I believe Exxon pumps 6-17% of the oil it refines. I'm not sure how much of that is produced in the USA. The rest of the crude oil Exxon refines has to purchase on the open market.
So, with a price control of $2.00/gal, Exxon will have to decide what it is going to do with the oil that it pumps from USA sources. Assuming that the price control is accompanied by a ban on the export of Oil, then Exxon will refine some of the oil it owns in the USA into gas.
So, maybe we get a few thousand gallons of gas a day for $2.00/gal. I never said we would get enough to satisfy demand (hence we would all have to drive less because there would be no gas available).
Obviously Exxon would be getting less than the equivalent of $135/barrel of oil for their US production, but they were happy to get $20/barrel a few years ago. They would have to decide if they are willing to sell for $2.00/gal of gas ($40/barrel?) or not sell any at all (export ban).
BTW: I'm sorry if you didn't get the jabs at lib's policies.
If the Dems can get ultimate control, we should see $10 gallon gas like our European friends enjoyed in the past.
they might be able to pull your ass out of the fire you started
Yaaay! That would be great.........
Dem's would implement price controls to prevent the oil companies from continuing to gouge the consumer.
But then we would have shortages, and have to drive less.
A win-win for the Dems.
If the Dems win control, and it looks like they will, they will pass a $2.00/gal TAX ON GAS. During Kerry's campaign he said several times that we should be paying $5.00-$6.00 a gallon. After all, the europeans were paying it at that time, and so should we. My friends in the UK say they are now paying the equivilent of $11.00/imperial gal.
Do you really understand how any commodity is priced in the world marketplace? If you want to place any blame for the last $25 jump in crude prices, then maybe you should attack speculators, hedge funds, and the folks at Goldman Sachs. Also I am really sick and tired of hearing liberals wanting a windfall profit tax on the likes of Exxon, Chevron, etal. I would like to stick a fucking balance sheet or income statement in front of Hillary and Obama, so they would realize a 10% pre-tax operating margin ain't shit in the corporate world. Why not attack Microsoft, their margins exceed 40%. But then again they have to pander to their audience with the typical populist message. Take a frigging econ 101 class and learn the basics of supply and demand and market pricing.
Posted by St. Croix, 5/18/2008 6:57:39 PM
"Also I am really sick and tired of hearing liberals wanting a windfall profit tax on the likes of Exxon, Chevron, etal. I would like to stick a fucking balance sheet or income statement in front of Hillary and Obama, so they would realize a 10% pre-tax operating margin ain't shit in the corporate world.Why not attack Microsoft, their margins exceed 40%"
The stupidity of the liberals on gas prices amazes me..I can't understand how so many people can be so far from reality on basic economics..
Why not attack Harvard for price gouging ???
You're right on that St. Croix. Harvard has an annuity/trust fund in excess of $3 Billion, which was given by alumni groups. Harvard should cut the tuition payers some slack. It has been proven time and time again that price controls never work. The less government meddling in the free market, the better off we would be. 'Windfall profits tax'? The federal and state governments have had a 'windfall' since the first gallon was sold. They collect taxes on every gallon and do absolutely nothing to earn it. When they get it, they divert it from the Highway funds into whatever fund they want, and then cry for an increase because there is not enough money to maintain the infrastructure. As an aside, the Clinton administration spent more money going after Microsoft than they spent on fighting terrorists. WTF.
... What part of Price Controls lead to Shortages did I get wrong?
Maybe you should go take a remedial reading class.
what part of the fact that crude oil itself now costs over $3.00 per gallon before the refinery marks it up a single penny don't you understand?
Just how the fuck are oil companies going to sell gasoline for $2.00 per gallon when the unrefined product costs a dollar more? US oil companies don't have anything to do with setting the price of oil anymore than Folgers sets the international price of coffee beans.
Grow a brain asshole
I believe Exxon pumps 6-17% of the oil it refines. I'm not sure how much of that is produced in the USA. The rest of the crude oil Exxon refines has to purchase on the open market.
So, with a price control of $2.00/gal, Exxon will have to decide what it is going to do with the oil that it pumps from USA sources. Assuming that the price control is accompanied by a ban on the export of Oil, then Exxon will refine some of the oil it owns in the USA into gas.
So, maybe we get a few thousand gallons of gas a day for $2.00/gal. I never said we would get enough to satisfy demand (hence we would all have to drive less because there would be no gas available).
Obviously Exxon would be getting less than the equivalent of $135/barrel of oil for their US production, but they were happy to get $20/barrel a few years ago. They would have to decide if they are willing to sell for $2.00/gal of gas ($40/barrel?) or not sell any at all (export ban).
BTW: I'm sorry if you didn't get the jabs at lib's policies.
Most of the refiners in the U.S. are independent. Do the names Tesoro, Valero, Sunoco, Frontier, Holly, etal mean anything to you. Yes Exxon, Chevron, Shell do own some refineries, but have sold some to the independents. These independents buy crude at whatever the price is at the time. Currently they are paying the futures price of $130. They make money on the crack spread, which has been depressed over the past few months as oil has spiked. Refiners lost a ton in the 4th and 1st quarter.
It was a fucking joke to watch the Senate Hearing targeting the oil companies. Let's see. Six months ago, Henry Waxman (fucking moron) targets Roger Clemens and MLB over Sterois. Anything been done. NO! Leave to MLB to solve, not Govt. Then Waxman targets Mozillo of Countrywide and other Financial Industry CEO's over their pay package. You want to control pay, then I have a problem w/Clinton making $300K per speech, or Tom Cruise making $25M for making a movie in 6 weeks, or A-Rod and his 10 year/$250M contract. Now we target the oil companies, because Dan Durbin and those other moronic fools honestly believe oil companies control the price of oil. These are witch hunts.
GaGambler's point was: Who it their right mind would sell gas for $2/gal if it cost them $3/gal to produce.
That is true for the independent refineries.
My point is that if you own the raw materials and the refinery, AND you couldn't sell anywhere else (export restrictions), then you might consider selling some gas at a below market price ($2/gal) just to make some money to pay your salary.
As price declines, so does supply. At some point, supply goes to zero, but at $2/gal, there should be some supply. Note: I never claim that the supply at $2/gal is anywhere close to meet demand. I just claim that there would be a non-zero supply.