Saw an article on last quaters profit margin for Texaco/Chevron. Its up 50% for a total of some 56.5 billion $$$. Wish I made that in 4 months. Thought D Trump was rich.

 

Yeah, and around here Texaco/Chevron have the highest prices around.

$2.21 for Diesel
$2.15 for Hitest

Go figure....

 

Mobil/Exxon reported 47% profit increase also, their highest ever, according to the article in our business section. They were talking profits, not gross, which was also up of course, but it means they were getting their crude for a whole lot less than they are making people believe they are getting it for and gouging the puplic for it. The numbers speak for themselves. Diesel is getting hit the worse because they don't want to start an outright riot among the gas users and most of the diesel(certainly not all) is used by commercial businesses; trucks, trains, planes and boats, that can pass the expense down the line to you.

Welcome to the world of price fixing monopolies....

 

Something else that's bad- The manager of the Sinclair station down the street told me they make 3 cents a gallon on diesel

 

We are all slaves to the " oil barons " and they know it all too well !!! Time for "oil man " in the big house to release the National Reserves like Clinton did to keep these crooks in line !!!

 

Guys, in the US it's not against the law to make money. These people are in business to make money, they're doing their job just like you and I.

 

You are right, however there is a law against monopolys and price fixing. Suppose this might fit either ?

 

Supply and demand. If you don't like the price don't buy it. I don't like giving 2.18 /gal. for diesel anymore than anyone else, but I don't like giving $1.29 for a bottle of water either. Capitalism is what has made this country great but there is a downside to capitalism to and that is what we are dealing with.

 

One of the earlier posters made a very salient point. Lifting costs (the cost to get a barrel of oil out of the ground) have changed little. Prices, on the other hand, are set by markets - crude oil, unleaded gasoline, diesel fuel (home heating oil), natural gas, electricity, etc. are traded on the New York Merchantile Exchange.

The oil companies are making large profits because they are enjoying the spread between their lifting costs and higher market-driven prices. No different than the farmer or rancher making good money when grain or beef prices go up - his costs don't necessarily go up correspondingly.

Rusty

 

I figured I would be ahead of the game buying a diesel this time around but due to the fact that the oil companies are relentless on making record profits in our shaky economy the mighty Cummins will have to subside to my miserly gasser . I just can't justify paying 15 cents more a gallon for diesel than Premium gas !!! 95 Nissan Altima the wife's old ride will have to become my driver again , I can drive all week in that thing on 15 bucks or less . We really need to take our country back from all these corporate pirates , they are squeezing the life out of working families nationwide Hate to leave the jewel sitting but I REFUSE to cater to their greed !!! I know it's kind of silly to think that one less diesel purchaser is going to make a hill of beans difference but it's my own lil protest I guess .

 

I haven't met any farmers or ranchers who have just reported the highest ever profit increases. On the other hand, I have seen a lot of them with their highest ever losses. A good many can't even afford to farm any more.
jmho
wayne

 

Wayne,

That's not what I said in my post. I said that profits are high when market prices are high and production costs basically remain constant. That is, when grain and beef prices are high, then the farmer can make more profit if his/her production costs haven't changed dramatically. I didn't say that the farmers' profits are high NOW, did I?

The oil companies no more set market prices than the farmers do. If they did, we would not have seen the $10-$15 oil and sub-$2 natural gas in the 1990s that led to massive layoffs, consolidations, etc. in the oil and gas (and their associated suppliers) industries.

Rusty

 

Rusty
You are correct in your statement. I just have a hard time comparing farming and oil co profits. I think the two are on a totally different scale.
The oil companies (and the middlemen) will continue to sell for as much as the market will bare. It is hard to justify the high pricing when their profits are so high.
my 02
wayne

 

Wayne,

If you were in the business of selling widgets, you would sell them for as much as the widget market would bear, too!

The point is, the oil companies don't establish the markets - the markets do. Agricultural prices (commodities) are established primarily by the Chicago Board of Trade, right? Same thing with energy commodities (e.g., crude oil, home heating oil [diesel fuel], natural gas, unleaded gasoline, electricity, etc.), except the primary trading floor for these is the New York Merchantile Exchange (NYMeX). You can see current energy price quotations HERE. Very much like the agricultural business, especially with the growth of the huge agribusiness concerns and large corporate farms, isn't it?

Right now, conventional wisdom says there's probably $20 or so worth of speculation built into crude oil prices due to anticipation of a cold winter, instability in the producing countries (Nigeria, Venezuela, the Middle East), etc. The market builds in this speculation - the oil companies don't, but the oil companies benefit if they can sell crude oil or refined product at current market prices when their lifting and/or base stock costs haven't increased substantially.

The people in the petroleum-based businesses who are hurting right now are the petrochemical companies. The prices for their primary feedstocks (i.e., crude oil, natural gas and natural gas liquids) have skyrocketed, but they can't completely pass these costs on in the form of pricing increases for their finished products.

Rusty

 

Actually neither monopoly or price fixing applies here. They are not a monopoly as there are multiple oil companies and refineries out there, not all owned by the same individual.

Price fixing does not really apply either as they each have their own pricing index determined by supply and demand as already posted.

Price Goughing does however apply, they are simply charging us too much for the product. They all see the other guy making huge profits so they want in on the gravy train too

Not a good thing for us the consumer, but a wonderful thing for the oil companies them selves.

I say we all put our own oil wells right in the back yard