Help Me Explain This

[WayneB]

if you could go back and time, would you stay awake during High School Economics class or would you still fall asleep?

You put in words exactly what I was thinking.

[EricH]

The number of Chinese car owners tripled in the last year. It is an issue of supply and demand.

[dakota190]

from Newt Gingrich, drill here, drill now, pay less

http://www.humanevents.com/article.php?id=26608

i do have more economics information (i have to dig it out) that pertains to the rising cost of oil, failed policies and the falling dollar. yes, the cost of oil could be made to come down and the dollar made stronger, but politicians appear to be afraid of the ouch factor in an election cycle. the liberals and the conservatives are too afraid of the other getting credit for doing something good during this cycle, so no one is doing what we have elected (hired) them to do. it would seem termination would be in order.

[Guest servant1234]

http://www.nytimes.com/2008/04/24/business...24firstcar.html

Just 24 million new car owners doesn't explain tripling of prices in 7 years when you consider north america and europe already had so many millions of car owners for decades on end.

[NEVINN]

In SA the fuel prices are soaring - people have started travelling in lift clubs, and with this increase food, etc have gone up. There is even talk of a nation wide protest in SA regarding the prices. A loaf of bread for example has risen by about 15% in the last 3 months!!

[MorningGlory]

http://www.nytimes.com/2008/04/24/business...24firstcar.html

Just 24 million new car owners doesn't explain tripling of prices in 7 years when you consider north america and europe already had so many millions of car owners for decades on end.

Here you've hit the nail on the head...the numbers just don't work. Speculators are creating artificially high oil prices by trading on rumors and I can't see why the SEC has not been all over this. (Unless the speculation is coming from foreign sources.) I have my doubts about that though and I believe the truth will come out in the next few months. You just have to follow the money trail. This is very serious....beyond just driving us nuts because of the high price of everything, think of the poor of the world who are having an increasingly hard time just feeding themselves. The forces behind this massive profit taking are endangering millions of lives and, because of this, they need to be stopped.

[nebula]

John Lowe pointed out:

I cannot overemphasize the access issue. Access to resources is severely restricted in the United States and abroad, and the American oil industry must compete with national oil companies who are often much larger and have the support of their governments.

We can only compete directly for 7 percent of the world's available reserves while about 75 percent is completely controlled by national oil companies and is not accessible.

Stephen Simon amplified:

Exxon Mobil is the largest U.S. oil and gas company, but we account for only 2 percent of global energy production, only 3 percent of global oil production, only 6 percent of global refining capacity, and only 1 percent of global petroleum reserves. With respect to petroleum reserves, we rank 14th. Government-owned national oil companies dominate the top spots. For an American company to succeed in this competitive landscape and go head to head with huge government-backed national oil companies, it needs financial strength and scale to execute massive complex energy projects requiring enormous long-term investments.

To simply maintain our current operations and make needed capital investments, Exxon Mobil spends nearly $1 billion each day.

Another theme of the day's testimony was that, if anyone is "gouging" consumers through the high price of gasoline, it is federal and state governments, not American oil companies. On the average, 15% percent of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits. These figures were repeated several times, but, strangely, not a single Democratic Senator proposed relieving consumers' anxieties about gas prices by reducing taxes.

While all oil-importing nations buy oil at global prices, some, notably India and China, subsidize the cost of oil products to their nation's consumers, feeding the demand for more oil despite record prices. They do this to speed economic growth and to ensure a competitive advantage relative to other nations.

Meanwhile, in the United States, access to our own oil and gas resources has been limited for the last 30 years, prohibiting companies such as Shell from exploring and developing resources for the benefit of the American people.

Source

[MorningGlory]

It's the banks that driving up the oil prices cause they's lost so much money on morgages they've started investing in comodaties such as oil to recoop those loses. I barral of oil is traded somthing like six times before it gets to the forecourt or so I've been told.

There is a lot of truth in this....when numbers don't add up, start looking to whomever is pulling the purse strings.

[Ovedya]

I'm not a liberal, but I'm inclined to agree with the person you are talking to.

Fact is, in 2005 Oil Companies showed record profits IN SPITE of all the damage the various hurricanes did to refineries and offshore rigs. How is that possible?

"In spite" of all the damage? Are you serious? Such damage would be the reason that oils companies raised prices. As the president of Exxon told Congress last week "The basic rules of supply and demand apply." When supplies are low or restricted and demand goes up, prices go up. The "record profits" argument is simply a misnomer - in fact and outright lie by lib nut jobs who want to make "Big Oil" to blame for all of America's woes instead of holding to the fire the feet of the persons responsible for the regulations which have made 85% of America's coastlines unavailable for oil exploration.

Simple. They were charging us almost double the fair value of the oil, simply because they found out they could get away with it. And now they found out they can get away with charging twice as much more.

Nonsense. Do you know what the profit margin was in 2006 for Exxon? It was 8.5%. That means Exxon made about $.09 on the dollar for every gallon of gasoline sold. Want to know how much of that dollar federal and state gas taxes are? About $.40 on the gallon. So, who's making more money from the sale of gasoline?

Do you know anybody that can operate a company on an 8.5% profit margin? Your typical retailers are operating at about 20-30%, and on a good year might do as much as 40%. And people complain about all the profit that those big bad oil companies are making from gasoline. For every dollar that you spend on your average JC Penny T-shirt Penny's cost is about $.10. But you don't see people fussing about the cost of a t-shirt, do you, or the "big profits" that JC Penny is making from their customers.

Its STandard Oil + Muslim Oil.

They own everything, either directly, or by proxy. And they'll kill to keep it that way. It HAS happened before.

Conspiracy theory.

So many christians vote republican because they are the "conservative" party, but do you actually realize their fiscal policy hurts everybody except the richest people? The only people it helps are your local real estate tyccoon and CEO and a few other people who struck it rich by abusing someone else.

Bush and all your little senators and representatives are either owners of Big Oil, or they are puppets for Big Oil. That's why none of them ever do anything substantive to change the oil situation. They are loving it. They use Oil + that little green thing called a "Dollar" to take us for everything we've got.

More conspiracy theory. How many Democrat senators own stock in oil companies? Did you know that the biggest conspiracy nut job on the planet, Michael Moore, who actually made a so-called "documentary" in which he basically accused George Bush of conspiring in the 9/11 attack just so he could go to war in order to profit from oil, owns stock in "Big Oil" himself?

So let's have a little perspective here, okay? The only real problem with our "elected representatives" is that they have been cowering to the whims of every eco-nut group that wants to save little fuzzy worms in places where we could have drilled for oil 30 years ago. If "Big Oil" was allowed to explore and drill for oil in the vast reserves this nation has in Alaska and off-shore we wouldn't nearly be in the pickle that we are today. It has absolutely nothing to do with party politics and which politicians own stock in oil companies.

[Ovedya]

How can I explain the rise in gas prices to a liberal who insists it's all because Bush keeps getting richer and richer off of it because he is in with the Saudi's? To hear them tell it, Bush is a heartless devil who gets richer by the day and doesn't care about us little people who have to pay these prices.

I don't understand about this, but Bill O'Reilly did say that the president could do something about it if he only would, a while back.

I think I read recently that the Bush's income has actually gone down according to their released returns. Their income was something like $6 mill. in 2006. Other "oil barrons" make a heck of a lot more money than that. So where are all the "record profits" that the Bush family is supposedly making from the oil crunch?