A barrel of oil is the same price it was 2 years ago

madialex · 10-13-2008, 11:22 AM

so why is the price of a gallon of gas not what it was 2 years ago? Looks like to me, no matter if a barrel was 5.00 gas would still be 3.00 a gallon?? WTF??

Steve Conner · 10-14-2008, 03:31 PM

Because the oil companies used "Peak Oil" hysteria as a really convincing excuse to jack up the price of gas. They've got us over a barrel, so to speak. I scrapped my car as a protest, but it's pretty futile, oil now powers everything we do.

hasserl · 10-14-2008, 05:05 PM

Here's a link to a good article that discusses how the price of gasoline is set: http://www.usatoday.com/money/indust...reakdown_N.htm

From the article: "Major oil companies own fewer than 5% of gas stations." And that number is getting smaller, both Exxon-Mobile and BP have announced they are getting out of the retail business, divesting themselves of all company owned gast stations, they will all be privately owned and operated. There's just no money to be made there. Not even in refining, the refining and marketing segments of the oil business is not where the profits are being made. The profit is all made from the exploration and production of crude segments.

Enzo · 10-15-2008, 01:56 AM

Gas is $2.98 around town here today.

Gas is not priced as a direct proportion to crude cost anymore than amplifiers are priced based on the price of 6L6s. It is only one factor. I don't deny the oil companies are making a large profit, but it is not as simple as "they're gouging us."

hasserl · 10-15-2008, 05:22 AM

Gasoline price has record drop to 8-month low: http://www.reuters.com/article/domes...rpc=22&sp=true

Slobrain · 10-15-2008, 06:35 PM

Gasoline price has record drop to 8-month low: http://www.reuters.com/article/domes...rpc=22&sp=true

Thats ok, they have already become filthy rich so I guess they are not as money hungry now....

Enzo · 10-16-2008, 02:38 AM

We as a nation are driving less. Gasoline consumption this past month was 10% lower than the same month last year. That reduces demand, plus the home heating season is not starting in a large way yet, so the refineries are not having to switch refining capacity from gasoline to home heating oil just yet. Two major factors in driving prices down.

Diablo · 10-23-2008, 04:50 AM

The good news is that a tank of gas now costs $45.

The bad news is that if you use all the money in your 401K, you just may be able to buy a tank of gas.

hasserl · 10-23-2008, 05:29 PM

Crude is down to less than 68 dollars per barrel. Don't be surprised when profit reports for the major oil companies come back showing drastic drops in profits vs a year ago. If the price keeps falling we'll see the majors start losing money, and that won't be good for any of us. As much as you may hate them, or feel envious of them, they bring a product to us that we need, so we need them to be profitable to give them the incentive to do it. They're already bailing out of the service station business, if they bail out of the production business because there's no money in it we're all screwed.

Note that OPEC is considering cutbacks in production. Chavez in Venezuela is pushing for that to drive the price of crude back up. Iran, Russia and Venezuela are hurting big time with this drop in crude prices. We may see one or more of them do something stupid just to cause fear about the supply and drive prices back up.

Diablo · 10-24-2008, 01:08 AM

There's no danger of the oil companies not being profitable. Sure they may not haul in the amount of cash they did over the last few years, but they won't quit supplying oil. The demand for petroleum products may drop off a few percent in this recession, but the dramatic drop in gasoline prices just shows there was an artificial bubble caused by speculators. Also, remember the supply of crude is controlled by a world oil cartel. A cartel is illegal in the US, but since they're outside the US we can't do anything about it except reduce our consumption.

hasserl · 10-24-2008, 02:47 AM

What cartel would that be? Opec?

Diablo · 10-29-2008, 12:22 AM

Quote:

Originally Posted by hasserl

What cartel would that be? Opec?

Yes, that would be OPEC.

Mark Hammer · 11-18-2008, 09:58 PM

Incidentally, one of the pleasant but unanticipated effects of the price drop in oil is that Hugo Chavez (president of Venezuela and self-declared heir to the Castro throne) is losing clout.

10-13-2008, 11:22 AM	#1
madialex Senior Member Join Date: May 2006 Posts: 722	A barrel of oil is the same price it was 2 years ago so why is the price of a gallon of gas not what it was 2 years ago? Looks like to me, no matter if a barrel was 5.00 gas would still be 3.00 a gallon?? WTF??

10-14-2008, 03:31 PM	#2
Steve Conner Supporting Member Join Date: May 2006 Location: Glasgow, Scotland Posts: 2,413	Because the oil companies used "Peak Oil" hysteria as a really convincing excuse to jack up the price of gas. They've got us over a barrel, so to speak. I scrapped my car as a protest, but it's pretty futile, oil now powers everything we do. __________________ "Transformerless is the way to go", said he, without a hint of irony.

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10-14-2008, 05:05 PM	#3
hasserl Senior Member Join Date: May 2006 Posts: 623	Here's a link to a good article that discusses how the price of gasoline is set: http://www.usatoday.com/money/indust...reakdown_N.htm From the article: "Major oil companies own fewer than 5% of gas stations." And that number is getting smaller, both Exxon-Mobile and BP have announced they are getting out of the retail business, divesting themselves of all company owned gast stations, they will all be privately owned and operated. There's just no money to be made there. Not even in refining, the refining and marketing segments of the oil business is not where the profits are being made. The profit is all made from the exploration and production of crude segments.

10-15-2008, 01:56 AM	#4
Enzo Senior Member Join Date: May 2006 Location: Lansing, Michigan, USA Posts: 9,266	Gas is $2.98 around town here today. Gas is not priced as a direct proportion to crude cost anymore than amplifiers are priced based on the price of 6L6s. It is only one factor. I don't deny the oil companies are making a large profit, but it is not as simple as "they're gouging us."

10-15-2008, 05:22 AM	#5
hasserl Senior Member Join Date: May 2006 Posts: 623	Gasoline price has record drop to 8-month low: http://www.reuters.com/article/domes...rpc=22&sp=true

10-15-2008, 06:35 PM	#6
Slobrain Senior Member Join Date: Jul 2006 Location: A little town in Texas! Posts: 228	Gasoline price has record drop to 8-month low: http://www.reuters.com/article/domes...rpc=22&sp=true Thats ok, they have already become filthy rich so I guess they are not as money hungry now....

10-16-2008, 02:38 AM	#7
Enzo Senior Member Join Date: May 2006 Location: Lansing, Michigan, USA Posts: 9,266	We as a nation are driving less. Gasoline consumption this past month was 10% lower than the same month last year. That reduces demand, plus the home heating season is not starting in a large way yet, so the refineries are not having to switch refining capacity from gasoline to home heating oil just yet. Two major factors in driving prices down.

10-23-2008, 04:50 AM	#8
Diablo Senior Member Join Date: Dec 2007 Posts: 387	The good news is that a tank of gas now costs $45. The bad news is that if you use all the money in your 401K, you just may be able to buy a tank of gas.

10-23-2008, 05:29 PM	#9
hasserl Senior Member Join Date: May 2006 Posts: 623	Crude is down to less than 68 dollars per barrel. Don't be surprised when profit reports for the major oil companies come back showing drastic drops in profits vs a year ago. If the price keeps falling we'll see the majors start losing money, and that won't be good for any of us. As much as you may hate them, or feel envious of them, they bring a product to us that we need, so we need them to be profitable to give them the incentive to do it. They're already bailing out of the service station business, if they bail out of the production business because there's no money in it we're all screwed. Note that OPEC is considering cutbacks in production. Chavez in Venezuela is pushing for that to drive the price of crude back up. Iran, Russia and Venezuela are hurting big time with this drop in crude prices. We may see one or more of them do something stupid just to cause fear about the supply and drive prices back up.

10-24-2008, 01:08 AM	#10
Diablo Senior Member Join Date: Dec 2007 Posts: 387	There's no danger of the oil companies not being profitable. Sure they may not haul in the amount of cash they did over the last few years, but they won't quit supplying oil. The demand for petroleum products may drop off a few percent in this recession, but the dramatic drop in gasoline prices just shows there was an artificial bubble caused by speculators. Also, remember the supply of crude is controlled by a world oil cartel. A cartel is illegal in the US, but since they're outside the US we can't do anything about it except reduce our consumption.

10-24-2008, 02:47 AM	#11
hasserl Senior Member Join Date: May 2006 Posts: 623	What cartel would that be? Opec?

11-18-2008, 09:58 PM	#13
Mark Hammer Senior Member Join Date: May 2006 Posts: 988	Incidentally, one of the pleasant but unanticipated effects of the price drop in oil is that Hugo Chavez (president of Venezuela and self-declared heir to the Castro throne) is losing clout.

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