don't believe in the blood for oil theory?

[tylerd]

Don't the oil companies set their prices based on future speculation? It's something like the whole Enron thing, in which speculators take a look at the world events, then make predictions on how these events might affect the cost of oil. Prices are then set accordingly.

The trouble being, I believe, that often these speculations prove to be exaggerated, whether intentionally or not. The bottom line oil prices aren't, for example, as affected by some new news out of Iran as speculators thought they would be. As a result, these inflated prices prove to be erroneous, the result of which is "unintended" profits for the oil companies who made these inaccurate predictions.

In addition, we're looking at a dollar with a rapidly-dwindling value, which means that A) the cost of oil looks more expensive to us because our economy stinks, and B) the "profits" that the oil companies are making don't amount to as much as you'd think, because a billion dollars isn't what it was last year.

I may be off on this, even to a great degree. If so, someone in the know would be doing me a favor be explaining it to me better.

the oil companies have shown their best profits ever recorded...times THREE! i notice that whenever the speculation you speak of comes into play, the prediction of future events always raise the price but rarely lower the price. i remember a couple of years ago with hurricane katrina. the hurricane affected ONE offshore refinery in the gulf and that gave them an excuse to raise the prices almost a dollar a gallon. can you imagine if everyone else used this practice to calculate what they charge?

your lawn guy...it looks like rain so i have to double the price of my lawn cut. your local government...we don't have anyone to read your water meter so we'll have to double the cost of water usage and sewer charges are now double of what fresh water costs. and of course the local grocer...well, gas prices have gone up so this tomato now costs three bucks.

by the way, these three examples are all TRUE happenings here in florida. the cost of gas has affected everyone in everyway. you say you want a revolution?

 

[Rook]

The trouble with that method of setting your prices is that it can be defended with the catchphrase that it's "pro-active" instead of "re-active." It's hard to defend against that sort of logic, as jumbled as it is.

But the trouble comes when the corruption sets in, and I have a hard time believing that there is anything other than corruption and special interests at play here. Being "proactive" might be a safe bet, inasmuch as the best defense is a good offense. However, the only guaranteed honest way of doing things happens to be the reactive approach. With a reactive approach to setting prices, companies have documented proof that expenses have gone up, that they've lost money, and that any increase in prices is justified. No such proof exists when you're dealing with the proactive approach of future speculation. There's not a single company out there with a (reliable) crystal ball. It's the kind of system that creates profits from thin air by conjectures based on wild and heavily biased guesswork.

And then, as tylerd says, we don't see any price drops once the real story comes out.

 

[gideon]

The government does play a role in the regulation and oversight of oil companies. The question should be answered as to how the government over the last seven years has exercised that responsibility and duty to the American people. And in answering that question there should be a full disclosure of the secret meetings held by the current VP regarding the formulation of an administration on oil policy. That is not a pro or anti political party or politician stance. It is a pro citizen stance and a pro good government stance.

 

[Darth Caedus]

I drink your blood, I drink it right up...

 

[Rook]

I was unaware of any such meetings, and I'd love to have them disclosed as well.

It might also be interesting if the government did away with this smokescreen in the form of the MLB steroid abuse hearings. I can think of no other use for such a public display of the misallocation of government power. But that threatens to lead us off-topic...

The only real way within the public's power to affect the oil price increase is to simply limit the use of oil. Unfortunately, the infrastructure of the United States pretty well prohibits that. It's a rare and fortunate individual who lives close enough to his/her place of employment to allow the use of alternative modes of transportation. In St. Louis (where I live), the metropolitan area is so spread out that it's nearly impossible to get from point A to Point B without a car. The bus and train systems are underused and underdeveloped, respectively. Bicycle lanes are a new concept that have only recently begun to see development. And thousands of homes within the city limits lie vacant or neglected, all of which could be put to good use by citizens making the choice to live nearer to where they work.

While the gas prices haven't hit me so much (yet), I've still been taking steps to help alleviate the sting for when the time comes. I've dropped dime on a serious commuter bicycle. My forays are limited to my neighborhood, visiting smaller shops for my needs, even at the expense of having to pay a little bit more for goods and services. And I'm eagerly awaiting the day that an opportunity opens in my company that will allow me to work closer to home.