Exxon

[lawgator1]

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I think it's a testimony to how powerful the oil lobbyists are. </p>
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<p>Could you imagine a private citizen trying to withold paying taxes for that amount of time after a court order?

If one has the resources to fight an order in such unusual circumstances, it is not all that remarkable to me. I have simple tort cases that go on for 5-7 years.

 

[MontereyVol]

found it.

Is ExxonMobil's future running dry? - MSN Money

and its not their gas stations. that was reported in 2005. Exxon is making a gamble

 

[volinbham]

I think that's a perfect example of the ability to manipulate numbers. The big oil companies don't usually own the fields -- they have the contract to produce the oil and refine it. At most, they lease production rights.

This isn't number manipulation by Big Oil. These numbers are real.

They own some reserves and in other cases they are paid to extract and develop oil for reserves owned by others.

 

[lawgator1]

This isn't number manipulation by Big Oil. These numbers are real.

They own some reserves and in other cases they are paid to extract and develop oil for reserves owned by others.

Maybe so, but the number was presented as though the oil companies control only 6 % of the world's oil production (from out of the ground to our cars), which I seriously doubt.

 

[allvol123]

Maybe so, but the number was presented as though the oil companies control only 6 % of the world's oil production (from out of the ground to our cars), which I seriously doubt.

There was no intent to mislead. You interepreted it correctly. Your doubt is something you'll need to work out personally.

 

[lawgator1]

There was no intent to mislead. You interepreted it correctly. Your doubt is something you'll need to work out personally.

Come on now, that number was thrown out there in an effort to minimize their ability to do anything about the current situation. I actually think there is a limit to what they can do, and certainly they couldn't do anyting overnight to give the country any significant relief.

But you have to admit there is no transparency here. These rough figures are tossed about by conservative radio show people, but when pressed they never hold up as being indicative of what they are supposed to represent, i.e. owning 6 % of the oil fields does not equate to have a 6 % "say" in the price of a gallon of gas.

Its much more compplicated than that.

How much of the $4.09 I will pay this week goes to federal, state and local taxes? How much goes to the company that took the oil out of the ground? How much to the gas station itself? The distributor? Is the distributor owned in whole or in part by the same people that took it out of the ground? How about the station -- its says Mobil -- so how can the oil company disavow the actual station as a mere franchisee?

Why is it that every time the per barrel price of oil goes up by a few bucks in one day, overnight the gas station ups the per galon price by three to five cents (or more), and yet when the per barrel price of oil goes down by a similar amount, the price of gas does not as quickly go back down, with the gas station owner saying it will be months for the reduction to work its way through?

There may be lots of good answers to these questions, but the whole thing is mired in secrecy and I've never felt like anyone out there can actually break it down with any semblance of accuracy. I'm not saying there is a concerted effort here to wreck the economy, but each piece of the puzzle seems ready willing and able to blame all of the other pieces of the puzzle and no one seems willing to take a big step to break the cycle.

Reminds me of the Steve Martin movie, "The Jerk," (and I think someone else may have mentioned this last week in another thread): "Oh, I see, its a profit deal. I get it now!"

 

[allvol123]

Come on now, that number was thrown out there in an effort to minimize their ability to do anything about the current situation. I actually think there is a limit to what they can do, and certainly they couldn't do anyting overnight to give the country any significant relief.

The number is what it is. When you and your cohorts combine to effectively own 6% of the known oil reserves, your effort is minimal. Any known oil reserves in the US should be available for exploration. We are doing this to ourselves. Idiotic.

 

[utvolpj]

Why is it that every time the per barrel price of oil goes up by a few bucks in one day, overnight the gas station ups the per galon price by three to five cents (or more), and yet when the per barrel price of oil goes down by a similar amount, the price of gas does not as quickly go back down, with the gas station owner saying it will be months for the reduction to work its way through?

Every business works that way. I used to deal with it every day when copper/steel prices were going crazy a few years ago. They sell on replacement cost.

 

[lawgator1]

The number is what it is. When you and your cohorts combine to effectively own 6% of the known oil reserves, your effort is minimal. Any known oil reserves in the US should be available for exploration. We are doing this to ourselves. Idiotic.

"Effectively own."

What in the heck does that mean?

I am quite confident that although the big oil companies do not control 100 % of the price of a gallon of gas, they control a lot more than 6 % of it.

As long as they keep throwing out these ridiculous numbers to try to defend themsevles, people will get more and more suspicious. If they want people to understand their alleged limited ability ot control the price of gas, then they need to explain where the $4.09 goes.

Why don't they?

You figure it out.

 

[allvol123]

It means they control 6% of the available known oil reserves. What more do you want?

 

[lawgator1]

It means they control 6% of the available known oil reserves. What more do you want?

You bounce back and forth between saying that 6 % number simply "is what it is," and implying that it means something more.

If you will admit either a) that their "owning" 6 % of the oil reserves does not mean that their ability to control the price of a gallon of gas is limited to 6 %; or b) that big oil controls much, much more than 6 % of the cost of a gallon of gas, we can move on.

 

[droski]

Come on now, that number was thrown out there in an effort to minimize their ability to do anything about the current situation. I actually think there is a limit to what they can do, and certainly they couldn't do anyting overnight to give the country any significant relief.

But you have to admit there is no transparency here. These rough figures are tossed about by conservative radio show people, but when pressed they never hold up as being indicative of what they are supposed to represent, i.e. owning 6 % of the oil fields does not equate to have a 6 % "say" in the price of a gallon of gas.

Its much more compplicated than that.

How much of the $4.09 I will pay this week goes to federal, state and local taxes? How much goes to the company that took the oil out of the ground? How much to the gas station itself? The distributor? Is the distributor owned in whole or in part by the same people that took it out of the ground? How about the station -- its says Mobil -- so how can the oil company disavow the actual station as a mere franchisee?

Why is it that every time the per barrel price of oil goes up by a few bucks in one day, overnight the gas station ups the per galon price by three to five cents (or more), and yet when the per barrel price of oil goes down by a similar amount, the price of gas does not as quickly go back down, with the gas station owner saying it will be months for the reduction to work its way through?

There may be lots of good answers to these questions, but the whole thing is mired in secrecy and I've never felt like anyone out there can actually break it down with any semblance of accuracy. I'm not saying there is a concerted effort here to wreck the economy, but each piece of the puzzle seems ready willing and able to blame all of the other pieces of the puzzle and no one seems willing to take a big step to break the cycle.

Reminds me of the Steve Martin movie, "The Jerk," (and I think someone else may have mentioned this last week in another thread): "Oh, I see, its a profit deal. I get it now!"

the refiners are losing billions of dollars a year and your local gas station is probably barely profitable at best. depending on where you live around 10% of the cost of oil is going to taxes. The people getting rich are the people taking it out of the ground.

 

[droski]

You bounce back and forth between saying that 6 % number simply "is what it is," and implying that it means something more.

If you will admit either a) that their "owning" 6 % of the oil reserves does not mean that their ability to control the price of a gallon of gas is limited to 6 %; or b) that big oil controls much, much more than 6 % of the cost of a gallon of gas, we can move on.

most of the big oil companies have large refining operations which currently are losing big money. if they could control the price they surely would be pushing for $100 oil rather than $136 since they would be making a lot more money.

 

[lawgator1]

the refiners are losing billions of dollars a year and your local gas station is probably barely profitable at best. depending on where you live around 10% of the cost of oil is going to taxes. The people getting rich are the people taking it out of the ground.

I hear that, too. The franchise owners say gas is a loss-leader for them, that they actually lose money on selling gas just to get you to come in and buy $5 potato chips and $4 bottles of water.

The refineries say that with government regulation they lose billions. Yet they continue to plug away at it. Hey, where can I buy some stock in a company that habitually loses money in a market gone crazy like this?

But that leaves only the big oil that no one seems to be willing to blame this on. And they say its the market just catching up with all the demand and that their investment is finally paying off after all these years! Whew, and I was worried that $10 billion a quarter wasn't going to keep them in business.

As far as I can tell, everyone in the chain is losing money on the deal.

 

[volinbham]

But you have to admit there is no transparency here.

Why is it that every time the per barrel price of oil goes up by a few bucks in one day, overnight the gas station ups the per galon price by three to five cents (or more), and yet when the per barrel price of oil goes down by a similar amount, the price of gas does not as quickly go back down, with the gas station owner saying it will be months for the reduction to work its way through?

There may be lots of good answers to these questions, but the whole thing is mired in secrecy and I've never felt like anyone out there can actually break it down with any semblance of accuracy.

No transparency? The numbers are publicly available.

Gasoline prices have risen nowhere near the amount that oil prices have (% wise). Refinery margins are crap as are gas station margins.

Plenty of people understand how the oil business works. Time and time again it is investigated. There is plenty of transparency if you take the time to learn how a complicated industry works.

 

[volinbham]

I hear that, too. The franchise owners say gas is a loss-leader for them, that they actually lose money on selling gas just to get you to come in and buy $5 potato chips and $4 bottles of water.

The refineries say that with government regulation they lose billions. Yet they continue to plug away at it. Hey, where can I buy some stock in a company that habitually loses money in a market gone crazy like this?

But that leaves only the big oil that no one seems to be willing to blame this on. And they say its the market just catching up with all the demand and that their investment is finally paying off after all these years! Whew, and I was worried that $10 billion a quarter wasn't going to keep them in business.

As far as I can tell, everyone in the chain is losing money on the deal.

Why do you have to blame it on any entity? It is primarily a market mechanism driving oil prices.

Who was blamed when oil plummeted and companies and employees lost jobs?

 

[allvol123]

You bounce back and forth between saying that 6 % number simply "is what it is," and implying that it means something more.

If you will admit either a) that their "owning" 6 % of the oil reserves does not mean that their ability to control the price of a gallon of gas is limited to 6 %; or b) that big oil controls much, much more than 6 % of the cost of a gallon of gas, we can move on.

Not bouncing anywhere. When you control 6% of the supply of something your effect on the price of the entire supply is rather minimal.

 

[droski]

I hear that, too. The franchise owners say gas is a loss-leader for them, that they actually lose money on selling gas just to get you to come in and buy $5 potato chips and $4 bottles of water.

The refineries say that with government regulation they lose billions. Yet they continue to plug away at it. Hey, where can I buy some stock in a company that habitually loses money in a market gone crazy like this?

But that leaves only the big oil that no one seems to be willing to blame this on. And they say its the market just catching up with all the demand and that their investment is finally paying off after all these years! Whew, and I was worried that $10 billion a quarter wasn't going to keep them in business.

As far as I can tell, everyone in the chain is losing money on the deal.

the refineries were making big time money 2 years ago. currently they are losing money. i'm sure they hope that that will change.

if exxon knew that oil was going to $136 they a) wouldn't have hedged their oil position and therefore capped out the price they sell it out and b) they would have sold their refinery division. Take a look at exxons stock price. it's been flat for the past 12 months even with oil up 35%.

 

[droski]

the speculators are the problem. they just aren't testifying before congress like the oil companies are. Since 1999, money in the oil commodities market has gone from something like $16 billion in 1999 to something like $160 billion today. A regulation was removed in 1999 that had vastly limited the ability of big banks and speculators from speculating in the oil markets. This regulation allowed for oil companies to operate in the futures markets, but vastly limited everyone else. In addition, instead of 50 percent margin previously, oil commodities can be traded with only 5 percent margin. Meaning you put down 1/10th of the money you put down 10 years ago. and the fact is as in any market the vast majority of investment funds are long funds, not short funds, meaning that the majority of this $160 bil is buying oil, not selling.

 

[lawgator1]

the speculators are the problem. they just aren't testifying before congress like the oil companies are. Since 1999, money in the oil commodities market has gone from something like $16 billion in 1999 to something like $160 billion today. A regulation was removed in 1999 that had vastly limited the ability of big banks and speculators from speculating in the oil markets. This regulation allowed for oil companies to operate in the futures markets, but vastly limited everyone else. In addition, instead of 50 percent margin previously, oil commodities can be traded with only 5 percent margin. Meaning you put down 1/10th of the money you put down 10 years ago. and the fact is as in any market the vast majority of investment funds are long funds, not short funds, meaning that the majority of this $160 bil is buying oil, not selling.

Interesting stuff. I had not heard about this before.

Who, pray tell, removed the regulation and why?

 

[droski]

Interesting stuff. I had not heard about this before.

Who, pray tell, removed the regulation and why?

The SEC and it was based off of the old BS efficient markets theory i.e. the market will price things at their proper price. you know that same efficient market that priced internet companies losing tens of millions a year with higher market caps than GE or CAT.

 

[lawgator1]

The SEC and it was based off of the old BS efficient markets theory i.e. the market will price things at their proper price. you know that same efficient market that priced internet companies losing tens of millions a year with higher market caps than GE or CAT.

Well, one could make the argument that the market did eventually straighten that out and that the people who foolishly bought into it were the ones who took the real bath.

I wonder who had the SEC make the change ...

 

[droski]

Well, one could make the argument that the market did eventually straighten that out and that the people who foolishly bought into it were the ones who took the real bath.

I wonder who had the SEC make the change ...

The SEC has always encouraged a lack of regulation in the markets especially during the clinton/bush years where it has almost been a mandate. and you are correct the market did eventually adjust to dotcom prices as it probably will with oil. the problem is that the stock market is a far deeper and more liquid market than the oil commodities market. therefore the oil market is far more prone to control or manipulation by speculators than the stock market. edit: while the run up in dotcom stocks surely had a lot to do with the money going into tech funds and venture cap funds, money going into hedge funds (which trade oil futures) and commodity funds (which are generally 70% crude futures) has a much greater effect on the price.

 

[BigPapaVol]

The SEC and it was based off of the old BS efficient markets theory i.e. the market will price things at their proper price. you know that same efficient market that priced internet companies losing tens of millions a year with higher market caps than GE or CAT.

efficient markets isn't really BS. It's the closest explanation there is. You can't get into the psychology of the markets to explain nor can the capital flows be theoretically explained. Efficient markets doesn't mean that the market has all of the information available nor that the price is correct, just that the market is properly priced based upon the information currently available to it.

 

[lawgator1]

efficient markets isn't really BS. It's the closest explanation there is. You can't get into the psychology of the markets to explain nor can the capital flows be theoretically explained. Efficient markets doesn't mean that the market has all of the information available nor that the price is correct, just that the market is properly priced based upon the information currently available to it.

What if the market is deregulated in such a way as to allow (or give a sizeable advantage to) those who both control the money put into it and the commodity being traded? As I read what droski was saying, it appears that is the case.

Now, theoretically eventually the market will correct. But when in the meantime the sheer transaction cost is creating unimaginable windfall and the consequence is too-rapid escalation of a commodity upon which the rest of the economy totally depends, can that be justified?

I'm not saying blame the market -- I'm saying blame the manipulators but at the same time acknowledge that the market was both a) not completely or truly free and b) ill-equipped to feret out the gimmick.