Poll: Will Gas Hit $5/Gal by 4th of July?

[Allen K. Littlefield]

Originally Posted by thstone

A small handful of producers (OPEC) who set production limits apriori is not a sellers free market.

This is why we need to drill for our own here in the US.

Equally, a small handful of sellers (Big Oil Companies) who effectively set the market price of gasoline to consumers world wide is not a free market.

Repeat after me 100 times: Oil Companies DO NOT set the price of oil.
(they do set the price at the pump in your neighborhood based on what the oil futures are selling for. That is why a year ago the price at the pump was so much lower. Now why didn't they set the price at $5 a gallon a year ago if they are so greedy?)

In a true open market, oil production would rise substantially as soon as oil prices increase. Instead, prices go up and production stays constant.

Therefore, the worldwide oil market is not free nor open. Q.E.D.

NO it is not free and open when your own govt. is restricting trade through its various agencies and depts. i.e. Interior, Bureau of land management, dept of interior, epa, ad naseum. Due to the agenda to drive up the price of fuel you are seeing the results of this philosophy.

AKL

[Brucelee]

Originally Posted by thstone

A small handful of producers (OPEC) who set production limits apriori is not a sellers free market.

Equally, a small handful of sellers (Big Oil Companies) who effectively set the market price of gasoline to consumers world wide is not a free market.

In a true open market, oil production would rise substantially as soon as oil prices increase. Instead, prices go up and production stays constant.

Therefore, the worldwide oil market is not free nor open. Q.E.D.

You avoided my questions" Is .02 per gallon excessive profits?

[thstone]

Brucelee, I meant to respond back...

Yes, $10,000,000,000 profit per quarter for a single company seems excessive and generally proves my point that there is inadequate competition in the oil industry. Only when competition is weak can a few companies control a market well enough to rack up some of the biggest profits of all time.

The oil companies are not doing anything "wrong" when they do this - in fact, they are doing exactly what they are supposed to do and designed to do - make as much profit as legally possible.

Thus, if I had any say in the matter (which I don't), I'd intoroduce measures that would increase competition to improve the efficiency of the overal oil market.

Just my humble opinion.

This makes no sense, sorry. The oil companies are big and generate alot of revenue. They also require a huge amount of invested capital. In proportion, they are "normal." Moreover, there are tons of smaller oil companies that you never hear of because they are.

I know them and invest in them. Believe me that the industry does not realize super normal profits.

Think of it this waY:

Exxon profit on a gallon of gas: .02 cents

Total tax on gallon of gas in many states: over .50 cents.

Who is raping whom?

[thstone]

Exxon Mobil may not be the biggest company in the US but it's by far the most profitable: Driven by higher prices for crude — as well as big gains in its natural gas and chemicals businesses — profits at Exxon Mobil topped $30 billion, a whopping 58% jump. (Ref: Yahoo Finance 5/5/11)

Higher prices for crude = higher profits. Why? Exxon raises the price of gas higher than the equivalent price increase for buying more expensive crude oil and thereby increases their profit margins.

[tonycarreon]

Originally Posted by AKL

This is why we need to drill for our own here in the US.

would not matter:
1. oil is sold on the global market - just because it was extracted in the US does not mean the gasoline would be put into your car
2. OPEC would decrease their output proportionally with our output
3. even if we opened more areas for drilling tomorrow, it would be years before it was extracted and refined into useable gasoline or other petroleum products
4. us oil production is up already - we have gone from 7.6m bbl/day to just over 9m bbl/day in 2010. the us is the #3 producer in the world.
5. exxon (and other refiners) are not complaining that oil supply is too low

[tonycarreon]

Originally Posted by Brucelee

They pay over 41% of gross profit by way of corporate income taxes.

not true - that number comes from ALL the taxes they pay : income, payroll, taxes they collect from the consumer (state, federal gas tax, etc.). the real number is closer to 20% (it fluctuates year to year with 2009 being almost 0%, 2010 being 18%)...

[Brucelee]

Originally Posted by tonycarreon

not true - that number comes from ALL the taxes they pay : income, payroll, taxes they collect from the consumer (state, federal gas tax, etc.). the real number is closer to 20% (it fluctuates year to year with 2009 being almost 0%, 2010 being 18%)...

No, you are incorrect. That number would state and federal corporate income tax. It certainly does not include gas tax collections. Those go straight to the taxing authority after retail sale.

Check your facts out dude.

[tonycarreon]

Originally Posted by Brucelee

No, you are incorrect. That number would state and federal corporate income tax. It certainly does not include gas tax collections. Those go straight to the taxing authority after retail sale.

Check your facts out dude.

yes they go straight to the taxing authority, collected by exxon owned retail outlets. or are you saying that the money somehow magically goes from a consumer's bank account to the state's coffers without ever passing through the hands of exxon?

i never said that exxon paid those monies from their own pockets. just like they don't pay the sales taxes they collect from their own pockets. they merely collect and distribute to the taxing authority.

i don't know how you get a 41% tax rate on $107b in gross profit with $21b in taxes paid without including non-income taxes as "taxes paid." my math skills are not the greatest, but that comes out to 19.6%

we are essentially agreeing on the same thing. as much as i align myself as a democrat, and as much as i want "evil corporations" to pay their fair share, i do not vilify exxon, chevron, shell, or any other "big oil" company. they make money - that is their purpose. i am all for it. as long as the market will bear it, then they can make it. it sucks as the person paying $4.13/gallon, but that's the point of a free-market (even a pseudo-free market that we currently have.) i also don't buy the "exxon doesn't pay income taxes" or the "they make too much profit" arguments - both are false. they pay income taxes (2009 was effectively $0 because they overpaid in 2008, simple explanation.)

"Sales-based taxes and all other taxes and duties increased in 2011 reflecting higher prices." -- Form 10-Q, 3/31/2011

"The Corporation reports sales, excise and value-added taxes on sales transactions on a gross basis in the Consolidated Statement of Income (included in both revenues and costs)." -- Form 10-K, 2010

as an aside, please do not refer to me as "dude," we are not familiar enough with each other and it just feels like you are talking down to me.

[Brucelee]

I am saying from an accounting point of view, the line item called incomes taxes does NOT include pass through taxes like sales tax collected on the gas.

It DOES include Federal and State Corporate income taxes. Taxes of other kinds show up in other places in the income statement


In 2010, Exxon paid 21.561B in income taxes on 52.959 in pre-tax profits.

Make sense?

[Frank M]

Originally Posted by Brucelee

I am saying from an accounting point of view, the line item called incomes taxes does NOT include pass through taxes like sales tax collected on the gas.

It DOES include Federal and State Corporate income taxes. Taxes of other kinds show up in other places in the income statement


In 2010, Exxon paid 21.561B in income taxes on 52.959 in pre-tax profits.

Make sense?

they also pay 7.5 % payroll taxes, as well as the employee pays 7.5%
then give dividend payments of $1.88 for 5 billion outstanding shares and the recipients of the dividends pay federal and state taxes on it.

lets not talk about retirements, insurance and other benefits paid to employees too.
yes they make much denirio and pay much out too. its a win win for everyone.

here is the other scenario
what if they had to pay more taxes, where would it come from? yup the consumer and who wins, the one receiving the taxes.
they need to show a profit in order to get investors, or otherwise just shut the company down.
then i guess the public would be even more angry because now the oil supply is lessened and the price goes even higher.
a lose lose situation

[Allen K. Littlefield]

Originally Posted by tonycarreon

would not matter:
1. oil is sold on the global market - just because it was extracted in the US does not mean the gasoline would be put into your car
2. OPEC would decrease their output proportionally with our output
3. even if we opened more areas for drilling tomorrow, it would be years before it was extracted and refined into useable gasoline or other petroleum products
4. us oil production is up already - we have gone from 7.6m bbl/day to just over 9m bbl/day in 2010. the us is the #3 producer in the world.
5. exxon (and other refiners) are not complaining that oil supply is too low

I beg to differ. The greater the supply the less it costs. When we used to do more drilling and refining here the price wasn't so high. Sure it is sold on the global market but a glut means lower prices. Just like a bad corn crop means higher prices and a bumper crop means lower.

Fine if OPEC cuts out production. Maybe more of our gas money would stay home and we wouldn't be so DEPENDENT ON FOREIGN OIL, no? Also we would no longer be funding terrorist states. They wouldn't have as much to spend on nuclear bomb programs etc. Even the price of AK47s would go up for them.

This argument about 15 years before we had any results is an old Democrat talking point. I heard that 30 years ago. 15 years went by and we hadn't done a thing. Another 15 goes by and we still haven't built new refineries. You could use that argument for a number of things but it has no validity, sorry.

Now how about your take on the role of govt. with a hostile policy on energy production? Do you think that may have an influence on the price? Oil prices soared after NObama delcared there would be no drilling ANYWHERE ( but then lends tax money to Brazil to drill and develop oil). I really would like your take on a president who says he will bankrupt coal companies....where in the constitution does he get that power?

AKL

[mikefocke]

thinking of replacing my wife's car. And gas prices do factor in but, driving so little, it really is a surprisingly trivial amount compared to insurance, depreciation, etc. And gas $ are something you can do something about buying a hybrid or a car that uses regular or you can buy something bigger and more powerful. You have a choice.

We are highly sensitive to oil prices because we see the meter run when we pump the gas. Almost no other commodity do we buy where that is true. Others we buy by the month or by the fill but not by the penny. How many of us have an appliance which displays $ spent on electricity as it runs? A faucet which displays our cost per second waiting for the water to warm up? Might change our sensitivities or habits if we did.

Supply and demand. And speculation always occurs in a volatile market.

[tonycarreon]

Originally Posted by mikefocke

thinking of replacing my wife's car. And gas prices do factor in but, driving so little, it really is a surprisingly trivial amount compared to insurance, depreciation, etc. And gas $ are something you can do something about buying a hybrid or a car that uses regular or you can buy something bigger and more powerful. You have a choice.

We are highly sensitive to oil prices because we see the meter run when we pump the gas. Almost no other commodity do we buy where that is true. Others we buy by the month or by the fill but not by the penny. How many of us have an appliance which displays $ spent on electricity as it runs? A faucet which displays our cost per second waiting for the water to warm up? Might change our sensitivities or habits if we did.

Supply and demand. And speculation always occurs in a volatile market.

gas prices are also one of the few commodities that affect every other purchase. your hypothetical toaster costs more because the fuel used to bring it to the store or having it shipped. the bread that goes in the toaster will cost more, the eletricity dor the toaster will cost more, etc...

[Brucelee]

Of course, Bernanke is printing money as fast as he can.

Impact on commodities?

You bet.

[Allen K. Littlefield]

Still waiting for an answer to this question? Anybuddy?

Now how about your take on the role of govt. with a hostile policy on energy production? Do you think that may have an influence on the price? Oil prices soared after NObama delcared there would be no drilling ANYWHERE ( but then lends tax money to Brazil to drill and develop oil). I really would like your take on a president who says he will bankrupt coal companies....where in the constitution does he get that power?

AKL [/QUOTE]

[tonycarreon]

Originally Posted by Allen K. Littlefield

Still waiting for an answer to this question? Anybuddy?

Now how about your take on the role of govt. with a hostile policy on energy production? Do you think that may have an influence on the price? Oil prices soared after NObama delcared there would be no drilling ANYWHERE ( but then lends tax money to Brazil to drill and develop oil). I really would like your take on a president who says he will bankrupt coal companies....where in the constitution does he get that power?

AKL

[/QUOTE]

ugh. i'll bite. what was the question?

"hostile policy on energy production" - then why did president bush (w) - republican, wait until nearly the end of his presidency to lift the moratorium on drilling, that was put in place by his father - also a republican? why did obama not put it back in place? why has the US increased oil production for the past two years (again from 7m bb/d to over 9m bb/d)?

obama's energy policy is:
- increase domestic oil production
- boost output of biofuels to augment non-renewable sources of energy
- encourage natural gas in transportation fleets
- increase fuel efficiency

those are "hostile"? sure there was a moratorium on off-shore drilling, but you don't think a republican president would do the same thing after the deepwater horizon disaster? of course. it was put in place to create new safeguards that would hopefully help protect against another spill. the number of new wells dug under president obama is the same as under president bush during the same term in office - 1,738 rigs (the highest since dec 19, 2008).

from the department of the interior's site:
To date, 51 new shallow water well permits have been issued since the implementation of new safety and environmental standards on June 8, 2010. Permits have averaged 6 per month since October 2010, compared to an average of 8 per month in 2009. Just 7 of these permits are currently pending; with 4 having been returned to the operator for more information.

that's 51! new "drill, baby, drill" permits have been granted. 25 permits for deep water drills.

the money you say president obama is lending to brazil after announcing no new offshore drilling is false - the money was a credit facility made available in 2009 by the export-import bank of the US. the board members were appointed by president bush and made the decision, not president obama. furthermore, the money was made available so the oil company could purchase US-made products only.

from the EX-IM Bank's Website:
So far, Ex-Im Bank has approved one portion of the $2 billon offer, a request from JP Morgan Chase, acting as lender, for a medium-term credit guarantee facility in the amount of $300 million. This facility will be used to finance the company's general purchases of U.S. manufactured oil and gas equipment and services. To date, there has been no request for a long-term final commitment under the facility.

and finally, you said that president obama said he "would bankrupt coal companies." this is also false. he did not say that. what he said (as candidate obama) was that he wanted to implement a cap-and-trade system where each energy producer was given a certain allowance of pollution that could be emitted. if they did not emit that much pollution, they could sell their left over "credits" to another company that produced more pollution than would be allowed under law. (by the way, this is what texas does, and the company i worked for made millions selling their left-over "credits"). he said that if a coal company wanted to belch out tons of pollution, they could, but it would bankrupt them. they would need to clean up their act...

candidate obama's quote:
"So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted."

[Allen K. Littlefield]

This president and his party are in bed with the radical eco movement and until they open up Alaska and many other places NOW the 9% is peanuts compared to what this country has in reserve. How much do these coal firing plants "belching out with all of the strict regulations that now govern them? When he says he will bankrupt them I believe he means it. Solar and wind are not viable and I have been watching that industry for over 35 years and it will not replace oil, nuclear or natural gas for years to come if ever. Meanwhile the economy continues to go into the tank. Looks like NObama wants to bankrupt the rest of us too. Cap and trade is a big a fraudulent scheme as is the CO2 greenhouse gas fraud is. Higher taxes, more greedy govt. spending on itself (all done, of course, in the name of helping people and the "Children")

Baloney,

AKL

ps Goldman & Sachs, a big rich wall st. firm in bed with the democrats, just declared that pump prices wouldn't fall just because cost of a barrel is now going down. Claim the demand has led to a short supply. This is BS of the first magnitude! With demand dropping off and a glut of oil we now know where the speculators who are driving this obscene price increase are coming from. That along with the FED driving down the value of the dollar. Hmmm???




and finally, you said that president obama said he "would bankrupt coal companies." this is also false. he did not say that. what he said (as candidate obama) was that he wanted to implement a cap-and-trade system where each energy producer was given a certain allowance of pollution that could be emitted. if they did not emit that much pollution, they could sell their left over "credits" to another company that produced more pollution than would be allowed under law. (by the way, this is what texas does, and the company i worked for made millions selling their left-over "credits"). he said that if a coal company wanted to belch out tons of pollution, they could, but it would bankrupt them. they would need to clean up their act...

candidate obama's quote:
"So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted."[/QUOTE]

[Brucelee]

I think it is clear that:

A-Obama views the increase in gas prices as a good thing

B-He would like to hide that fact by feigning concern for the poor gas payer.

C-If he can find a way to promote "green energy" out of this he will.

D-He will blame greedy oil companies, he always does.

[Perfectlap]

Originally Posted by Frank M

what if they had to pay more taxes, where would it come from? yup the consumer and who wins, the one receiving the taxes.

That's assuming the consumer will continue buying the same amount of gas if the integrateds simply pass the new taxes directly onto the motorist. This is false.
There is a price point where the consumer simply buys less of their of product.

And of course the downstream costs of those higher gas prices show up in other consumer goods. The motorist can not buy the same amount of gas while paying more for the usual quantity of beef, eggs, bread. Partciularly now that consumers do not have a dozen revolving credit card accounts to soak up the deficit in their pay checks. Those credit lines have been slashed drastically. No cash no credit = motorist stays home. The Oil companies will no doubt rack up their biggest profits when crude oil prices hit a new high but it will cost them later. But of course this is limited to the U.S. market. With explosive growth in Asia and commodity rich states in South America they'll have no problem selling their product in other markets. And since this is not Venezuela where private oil interest are nationalized most likely any new oil production here will simply end up in one of the two million gas tanks that China is putting onto the road EACH MONTH.
We have all the coal in the world, although that is a an econlogical disaster in the works, in the short term it will hurt the consumer less than surging oil prices if we can get cars that use less or no oil on the road. the eco considerations are secondary to the practical implications of long term $5 gas. Those who mocked the technology of electric vehicles and plug in hybrids are going to watch those investors of those technologies laugh all the way to the billionaires' bank.

[Brucelee]

"Those who mocked the technology of electric vehicles and plug in hybrids are going to watch those investors of those technologies laugh all the way to the billionaires' bank."

Put your money where your mouth is.