[DeTomaso] Kinda' NPC: Why does oil cost so much?

[Charles McCall]

I've read other reports and heard that production costs continue to
climb, which justifies the high cost of gas, but I don't remember the
last year that Big Oil not only didn't lose money, but didn't have
gazillion dollar, record profits.

If price at the pump in the US was only in direct relation to the cost
of production, profits would remain stable.  They don't, which means
that this isn't the only reason for higher gas prices...

On 6/1/12, shawkins777 at comcast.net <shawkins777 at comcast.net> wrote:
>
>
> I would disagree, the market should set the price, if it cost more than you
> want then don't buy it just like anything else.  But most don't want to do
> that because it may be an inconvenience, let the high price create the
> incentive for inovation of other forms of energy, not the government because
> then they will try and use it to control you.
>
>
>
> Steve
>
>
>
> ----- Original Message -----
>
>
> From: "michael at michaelshortt.com" <michaelsavga at gmail.com>
> To: "Kirby Schrader" <kirby.schrader at gmail.com>
> Cc: "Pantera List" <detomaso at realbig.com>
> Sent: Thursday, May 31, 2012 2:23:48 PM
> Subject: Re: [DeTomaso] Kinda' NPC: Why does oil cost so much?
>
> I agree with you in principle. I have always been fascinated with the
> refining process and
> wondered how Gas could be sold cheaper than a gallon of milk as it was
> for over 100 years.
>
> The real problem is that it is treated as a commodity, bought and sold on
> paper,
> in futures, etc.
>
> The price of 1 gal of regular in 2002 was approx 1.35
> Even as your own chart shows, the 2002-2004 cost per barrel was anywhere
> from
> 20-30.00
>
> yet, in 2009, when the price fell sharply, the retail price to
> consumers did not follow
> back down to the corresponding retail levels of around 1.50 per gallon.
>
> In my book, that's gouging, plain and simple.
>
> I eggs were a quarter and an egg sandwich cost a 1.00, I understand that,
> if the price of an egg rises to .50, I could see the sandwich costing 1.30,
> but when the eggs drops back drop to a ,25 and you're still charging 1.30,
> you're gouging your customer.
>
> I eschew Socialism, Communism, Marxism, etc., but if ever there was a
> product
> that needed to have a world council set a price point on the wholesale
> and retail level, gas
> has to be at the top of the list.
>
> Set a cost for the product at every level and leave it alone, keep it
> away from spectulators
> and wall street.
>
> So much of the hoopla and price fluctuations seemed to be based on
> politics and not the cost of
> actually finding it, drilling, getting it out and processed.
>
> Meanwhile, the worldwide "working man" is held hostage.
>
>
> Michael Shortt
>
>
>
>
>
> On Thu, May 31, 2012 at 3:06 PM, Kirby Schrader
> <kirby.schrader at gmail.com> wrote:
>> Needless to say... I wondered whether I should really do this or not,
>> but I'm throwing caution to the wind.
>>
>> I work in the oil industry. I have since 1974. I spent most of the
>> time overseas.
>>
>> Many times, the price of gasoline and why it costs so much comes up on the
>> list.
>> When offshore drilling rigs cost $1,000,000 a day to run and when the
>> easy to get oil is long gone and it's tough to find new reserves, it's
>> easy for the people working in the industry to understand why.
>>
>> But there are other reasons.... Politics, too! Would you believe it?
>>
>> I feel this article sums up the current scenario very well from an
>> investor point of view.
>> You don't have to know anything about the oil business to understand.
>>
>> Thought some of you might appreciate it. Some won't.
>>
>> http://www.caseyresearch.com/cdd/big-oils-cost-revenue-tightrope
>>
>> Now, I will run quickly back into my hole....
>>
>> FWIW,
>> Kirby
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>
> --
>
>
>
>
>
>
>
> Michael L. Shortt
> Savannah, Georgia
> www.michaelshortt.com
> michael at michaelshortt.com
> 912-232-9390
>
>
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