See Exxon CEO told the Public "tough stuff" on News?
05-03-2006, 09:07 AM
#1
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Thread Starter
See Exxon CEO told the Public "tough stuff" on News?
was watching either Fox (at work) or CNN (at home)
and they were talking gas prices & Democrats, and the anchor says:
"this wire just came on my desk, the Exxon CEO says: it is all about supply and demand, and the public needs to use less gas"
In other words, "i got mine, i am getting more, and you are paying more."
and they were talking gas prices & Democrats, and the anchor says:
"this wire just came on my desk, the Exxon CEO says: it is all about supply and demand, and the public needs to use less gas"
In other words, "i got mine, i am getting more, and you are paying more."
05-03-2006, 09:22 AM
#2
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Originally Posted by 04ctd
was watching either Fox (at work) or CNN (at home)
and they were talking gas prices & Democrats, and the anchor says:
"this wire just came on my desk, the Exxon CEO says: it is all about supply and demand, and the public needs to use less gas"
In other words, "i got mine, i am getting more, and you are paying more."
and they were talking gas prices & Democrats, and the anchor says:
"this wire just came on my desk, the Exxon CEO says: it is all about supply and demand, and the public needs to use less gas"
In other words, "i got mine, i am getting more, and you are paying more."
Rusty
05-03-2006, 10:33 AM
#3
I was banned per my own request for speaking the name Pelosi
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Still trying to figure out why the price per barrell went down almost everyday last week, but wasn't reflected at the pumps? Almost wish we had more than a cold war with China right now so we could charge them with treason for supplying them.
05-03-2006, 10:39 AM
#4
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Originally Posted by Redleg
Still trying to figure out why the price per barrell went down almost everyday last week, but wasn't reflected at the pumps?
NYMEX (the New York Merchantile Exchage) is one of the largest trading floors for energy commodities - HERE is a link to Bloomberg's energy commodities page. Note that #2 diesel trades with heating oil on this market.
Rusty
05-03-2006, 10:46 AM
#5
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Here's an interesting read about oil pricing and supplies now, and in the future.
http://www.forbes.com/home/businessi...501energy.html
http://www.forbes.com/home/businessi...501energy.html
05-03-2006, 11:14 AM
#6
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Originally Posted by RustyJC
No, what he said is exactly how the market works. If supply is constant or declining and demand grows, prices increase. If demand falls, prices drop -
Rusty
Rusty
https://www.dieseltruckresource.com/...d.php?t=101178
if prices are all time high, and thier profits are all time high, i believe that's price gouging, right?
and if every gas company is doing the same - i think we need our politicians to
05-03-2006, 11:16 AM
#7
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Thread Starter
from Bart's link:
So it is puzzling to many industry analysts that instead of using these profits to develop new sources of supply, they prefer to lavish them on their shareholders in the form of higher dividends and buy back stock.
So it is puzzling to many industry analysts that instead of using these profits to develop new sources of supply, they prefer to lavish them on their shareholders in the form of higher dividends and buy back stock.
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05-03-2006, 11:30 AM
#8
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Originally Posted by 04ctd
if prices are all time high, and thier profits are all time high, i believe that's price gouging, right?
and if every gas company is doing the same - i think we need our politicians to
and if every gas company is doing the same - i think we need our politicians to
Originally Posted by 04ctd
from Bart's link:
So it is puzzling to many industry analysts that instead of using these profits to develop new sources of supply, they prefer to lavish them on their shareholders in the form of higher dividends and buy back stock.
So it is puzzling to many industry analysts that instead of using these profits to develop new sources of supply, they prefer to lavish them on their shareholders in the form of higher dividends and buy back stock.
So it is puzzling to many industry analysts that instead of using these profits to develop new sources of supply, they prefer to lavish them on their shareholders in the form of higher dividends and buy back stock. The industry protests that it has poured $106 billion into new production already this year. But though that may sound like a lot, it isn't even enough to replace the depletion of current oil fields as well as cover the wear and tear on equipment and machinery.
"The oil companies have done a tremendous amount of investment," says James Hamilton, an economist and energy expert at the University of California at San Diego. "But they have to just to remain in the same place."
Several factors are making it difficult for the companies to expand production, including shortages of engineers and equipment created from years of low-priced oil. In addition, investment opportunities are scarce. Up to 75% of the world's reserves are off-limits to private oil companies, calculates Philip Verleger, an industry expert at the Institute for International Economics in Washington. And the projects that are available aren't always that lucrative since national governments demand most of the profits for themselves.
But another, more surprising, factor is holding back the oil companies: They simply aren't that bullish on the oil market 10 or so years down the road, when a project started today will start to produce oil.
"My guess is virtually 90% of the oil industry is assuming that $70 oil is not going to last more than a few years," according to Adam Sieminski, the chief energy economist at Deutsche Bank (nyse: DB - news - people ). He guesses that most oil companies are projecting crude will fetch $40 a barrel plus inflation over the long-term.
"The oil companies have done a tremendous amount of investment," says James Hamilton, an economist and energy expert at the University of California at San Diego. "But they have to just to remain in the same place."
Several factors are making it difficult for the companies to expand production, including shortages of engineers and equipment created from years of low-priced oil. In addition, investment opportunities are scarce. Up to 75% of the world's reserves are off-limits to private oil companies, calculates Philip Verleger, an industry expert at the Institute for International Economics in Washington. And the projects that are available aren't always that lucrative since national governments demand most of the profits for themselves.
But another, more surprising, factor is holding back the oil companies: They simply aren't that bullish on the oil market 10 or so years down the road, when a project started today will start to produce oil.
"My guess is virtually 90% of the oil industry is assuming that $70 oil is not going to last more than a few years," according to Adam Sieminski, the chief energy economist at Deutsche Bank (nyse: DB - news - people ). He guesses that most oil companies are projecting crude will fetch $40 a barrel plus inflation over the long-term.
Rusty
05-03-2006, 11:38 AM
#9
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04ctd, you'd make a lousy businessman.
Here's another intersting read about a startup oil company which has the potential to produce oil as cheaply as $10 per barrell. But guess what, the tree huggers are trying to stop it because strip mining is the most efficient way of getting to the oil shale.
http://deseretnews.com/dn/view/0,1249,600118460,00.html
Here's another intersting read about a startup oil company which has the potential to produce oil as cheaply as $10 per barrell. But guess what, the tree huggers are trying to stop it because strip mining is the most efficient way of getting to the oil shale.
http://deseretnews.com/dn/view/0,1249,600118460,00.html
05-03-2006, 11:55 AM
#10
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05-03-2006, 12:04 PM
#11
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When gas first hit $3 a gallon, people complained, but sales/consumption didn't drop off that much.
Oil companies learned from that.
If a company selling widgets at $2 each learned that they could charge $3 and sell just as many widgets, what do you think the company would do?
I saw on the news that it is possible England will see $7/gal. I wonder how long it will be until we see $7/gal?
Oil companies learned from that.
If a company selling widgets at $2 each learned that they could charge $3 and sell just as many widgets, what do you think the company would do?
I saw on the news that it is possible England will see $7/gal. I wonder how long it will be until we see $7/gal?
05-03-2006, 12:16 PM
#12
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Originally Posted by Jeff in TD
When gas first hit $3 a gallon, people complained, but sales/consumption didn't drop off that much.
Oil companies learned from that.
Oil companies learned from that.
With the price of crude well above $70 a barrel, the oil companies have all the incentive they need to scour the world for new reserves and ramp up more costly production of unconventional oil. The notion that Big Oil is constraining supply in order to reap outsized profits is the stuff of conspiracy theory: Private oil companies have no more control over the world price of oil than motorists.
Here's an interesting tidbit. If you think "big oil" is constraining supplies, the Baker Hughes rig count of active drilling rigs worldwide is as follows:
2004 Full Year Average - 2395
2005 Full Year Average - 2746
2006 Year to Date Average - 3080
Economics 101 says that increasing prices will result in efforts to increase supplies. It would appear that, based on the rig counts above, the market is working as predicted, right?
Rusty
05-03-2006, 12:26 PM
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Trading oil on the commodities market (and yes, I realize it IS a commodity) has a tendency to artificially inflate the price of the crude. The price that the oil producing countries (OPEC or otherwise) is charging for a barrel of oil IS NOT and never has been $73 a barrel.
And if you add even as much as $5 per barrel to bring it to the country (price of DFM, lease/insurance on the tanker, etc), which is more than it costs also, it still doesn't approach $73 a barrel.
The IF factor that they use to justify this cost just doesn't hold water. IF Iran this (WE don't get that much of our crude through the Straits of Hormuz), and IF Venezuala that (they haven't yet, so stop IF'ing it to death). I was there for the escorting of tankers through in the Persian Gulf in the '80s. It would be easier today based on the number of ships with the Aegis technology to defend the same numbers transiting through the straits.
No matter how you slice it, or try to justify it with some magical marketing slide show/spreadsheet, going from 10 billion in profits in 10 years to 10 billion in profits in a single QUARTER should be raising red flags all over the place. If they were using this to start building a couple new refineries or something, I'd understand. But they aren't.
And if you add even as much as $5 per barrel to bring it to the country (price of DFM, lease/insurance on the tanker, etc), which is more than it costs also, it still doesn't approach $73 a barrel.
The IF factor that they use to justify this cost just doesn't hold water. IF Iran this (WE don't get that much of our crude through the Straits of Hormuz), and IF Venezuala that (they haven't yet, so stop IF'ing it to death). I was there for the escorting of tankers through in the Persian Gulf in the '80s. It would be easier today based on the number of ships with the Aegis technology to defend the same numbers transiting through the straits.
No matter how you slice it, or try to justify it with some magical marketing slide show/spreadsheet, going from 10 billion in profits in 10 years to 10 billion in profits in a single QUARTER should be raising red flags all over the place. If they were using this to start building a couple new refineries or something, I'd understand. But they aren't.
05-03-2006, 12:35 PM
#14
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Originally Posted by Stingerpup
Trading oil on the commodities market (and yes, I realize it IS a commodity) has a tendency to artificially inflate the price of the crude.
If "big oil" sets the price of crude oil, why did we see $10/bbl crude as recently as the late 1990s?
Rusty