Oil Drops Below $90 Oh Oh

[Meep-Meep]

What I find interesting about this situation is the lesson on beggars being choosers. Greece has been going broke due to uncontrolled social spending. Need a bigger pension? The state will pay for it. Need more vacation time? No problem the state will pay for it. Want to work less for more pay? No problem the state will pay for it. If California was it's own country, it would be Greece. But they spent themselves into the poor house, and their only way out was to beg for money from the European community. The community knew Greece going down would be bad for them, so they agreed to cover Greece's debt but only if Greece got its financial act together and implemented austerity measures to decrease their social spending. The Greeks loved all the money coming in, but didn't like the austerity measures and elected themselves a new government that promised to reject the measures.

So now we have all these Europeans working damn hard to make a living, seeing their tax dollars being sent to Greece and Spain, and France soon, to help them out, while the people of these countries are refuting any sense of austerity and want to continue that policies that got them in trouble in the first place. Greece thought they could blackmail these countries by threatening to withdraw from the Euro, but these countries called their bluff and just started implementing plans to deal with the fallout of losing Greece. Now Greece is looking at the potential for 34% unemployment, a loss of over 50% of their wealth, and rampant inflation. Will the Greeks wake up and get their house in order?

All this reminds me of US taxpayers seeing their hard-earned dollars being taken to support the irresponsible lifestyles of so many in our country. Sure would be nice if we handled the situation as well as the Europeans have.

Yep, CA is a mess as well but we are no where near Greece. Last I heard it costs us 6% to service our debt but it costs Greece 150%. Talk about an express elevator going down! I have to wonder if the curve of social spending is not linear. At least here in CA the recipients of gov't money also vote, and they will most likely vote themselves more gov't money. Then they tell two friends and the problem compounds itself at a rapid rate until they are significant in numbers. You can't have an economy without industry, and with industry leaving our state the problem just gets worse.

 

[gocubzgo]

The oil being sold today at $88 a barrel hasn't even been pumped out of the ground yet. It'll be a couple of weeks if not months before we see the crude price reflected at the pump.

You are correct about the oil being sold today being weeks away from our local gas pumps. Yet any time there is some event or natural disaster that is likely to raise the price of gas, we see the price increase at the pump within a day or two of the headlines.

 

[Sixpack70]

With all of the eurozone issues, oil prices and everything else, it makes me think I need to buy another car. That way when everything collapses I will have 4 cool classic cars rather than 3. Sort of an investment, right?

 

[Stumper]

I agree with you 100%!!! Nothing like an old Mopar for an investment. I have just what you need - call me!!

 

[SUPERSTOCKRACER]

historically every election year the gas prices drop.

 

[Budnicks]

We pay $0.66 cents a gallon, just in taxes, for gas here in Calif., the highest in the Nation & still have crappy roads... I was reading my Chevron stock information, they only make about $0.08 cents a gallon profit on regular gasoline, Exxon was about the same $0.06 cents, my Shell stock didn't have the break down... So the state of Calif. makes 8.5-11 times as much as the suppliers... Hummm, something is really wrong there... And the govt. all say the Oil Companies are the greedy bast---ds...

 

[Richard Cranium]

We pay $0.66 cents a gallon, just in taxes, for gas here in Calif., the highest in the Nation & still have crappy roads...

I was in CA a couple of months ago & drove several hundred miles on your roads. Believe me when I say that your roads are fantastic in comparison to the roads here in Massachusetts.

 

[Budnicks]

yep

I was in CA a couple of months ago & drove several hundred miles on your roads. Believe me when I say that your roads are fantastic in comparison to the roads here in Massachusetts.

:iamwithstupid: I would tend to agree, we should have better roads with the money we spend every day @ $0.66 cents per gallon taxes on 10's of millions of gallons of gas & fuel... I guess our roads are much better than some roads, well our major Hwy's anyway, if not most of the roads back in the northeast, especially were you get lots of snow, freezing rain & have much more severe winters than most of Calif. does, we have much better & much dryer weather here, most of the time... Until you drive in the foothills or Sierra mountains, off the main major HWY's in "snow country" or rural areas in Calif. off the beaten path, closer to were I live, they are pretty bad for the taxes we have to pay, to keep them maintained... "I think ", that all the money goes to the upkeep of/by "Cal-Trans" of I-5, 10, 15, mountain passes like I-40, 50, 80, then others like Hwy 395, 108, 89, 58, 33 & 4 are neglected, lots of money spent on the bigger major populated areas around Hwy's 99, 680, 780, 580, 280, 1, 101, etc. in the north & the maze of LA's south regions "many" freeways & major Hwy's... You would think with the "100's of Billions or Trillions of dollars" our fuel taxes fund, there would be better roads, not just the major Interstates & Hwy's, was my long winded point...

 

[SUPERSTOCKRACER]

We pay $0.66 cents a gallon, just in taxes, for gas here in Calif., the highest in the Nation & still have crappy roads... I was reading my Chevron stock information, they only make about $0.08 cents a gallon profit on regular gasoline, Exxon was about the same $0.06 cents, my Shell stock didn't have the break down... So the state of Calif. makes 8.5-11 times as much as the suppliers... Hummm, something is really wrong there... And the govt. all say the Oil Companies are the greedy bast---ds...[/QUOTE

NY's tax is at a wopping .51 or .55 cant remember.
I fill up in NJ 3x's aweek in order to save some cash.
NJ is .65-.85 a gallon cheaper compared to NY.

 

[Kern Dog]

We pay $0.66 cents a gallon, just in taxes, for gas here in Calif.,.. And the govt. all say the Oil Companies are the greedy bast---ds...

Typical "Class Warfare" tactics.
When the Gov't makes more money per unit than the actual producer od said unit, there really is no other way to look at it.

 

[Bruzilla]

You are correct about the oil being sold today being weeks away from our local gas pumps. Yet any time there is some event or natural disaster that is likely to raise the price of gas, we see the price increase at the pump within a day or two of the headlines.

That's because station owners know a price hike is coming, so they increase prices immediately so they'll have extra revenue to refill at the higher price. Then they make out on the back end by keeping the prices high while they pay less when prices go down. This is why my sympathy for gas station owners is only slightly higher than that for lawyers.

 

[Bruzilla]

We pay $0.66 cents a gallon, just in taxes, for gas here in Calif., the highest in the Nation & still have crappy roads... I was reading my Chevron stock information, they only make about $0.08 cents a gallon profit on regular gasoline, Exxon was about the same $0.06 cents, my Shell stock didn't have the break down.

The oil companies are always framing their profits in terms of per gallon of gasoline sold, but I don't think that shows a true number. It used to be oil production was one long chain leading from the ground to the pump, now it isn't. Now we have Upstream and Downstream production that breaks the chain into three segments: getting the oil out of the ground and to the refinery, refining the oil into gasoline and other products, and distributing and selling the gasoline at retail. An oil company may only make eight cents of profit on the sale of a gallon of gasoline, but they're also making money during the other phases.

Shell can pump oil from the gulf and deliver it to Louisiana refineries for about $22 a barrel, with the future for that barrel selling at a market price of say $90. Someone just made $68, who was it? I've been trying to find out for years who gets the difference in price between production and future sale, and can't find out. Shell can then refine their own oil, or sell that oil to an energy company to refine it and then buy the refined gasoline from them. Most oil companies report the price they paid for a gallon of gasoline and the price they sold it at and calculate profit from that, but that doesn't take into account the money they made from selling the oil to the energy company.

This is why I put no faith in anything the oil industry says. There is so much manipulation of the price that the only real determiner is what the market will bear.