwingnut apologists - address how GROSS PROFIT has been hitting record levels.

The Swamp reporter cites a June 14th Quinnipiac poll, but fails to mention the Quinnipiac poll released June 13th, the latest on the presidential race, which shows Giuliani well in front among Republicans, and Clinton with a huge 14% lead (35%-21%) over Obama.

You'd think if a political blog (like the Swamp holds itself out to be) would write about any Quinnipiac polls, it would be Quinnipiac's political polls.

But I guess polls showing Obama behind, like the latest revelations of Obama's going to bat for indicted political fixer Tony Rezko, are news items the Swamp writers don't want to report.

Either you believe in the supply and demand economic model or you don't. If you do, demand is the culprit. Park the gas hogs, tune-up your car, check your tires, car pool, etc. Cut demand and prices will go down. Increase demand and they will go up. Want to know who's to blame for high gas prices? Look in the mirror.

From what I understand, Congress considered an amendment to streamline the process for granting permits to construct new refineries but the Democrats voted it down.

The Dems do not want to actually do anything to ease the oil shortage, they just want to demagogue it.

http://www.argusleader.com/apps/pbcs.dll/article?AID=/20070614/NEWS/706140333

The Swamp reporter cites a June 14th Quinnipiac poll, but fails to mention the Quinnipiac poll released June 13th, the latest on the presidential race, which shows Giuliani well in front among Republicans, and Clinton with a huge 14% lead (35%-21%) over Obama.

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Bruce: Rudy is pro-choice, pro-gay, pro-gun control. He cannot win the Republicant nomination with those stances, even though he would have a valid shot in the general election if your party would ever let him get there. So your chosen poll really isn't very important in the grand scheme of things.

At a certain point, maybe you should realize that if you don't like the Swamp's sense of news value, you should either start your own paper or go to Moonie Times, where you'll find the treatment more to your liking.

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Of course Bush gets the blame, albeit without obvious justification. Comes with the turf.

Riddle me this S. Sherman. How many applications to build refineries have been requested in the last 10 years?

San Miguel has it right: Demand goes down, prices go down; demand goes up, prices go up. IN fact, just the other day was an article that current OPEC production doesn't meet worldwide demand. Hence, prices rise.

But, I will say this, I do believe the gas companies could curtail their profits a bit to help the general economy.

But then, for decades, you Loony Lefters wanted huge tax increases on gas to cut demand. In fact, Clintoon tried to get a 50 cent a gallon increase in 1993. So I guess if we were paying what we are now, but that $2 more was going to the government than the oil companies (and they actually make only 10 cents a gallon, less than any government entity does on a gallon of gas), you Hypocritical Loonhy Leftists woul be OK with the $3.50 a gallon. I mean for years you weirdos said we weren't paying what they were in Europe and that we should pay more. So, which is it, hypocrites??

I think gas should be $5 a gallon, with the extra $2 going in taxes that pay for public transportation.

JD - your a liar!!!!!!!

Stop making up lies - I searched your Clinton 50cent lie - here's the truth:

Dole Urges Repeal of 1993 Gas Tax Increase

April 27, 1996, Saturday
By ADAM NAGOURNEY (NYT); National Desk
Late Edition - Final, Section 1, Page 10, Column 3, 517 words
DISPLAYING ABSTRACT - Senator Bob Dole today called for the repeal of a 4.3-cent gas tax that a Democratic Congress passed in 1993 as part of President Clinton's plan to reduce the budget deficit. Senator Dole, who has made deficit reduction a cornerstone of his campaign for the Republican Presidential nomination, did ...

Gus, oil company profit goes up during times of high oil prices because reserves, carried on the books at a lower value, get converted to cash at today's price. It's much the same as if you sold your house, acquired in 1972 for $29,500, today for $250,000. You realize a profit by liquidating that asset. It's the same for the oil companies.

Capisce?

Ah, Gus, here from the Washington Post:

When Clinton took office, Vice President Al Gore argued for a big gas-tax increase to promote conservation, and many administration members agreed, Panetta recalled. But, he said, "there were also those like Treasury Secretary [Lloyd] Bentsen who said, 'Are you out of your mind?' "

By the time Congress was done, what started out as a 50-cent-a-gallon proposal ended up as a 4.3-cent-a-gallon increase.

Back to you lamebrains!

gus,

JD is sitting on his IQ.
Don't pay attention to that Wingnut clown.

I almost thought John D. was having a moment of lucidity, and then he goes into his usual Looney Left rant. San Miguel got this right. Park your cars and quit using their gasoline. I use public transportation or walk. My husband rides a bike. How do you get around, John? Do you drive your SUV to the bathroom?

Gee, gas prices were at record highs last summer, dropped before the mid-term elections, and are even higher now.

No manipulation at all.

I'm sure five refineries were built last August, then six refineries had fires this spring. I don't recall reading that story, but in a free market that's the only possibility.

Mrs. J, I drive my brand spankin new Nissan Murano to and from work, 20 miles or so each way every day -- five days a week for work, and even on Sunday, another 50 mile round trip for church!! Isn't life grand??

Dave Brann:"get converted to cash at today's price"

You only further demonstrate my point. The oil companies know the COGS. They set the selling price. You make it sound that price increases just happen magically. Regardless of your COGS you still have to administer your selling price. You would have to prove to me that reserve COG have decreased proportionately to the GP increase over the last 6 years. I doubt that.

JD - that same article says."On Nov. 5, 1990, a reluctant President George H. W. Bush signed a deficit-reduction compromise with the Democratic-controlled Congress that increased the federal gas tax by 5 cents."

so what is it with you wingnuts - no gas tax or yes to gas tax - make up your mind!!!!!

Gus, two points:

First, the price of crude oil (which determines the present actual, as opposed to book, value of those reserves) is set not by the oil companies, but by OPEC, which manipulates supply to keep crude prices high.

Second, the price of a commodity and the cost to produce the last marginal unit of it are inextricably linked. The price of gasoline is the cost to produce and deliver a gallon of it made from the most expensive crude. Reserves purchased at a lower price are just along for the ride, and the difference is (here's that horrible word) profit.

If you expect the oil companies to sell their reserves for less than the going price, I suppose that you'd be happy to sell that house that you bought in 1972 for $29.5K for the same amount in today's market!

Dave Brann,
OPEC hasn't set the price of crude since the early '80s. Even Paulo can explain this to you. The price is decided by futures traders.

dear gus,

Please learn to read and reason. John D (and not JD - who is someone else, I think) said Bill Clinton "tried to get a 50 cent a gallon increase." He didn't say Clinton succeeded. Your evidence would only have made John D a liar if it showed that Clinton never tried to raise gas taxes in the amounts suggested. It doesn't do that. I think you owe him an apology for your ill-reasoned outburst.

Cheryl wrote:

"I think gas should be $5 a gallon, with the extra $2 going in taxes that pay for public transportation."

I take it you use public transportation extensively. I suppose a horse-breeder would like the extra money to go to into horse breeding research and better road surfaces for horses.

Personally, I side with the horse guys. One day we will lose our energy resources without having developed any alternate technology. At that time, we will be dropped on our heads without even 19th Century technology to help us. Save your oil and kerosene lamps and wood-burning stoves.

What is responsible for the high price of gas is the inadequate number of refineries. Of those we have, several are down because of accidents and the effects of deferred maintenance (maybe deliberate neglect). A new refinery has been built in over thirty years (thanks to a combination of oil company greed and the environmental fanatics). Unless government - whether a Republican administration or a Democratic administration - leans on the oil companies to build additional refineries, or government builds a few on its own initiative - the prices won't be coming down. Why don't more people start asking whatever happened to those synthetic oil refineries we dismantled at the end of World War II in Germany and brought back here? There were at least three of them and they could be the basis for being able to flip the middle finger at the Arabs, Chavez and every other gouger.

The issue is not the price of crude oil but the price of gas.

Gas prices have gone up $1 a gallon in the last 3mo. or so. So are you saying that the cost to produce and deliver a gallon has also gone up a $1???

Sell for the going price? You still have not answered - who is setting that going price?

By the way your housing example is irrelevant to the oil market. You only own one house not an inventory where you actively go out into the market and purchase when low and sell when high. As a matter of fact in this market you barely break even.

I never mentioned expecting oil to sell for under the COGS, to my point, they ramp it up.

You haven't addressed INCREASING gross profit - just how gross profit occurs.

If you have data to substantiate the cost of reserves at the time of selling I would like to see it.

Of course we have to remember that it is to the advantage of oil producing nations to keep the world oil market in turmoil. Every time Iran rattles its saber, the price of crude goes up and Iran makes more money. The same goes for all oil producing nations. If we were to attain true world peace, oil would go way down in price, and oil profits along with that price.

John, why does it take 50 miles to get to a church?

Weiner,

President Bush is just compenent enough to not just once, but twice, kick the dems butts.

Gus,

At the end of the quarter you will also see that "Big Oil" pays about three times in taxes than they take home in profits.

Let's explain how thr price of gasoline works.

First there is the price of oil - gasoline's raw material. The price of oil is set on a world market based upon supply and demand. OPEC has a heavy hand in the supply-side of the equation, while countries such as the US and relatively recent newcomers such as China and India work on the denmand side of the equation. That's why we see oil in the mid-60's.

The next piece is the the production of gasoline in the US. The volatility of this over time and also over geographical location is due to refinery capacity. If there is a refinery maintenance issue, gasoline in one part of the country may be temporarily higher than normal as compared to other parts of the country - remember Chicago a few weeks ago as compared to California. Chicago is normally lower, but was higherdue to refinery capacity. Also, prices will increase during peak usage periods, just like any other commodity.

Just once I would like to see someone from the left who has taken econ 101.

Gus, oil was selling for $50 a barrel in early January, which is why gas prices fell to about $2 a gallon. Since then the price of oil per barrel has gone up to $65 to $68. In addition, come summer time, the oil companies have to produce more grades of gasoline to meet the various EPA requirements throughout the country. You have more types of gasoline to produce, which causes tighter supplies.

Gypsey, again the Left has a reading and comprehension problem. I have a 50-mile round trip to church, NOT one way. While at one time living just a couple of blocks from my church, I chose to continue with that church despite the difference because of the people, relations and responsibilities -- elements lost on most members of the Far Left.

terry, just once I would like for someone from the retard side manage to pass 5th grade logic. You have failed.

An election has nothing to do with the price of oil on a day to day basis. Way to go showing that 'razor sharp logic' common in Republics. Thanks for trying. Next?

john d - your last point once again supports my point. Your statement proves that the COGS fluctuated and now has gone up. If the COGS has increased how has gross profits increased over and above the cost increase?????

Your example would justify the reason behind rising prices - rising costs - but what you will see in July when earnings are released is higher profits.

Your business ignorance has supported my point precisely.

Sorry John D - you are so helpful.

Jethro, I didn't say that OPEC "sets" the price of crude oil. I said that it manipulates the supply to keep prices high. That's true; just read the newspapers.

At $65 a barrel, which is where crude is now, over $1.50 per gallon of gasoline goes just to pay for the crude!

Gus, you keep talking about cost of goods sold. (I think that's what you mean; you've never told us what "COGS" stands for.) You should know that price is not driven by cost, but by the relationship of supply and demand. The only linkage between cost and price is that, if cost exceeds price, production stops. That's why no one makes buggy whips any more; the demand collapsed, so did the price, so they can't be made for the price that can be gotten for them.

I have been unwillingly engulfed in the hoopla surrounding our countries negative relations with other countries, mostly in part, due to new energy crisis. I found a great article, much like this one, which further details some possible implications and scenarios our country might, and most likely will face in the future. Take a look.

http://www.isecureonline.com/Reports/DRI/EDRIH668/

Enjoy....Cheers!

Dave - I'll finish right where I started. I never supported pricing less than cost. My point is that every quarter big oil releases earning that set NEW RECORD HIGH GROSS PROFITS!!!!
Meaning the incremental increase in Gross Margin continually goes up in a level greater than the level of costs.

Yes prices will increase as costs increase but in a normal business world as you cost increases you pass these thru to the customers; however, you are only passing thru cost not margin - you don't increase the margin on your cost pass thrus. Gross profit actually erodes. Do the math your self.

Big oil increases their price to cover cost increases but also add margin on top of that; therefore, gross profit increases - big oil prepares that pickup not supply and demand.

Capice!

And Gus, all that I'm saying is that those profits that you decry are simply the result of converting to cash, in today's high market, assets that were acquired, and are carried on the books, at a lower price. If the price of oil goes down, the profits will go down too. (Not that I expect that to happen, given the world demand situation and that we're not making more crude very rapidly.) The house sale analogy is completely appropriate in that respect.

Back to where I started, too.

So inventory valuation never goes up in your model - just price?

Absurd. Were are in a tight supply market - are you saying oil companies are not restocking their inventory - only when prices go down - you have no proof of that.

Weinerboy,

But the election does say something about the "idiot's" two opponents. My point to you.

I doubt if you could follow my point to Gus. Go back and play connect the dots with JohnE.

Gus, Dave has it right from an accounting perspective. If you converting lower priced inventory (becoming COGS) at today's current market prices you will have a very nice gross margin.

By the way, most "Big Oil" companies will go out and use the future market to lock in favorable prices.

Gus, there are various methods of valuing inventory - LIFO, FIFO, etc. In all of them, the individual items in inventory are valued at cost. So, if you buy low and sell high, as an oil company with reserves might do in a rising market, you can show a nice profit. Again, that profit will evaporate if the prices that you can sell at fall.