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Oil Companies?

Wow, now there's an ignorant post. It shows you don't understand supply and demand and basic economics along with a political climate that makes it impossible to at least have some independence from the oil cartel in the Middle East. It's like those who say that oil companies have "obscene" profits but haven't a clue why it is that way.

I'll try to make it simple for those who don't understand:

Let's pretend that you have a business and you sell widgets. You decide that you will add 10% to the cost of the widgets for your profit (I'll keep it simple and not include the other things you would add in such as shipping, building costs, office overhead, R & D for different and new types of widgets, embedded taxes, etc. "just a you buy it for x dollars and sell for x dallars + 10% deal").

So your cost for the widgets from your supplier is $10.00 so you add your 10% and sell for $11.00. One day, your supplier informs you that thier supplier is not making as many widgets and it is getting harder to find them but they can get the widgets for $20.00 so you add your 10% and sell them for $22.00. You also immediatly raise the price on your existing widgets otherwise you'll be in the negative due to the price increase. So the amount of your profits have doubled but you are still only making 10%.

Although it's an oversimplification, it is what is going on with the oil. If you want cheaper gas, then urge your elected representatives to allow the start of drilling in the part of ANWR that was specifically set aside for drilling when it was created. Have them start setting up more drilling in the Gulf of Mexico off of the coast of Florida and off of California. Have them start removing oil that is found in the rocks in some areas around Colorado. And here's two big ones: build more refineries and stop all those regional 'blends' of gas. Since gas is sold to all states that sounds like a good place to place a federal standard blend of gas so that existing refineries don't have to shut down and change the formula for each state that requests there own blend.

Also, keep in mind who owns the oil companies: US stock holders-including those of us who have retirement funds and choose to put some of that in stocks. You want your retirement fund to do well right? Then buy oil company stocks!

Posted by: markdean   Posted on: 05/23/07 You are currently: a Guest | Members login | Terms of Use

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