Why is oil so expensive?

[shellytuhenmay]

I'd be happy to shut down all the fossil fuel industries if the people agitating and advocating for their demise would put their collective brains together and put all that effort into a viable alternative. Then the change would be a no-brainer instead of the no-brainers mindlessly chanting for change for the sake of change.

They hate fossil fuels, it kills the planet.
They hate hydro because it kills the little fishies.
They hate nuclear of any sort because it's going to kill us all.

If they had their way, they wouldn't kill us all but they would give the survivors a Hobbesian helllscape.

Yes, yes, yes, yes and yes. Of course we would all like clean safe magic energy from fairy dust. But the world population and the means of existing for billions of people is totally based on oil, gas and coal. They do not even know it. They do not understand where their plastic everything comes from. They don't understand how trucks and buildings and roads and power lines are built. They don't understand the complex chain of events that results in their being able to go into Walmart and buy prepared food. The underpinning is energy. It is maddening that they think they care about pollution and other people want chemicals and crap in our food and water. That other people want to breather dirty air. So bring on the magic free clean energy than can support 8 billion people without any negative cause and effect. Sounds wonderful. But dreaming it up is easy. Make it happen before you kill everyone.

Thanks for a smart response.

 

[Bray123]

What is there to blame Trump for? Prices for fuel went DOWN! In business it is a win win if companies make money and prices go down. When I hear comments like that from people like Anderson Cooper I realize the don't understand how business works. Just fantasy ideas based on social/political dream crap from college professors that don't know what the hell they are babbling about.

Yes, prices went down. But if it weren't for that deal they would have gone down more. Even worse, profits of the oil companies may have dipped and we can't have that.
The deal may have had nothing to do with the Saudis investing billions in Jared Kushner, a person totally unfamiliar with the world of investment banking.

 

[Goldenfinger]

The world runs and is made of oil. I can’t think of anything that doesn’t have oil somewhere in its chain. I’ve had this talk and have not come up with something, it might be a couple processes removed but it’s there. People don’t know what in things. It might not be made of oil but the machines used to make the item either use oil or were made by something that used oil and were delivered by something made of oil or used oil on a road made with oil by machines that used oil.

 

[Goldenfinger]

Yes but it used to be so cheap and now it costs so much. I don't understand why!

one reason is a lot of oil was taken off the market because of embargo against oil from Venezuela and Russia.

 

[Chobham]

one reason is a lot of oil was taken off the market because of embargo against oil from Venezuela and Russia.

True enough. Oil is an international commodity and the prices are set internationally based on supply and demand. However you've overlooked the fact that the US has purposely restricted our domestic production and Canada seems to be doing the same and this compounds the problem.

 

[Goldenfinger]

True enough. Oil is an international commodity and the prices are set internationally based on supply and demand. However you've overlooked the fact that the US has purposely restricted our domestic production and Canada seems to be doing the same and this compounds the problem.

yes I did. Now your getting into politics and I wanted to keep this friendly.

 

[Chobham]

yes I did. Now your getting into politics and I wanted to keep this friendly.

Throughout history governments have ALWAYS interfered with free trade, the two are inseparable.

 

[EarlyDawn1973]

Okay just someone tell me how to get cheap gas again please. I'll do ANYTHING.

Anything you say???

 

[Chobham]

Okay just someone tell me how to get cheap gas again please. I'll do ANYTHING.

Really? Anything? *chuckle*

 

[Chobham]

YES ANYTHING

Too easy, keep your tank filled and you're good to go huh?

 

[Chobham]

Yes keep my tank filled and I'll be happy. And in such a GIVING mood.

I think you'll be taking as much as you give.

 

[Chobham]

Cash, check, money order, or inches?

 

[Chobham]

Ahh, negotiations.

 

[Goldenfinger]

Okay just someone tell me how to get cheap gas again please. I'll do ANYTHING.

Costco, Safeway? i heard you can get deal at both

 

[RobDownSouth]

True enough. Oil is an international commodity and the prices are set internationally based on supply and demand. However you've overlooked the fact that the US has purposely restricted our domestic production and Canada seems to be doing the same and this compounds the problem.

This is a material falsehood.

The US has NOT "purposely restricted our domestic production" in the slightest. The oil companies have hundreds if not thousands of idle oil wells that are idle due to the fact that they are not profitable unless there is a certain price point threshold reached.

Right now, the oil companies are enjoying windfall profits from maximizing the output of lower cost wells and have no real incentive to reopen more expensive wells to drive down the price at the pump.

"purposely restricted production" is a canard, a bumper sticker explanation to rationalize a temporarily irrational commodity market.

And even people like you realize it takes years to develop newly acquired oil leases into producing wells.

The oil companies are enjoying the market imbalance from the Russian-Crimean war and exploiting the temporary imbalance to embiggen their profit & loss statements.

 

[stickygirl]

UK Shale - fact check

The UK contains shale formations bearing oil in the south and gas in the north. The Bowland Shale in the north of England is thought to contain about 1,300 trillion cubic feet (Tcf) of gas. By comparison, the UK consumes about 3 Tcf per year.​

However, only a small proportion of gas in the Bowland can be extracted – perhaps only about 4%. Compared with North America, the shale geology of the UK is considerably more complex, faults are numerous, and drilling costs are substantially higher [pdf link].

A report by the UK Energy Research Centre (UKERC) concluded that shale gas would not reduce energy prices or reduce the UK’s reliance on gas imports. It also pointed to the highly interconnected nature of European gas markets as a reason why fracking would not deliver cheaper fuel prices.

 

[iso36]

True enough. Oil is an international commodity and the prices are set internationally based on supply and demand. However you've overlooked the fact that the US has purposely restricted our domestic production and Canada seems to be doing the same and this compounds the problem.

The American Democrat and Canadian Liberal governments each dismantled the domestic oil and gas production increases of the Trump years.

Big mistake, one we’re all paying for.

 

[JohnEBbad]

Yes, yes, yes, yes and yes. Of course we would all like clean safe magic energy from fairy dust. But the world population and the means of existing for billions of people is totally based on oil, gas and coal. They do not even know it. They do not understand where their plastic everything comes from. They don't understand how trucks and buildings and roads and power lines are built. They don't understand the complex chain of events that results in their being able to go into Walmart and buy prepared food. The underpinning is energy. It is maddening that they think they care about pollution and other people want chemicals and crap in our food and water. That other people want to breather dirty air. So bring on the magic free clean energy than can support 8 billion people without any negative cause and effect. Sounds wonderful. But dreaming it up is easy. Make it happen before you kill everyone.

Thanks for a smart response.

I don't think "those" people go to Walmart. They hate it. They are more Target (pronounced Tar-jhey) and Whole Foods shoppers. Price snobs, as is price is the real indicator of value. "They" should really read some Philip Wicksteed. (Not to be confused with John Wick.)

 

[JohnEBbad]

Yes, prices went down. But if it weren't for that deal they would have gone down more. Even worse, profits of the oil companies may have dipped and we can't have that.
The deal may have had nothing to do with the Saudis investing billions in Jared Kushner, a person totally unfamiliar with the world of investment banking.

Economic/Business illiterates always talk about profit and never ever mention profit MARGIN.

 

[Bray123]

Economic/Business illiterates always talk about profit and never ever mention profit MARGIN.

Sorry, profit margins of the oil companies may have dipped and we can't have that.

That OK for you?

 

[JohnEBbad]

 

[IrezumiKiss]

Yes, prices went down. But if it weren't for that deal they would have gone down more. Even worse, profits of the oil companies may have dipped and we can't have that.
The deal may have had nothing to do with the Saudis investing billions in Jared Kushner, a person totally unfamiliar with the world of investment banking.

Economic/Business illiterates always talk about profit and never ever mention profit MARGIN.

Sorry, profit margins of the oil companies may have dipped and we can't have that.

That OK for you?

https://media1.giphy.com/media/l4FBaonb1hUNpJe12/giphy.gif

*chuckle*

 

[JohnEBbad]

Profits margins don't "dip" when it comes to oil because the oil companies anticipate, so as soon as oil becomes more expensive, the price at the pump goes up, even before the more expensive oil is in the pipeline, because their margin (one of the thinnest across all commodities/industries) must be maintained to keep their companies viable. Profits can dip, as longs the margin is maintained. And keep in mind, these companies have, as their main duty, not suppling you with the cheapest possible energy, but maintaining their share values for their investors, which are not just the rich fat cats, but you, me and everyone with almost any sort of a fund investment, including retirement funds. You should be glad that profit margins don't "dip."

 

[JohnEBbad]

Izzy, you are about the dumbest blowhard that I've ever encountered and I was involved with show business, the purview of self-promoting blowhards, for decades.

 

[IrezumiKiss]

*chuckle*

calm your titties down, Miss Marmelstein. It's just an oil thread from a week ago, not amateur geopol egghead night on Jeopardy.