A Gallon of Gas in Saudi Arabia

Drowned Out wrote:

I live about 5 hours from an oil supply that rivals Saudi Arabia's....and I'm paying just under $5/gallon.

Trust me, it doesn't come close. Reserves in the US (if that is where you live-sorry if I'm wrong) are an order of magnitude less than Saudi Arabia.

farfromglorified wrote:

"They" are still a collection of competing companies. The price of gas could certainly return to $1.00 / gallon. In fact, the price of gas could probably return to $0.50 / gallon if conditions allowed for it.

In 1981, gas peaked at nearly $2.90 / gallon (inflation adjusted). Seven years later, it was half that. Now, it's 3 times the 1988 level. In other words, gas prices fluctuate and they don't fluctuate because oil companies are greedy or altruistic. They fluctuate in response to economic and politcal motivators such as supply, demand, competition, monopolization, regulation and regional conditions.

If you drilled in Alaska and introduced significant new oil supply into a competitive oil market and a competitive refining market with excess capacity, the price of a gallon of gas would certainly come down. How much it would come down is certainly open for debate. But to suggest that introducing new supply that outpaces demand into a competitive market without bottlenecks would have no affect on prices is no different than suggesting that a lead weight dropped off of the Empire State building would float magically beneath your hand.

It really is amazing then how there are so many oil billionaires . If it's not all about profit and money, why are the oil companies so powerful? Why does the cost of oil dictate economies? Yes, I'm sure the good old oil companies are simply trying their best to keep the prices down for us poor little people

Kann wrote:

I hate it when people try to make us believe the law of supply and demand is such a strong truth.

Agree completely! Take the taxes on cigarettes for one.. there's no reason not to tax them completely through the roof... charge 100euro per pack or something ridiculous... other than that people will then stop buying them. It's in their own best interest to keep the prices such that the normal people can still afford, while also having it pretty high.

Heineken Helen wrote:

Agree completely! Take the taxes on cigarettes for one.. there's no reason not to tax them completely through the roof... charge 100euro per pack or something ridiculous... other than that people will then stop buying them. It's in their own best interest to keep the prices such that the normal people can still afford, while also having it pretty high.

Thank you. There is no way that the oil companies that are making billion of dollars out of this would even consider giving up their profit. Not without some kind of regulation- a real one. Where are the regulations and does anyone know what they are? No one is doing anything about this. I remember the early eighties when gas went up to 1.50 and then went back down to 1.20. Don't know if it had anything to do with more supply, the truckers strike or maybe just because everyone started buying smaller cars to save gas. But the point is that they didn't set the prices back down to .89 gal where they could have been and they would still make a profit.

Now that they have had a taste of the green disease, do we all really think that they will be nicey nice and cut their profits in half? If they are making billions of dollars now, why aren't they cutting the prices in half now? We're dillusional if we think that we'll ever see 1.00 gal again. If we drill in Alaska, then someone will profit off of it. Whether it's the drilling companies, the refining companies, or the gas stations.

Unless we find some alternative way, and we pay the 4.00 gallon, they will still make billions off of us. Oh and don't forget the government who is definitely making a pretty penny off of their income. I don't understand economics, but I do know that others set prices that people will pay. And they set the prices at the rim of what will make or break you. They want to make as much profit as they can without deterring customers from buying.

Kann wrote:

I strongly disagree with your comparison. Believing laws of economies are as stable and trustworthy as laws of physics is one of the major problems I have with globalisation. If you introduce enough Alaskan oil to outpace demand in the market you'd still have quite a few things that could make things go wrong and make the price of oil stay high. For instance war. Or major growth in the car business in Asia!

I don't disagree with your last two contentions at all. A small increase in supply versus huge increases in demand or major instability would not equate to lower gas prices. However, your statements here seem to indicate that you actually understand some economic laws and the truth within them.

I hate it when people try to make us believe the law of supply and demand is such a strong truth. If economic laws were so trustworthy there would be no speculation (v. :
1. To meditate on a subject; reflect.
2. To engage in a course of reasoning often based on inconclusive evidence.
3. To engage in the buying or selling of a commodity with an element of risk on the chance of profit.). If I let a rock go from my hand I'd find nobody willing to bet it'll stay up.

LOL...I bet you'll find plenty of people to speculate and bet on weather patterns, something very much within the domain of the "stable and trustworthy laws of physics". Just because you cannot completely quantify a dynamic does not make that dynamic unquantifiable.

cheeseandrice wrote:

Thank you. There is no way that the oil companies that are making billion of dollars out of this would even consider giving up their profit. Not without some kind of regulation- a real one. Where are the regulations and does anyone know what they are? No one is doing anything about this. I remember the early eighties when gas went up to 1.50 and then went back down to 1.20. Don't know if it had anything to do with more supply, the truckers strike or maybe just because everyone started buying smaller cars to save gas. But the point is that they didn't set the prices back down to .89 gal where they could have been and they would still make a profit.

Now that they have had a taste of the green disease, do we all really think that they will be nicey nice and cut their profits in half? If they are making billions of dollars now, why aren't they cutting the prices in half now? We're dillusional if we think that we'll ever see 1.00 gal again. If we drill in Alaska, then someone will profit off of it. Whether it's the drilling companies, the refining companies, or the gas stations.

Unless we find some alternative way, and we pay the 4.00 gallon, they will still make billions off of us. Oh and don't forget the government who is definitely making a pretty penny off of their income. I don't understand economics, but I do know that others set prices that people will pay. And they set the prices at the rim of what will make or break you. They want to make as much profit as they can without deterring customers from buying.

Do you think that that any of the major oil companies are private companies owned by some rich dude so that when they make profits all of the money goes into his bank account (or money bin perhaps)? They are not, they are publicly owned companies which means anyone who wants can get a share of those profits. When they make those billions in profits the money either goes back into the company or gets divided between the shareholders. Yes everyone uses gas, but at the same time pretty much anyone can buy shares in publicly traded oil companies, so I fail to see how it is an "us and them" situation.

chromiam wrote:

Is it amazing that there are billionaires in many industries??? Is it not the whole purpose of starting a company to make money??? So why should oil be any different.... And it's not oil companies fault that the US has based its economy on oil and it derivatives. The US and other countries could have decided years ago to invest in alternative energy sources or as the French have, nuclear energy.

Oil companies are in the business of making money, just like your local bakery is.

EXACTLY! I don't understand how you and FFG are now using MY logic to dispute what I'm saying? I've said all along that they make money... they make plenty of money... and that the US and other countries could have decided long ago to invest in alternative energy sources.

Kel Varnsen wrote:

Do you think that that any of the major oil companies are private companies owned by some rich dude so that when they make profits all of the money goes into his bank account (or money bin perhaps)? They are not, they are publicly owned companies which means anyone who wants can get a share of those profits. When they make those billions in profits the money either goes back into the company or gets divided between the shareholders. Yes everyone uses gas, but at the same time pretty much anyone can buy shares in publicly traded oil companies, so I fail to see how it is an "us and them" situation.

I understand that others invest in oil companies- that they don't have one owner. How they share their profits is irrelevant. THEY (collective) are still gouging us. It's like charging $50 for a bottle of water during hurricaine Katrina. It's just not right.

When you say that pretty much anyone can buy into these companies- well I don't think that the average american can. I can barely put food on the table everyweek or save 10.00 a month, let alone invest in stock.