The Daily Show: The Price of Oil
By Nicole Belle Thursday Mar 06, 2008 11:50am
Download | play Download | play (h/t Heather)
Jon Stewart and Senior Middle Eastern Correspondent Aasif Mandvi look at the costs behind the startling $104 / barrel of oil. Actually, it closed at $105.97 yesterday.
MANDVI: Well, Jon, it’s true, oil prices have reached an all time high. But before consumers do something drastic, like purchase a hybrid—or as I call them, a mutant—consider the fixed costs that go into producing your typical $104 barrel of oil. Right up front, $5 goes to new development of new oil resources. $10 goes to new technology research. $15 a barrel goes to making those commercials where oil companies try to convince you they’re not raping the environment and $25 goes toward blackening the oil.
STEWART: If I may, just very quickly, right there stop you, I was under the impression that oil comes out black.
MANDVI: That’s what Hollywood would have you believe, Jon. No, oil actually comes out of the ground looking like this. A pretty rainbow! And it burns clean. Cruding it up ain’t cheap.
STEWART: Aasif, so that adds, I guess, $55 a barrel to the oil, what about the rest of the cost?
MANDVI: Well, it fluctuates, depending on how chaotic the political situation is. That’s why the Middle East loves George Bush. Without him, oil prices plummet; Middle Eastern revenue streams dry up and the terrorist are having to work second jobs at Bennigans. Or, the Middle Eastern equivalent: Applebee’s.
I'm a little surprised that Mandvi didn't factor it the requisite astronomical, record-breaking profits that the oil companies are realizing. That's got to be at least $40 out that barrel, right?
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His comments on Florida were better.
And don't forget the high costs involved in building artificial islands that resemble the continents of the world, buildings taller than anything else ever built -- you know, important stuff.
Record oil prices and record oil profits.
Nothing to see here.
I expect that a lot of the cost is for all of those barrels. I'd bet the oil would be a lot cheaper if they didn't sell it in barrels, but sold it in larger quantities. Plus, think of all the metal they'd save if they didn't use so many barrels. Shipping costs would probably be cheaper, too. I guess they could make it slightly cheaper if they used plastic for the barrel instead of metal...
/snark
Ah....I do miss cable sometimes...
The Bush Administration has predicted that oil will be $54 per barrel by 2050.
What's the rate oil company profits are rising compared to their corporate taxes?
You gotta laugh to keep from crying.
Leslie @ 7:
Corporate taxes are near zero. Profits are in the stratosphere.
If things keep deteriorating...soon...a gallon of gas will cost more than a gallon of water!!
Then you'll see action! The yuppies will revolt!!
Alice (Hussein) in Wonderland @ 9:
Exactly if you make under $125,000 a year the entire burden is on you. Or us as the case may be.
Alice (Hussein) in Wonderland @ 9:
They get tax breaks.
Hussein AND Proud @ 10:
I don't know. The yuppies will just buy a super expensive high mileage Hybrid the average person could never afford or even get an approved loan for then say . . .
See, this is the way you do it! Aren't we special? Just be like us! You can buy one on Google!
I liked the wind cats joke. "Cats that move solely by wind"
Hee-hee
Hussein AND Proud @ 10:
No they won't. You'll just invade Canada for the water and the tar sands oil.... and to free us Canadians from "socialized" medicine. No revolt, endless war.
Ron @ 12:
LAMO your damn right they get "tax breaks".
Cayman Islands or Dubai anyone?
Ron @ 12:
And when congress tries to stop giving them tax credits, the MSM calls it "raising taxes on 'energy' companies."
Worry NOT folks! According to my republican friend...oil is now a "renewable" resource!!! We're SAAAAAAAVED!
Alice, I felt like crying ever since Bush got reelected in 2004. I was berated by family members, called unpatriotic, and was told I had no moral standing. And what does my family think now? They're suprisingly mute and the subject of George W. Bush.
Vote for McCain and vote for more of the same. The SAME bUSH POLICIES.
Yes. Our oil money help profits the terrorist organizatins to assasinate politican leaders like Benazir Bhutto. Good job, Bush. NOT!
"Hussein" bookworm @ 15:
With your government's meddling in our election affairs all bets are off.
I could have predicted they would invade the west for the resources. Now that you mention it, you eastern canucks should be liberated from your universal health care system and saved by a universal personal health care insurance premiums system.
Its the American way.
Endless wars, endless war profits.
liberalHUSSEINmoderation @ 18:
LOLOLOL!
What a freakin' country. These jackasses have gotten so used to not being challenged on any of their bullshit, that now they just make shit up as they go along.
What is also not mentioned is the fact that at least half of the price per gallon of gasoline goes to state and federal taxes. Besides, its not just the price of crude oil that is going up. All commodities are rising and well beyond their previously set record levels. These goods as well, when bought at those higher costs by a producer or manufacturer are then passed onto the consumer.
The price of crude oil is only one of the many well known commodities that people see day to day so it gets a lot of the headlines. However, as I have indicated, its only one of many costs that we consumers have to contend with. Bread, milk and many other products are rising in price at very fast clips.
Okay then let me do my best MSM parody.
What do you think?
Barack Obama should drop out of the race.
Hillary Clinton should drop out of the race.
The race should continue to Pennsylvania April 22 and possibly the national convention in August.
It's time for party elders Al Gore and Howard Dean to convene a meeting to sort this out.
"Hussein" bookworm @ 15:
Already fighting over great lakes....read somewhere (don't know where) that the city of Chicago wastes more "clean" water than any province within Canada, AND sends more pollution into the lake than any other city or province. That is disgusting.
This Daily Show bit was the funniest and politically dead-on pieces
that the show has done since coming back from the strike.
Their back, baby!
L.A. Confidential @ 25:
I'm not a "huge" Al Gore fan. Saw his movie, it has flaws (it's a political statement more than anything else, but) BUT if Al Gore announced he had decided to run tomorrow for Dem candidate, Hillary and Obama's support would completely disappear.
...and when the crude oil runs out, they'll want to go back to whale oil.
Perhaps then, President Nader will seize all assets of Exxon etal. and use the monies to fund a project to find a replacement for crude/whale oil.
Concerned"Hussein"Canuck @ 26:
Most of the corporate stuff here in the US is disgusting, Concerned"Hussein"Canuck
McCain calls for tax cuts, job training.
Oh man. Now thats truly inspiring and dynamic.
Thats like so cutting edge and ahead of the curve I'm just overwhelmed! Man this guy really thinks outside of the box.
I thought the terrorists would have to get a job as taxi drivers.
Bennigan only hires illegal aliens.
During the winter do cab drivers get hacking coughs?
miss_kitty Hussein @ 30:
Here too missKittyHussein......sad world we live in
L.A. Confidential @ 31:
Jack in the Box?
House panel questions high pay for CEOs AP - 38 minutes ago
WASHINGTON - Lawmakers confronted corporate executives Friday about how they managed to take home hundreds of millions of dollars in compensation while their companies were taking a financial nosedive from the subprime mortgage crisis.
Okay now we are talking let's stay on course now and keep the heat on these slimeball CEO's.
The daily show might want to do a show on the U.S. dollar next. That is definitely not a pretty picture. Heck, just yesterday the U.S. dollar index nose dived to a 52 week low of 72.863. The dollar, the Federal Reserves monetary policies, the massive Government debts, and the Government's over spending on a whole host of programs also effect the prices of all goods. They are all intertwined and related. Here is a U.S. dollar index chart charting one year. The two year chart is even worse:
http://quotes.ino.com/chart/?s=NYBOT_dx
L.A. Confidential @ 35:
Wow, that's weird. Wanna see something weirder?
LA, Watching this hearing is a practice of futility. These CEO's have black hearts. I truly believe we are going the way of Rome.
Alice Hussein @ 22:
Yes but you will have a problem keeping us in line. Most of us are politically liberal and could not care one little bit about the religious faith of our leaders (and about half of them have been Catholic). We have same sex marriage and no abortion law (although the present government jackasses are trying to get around that one) We sure won't fit in.... oops, being different didn't save Iraq did it??
L.A. Confidential @ 35:
CEO . . . No one ever reported to me the company was taking a nosedive. FORE!!!!!!!!!!!!!!!
Here in Far-Eastern Canukistan, gas is $1.16 /litre. Canadian. (Thats like $7.50 US :p )
earl Hussein Guevera Oswald Trotsky Cleaver @ 41:
1.10 here in mOnstario......thank the invisible pretend being in the sky, that we produce it, otherwise we'd have to pay less for it like the US does.
Concerned"Hussein"Canuck @ 28:
Oh yeah...he'd damn sure get my vote...again!
Joe O. @ 36:
Sorry, I was mistaken. Yesterdays U.S. dollar index closing price was the previous 52 week low. Todays dollar plunge broke that 52 week low as the index dropped 72.462 after the jobs report came out.
Its amazing. We Americans get angry when the prices of goods go up, but pay no mind to the the fact that the U.S. dollar we use is dropping through the floor at the same time. In other words, or U.S. dollars are buying less and less with each passing day.
P.D. @ 38:
Hell even Bush Co is finally admitting it.
AP - 40 minutes ago
WASHINGTON - President Bush's top economic adviser said Friday the nation's economic growth could dip into negative territory for the current quarter, an assessment that tracks with many outside experts but is the most pessimistic to come so far from the White House.
Well, well...........looks like SOMEBODY don't wanna embarrASS Miss Hillary......well, 'specially if she finds the "time" to disclose such things as her tax records.........
L.A. Confidential @ 31:
Yeah...and what his Presidency will give us is job cuts and a need for tax training.
L.A. Confidential @ 45:
Negative growth......is that like oh I don't know, say, what is the opposite of growth? Recede, as in recession? Naw, couldn't be.
L.A. Confidential @ 45:
The President was unavailable for comment. He was dancing in the hallway.
Obviously, but I'd like to know how they're doing it!?
Hussein AND Proud @ 49:
LOL.......his new theme song "You can't touch this.....".......he has a new pair of genie pants too!
Wasn't the Iraq War going to make oil cheaper? Wasn't Iraq oil going to pay for the war? Americans - screwed again.
OT
It's "Hussein" Day at the TPZoo today.
Concerned"Hussein"Canuck @ 48:
If the White House came out and stated that pessimistic assesment then the situation is even worse than I thought. The White House has every reason right now to adjust or distort the economic data it releases to the public (I.E. elections). My guess is, the White House came out with that assesment because they can not adjust those figures in anyway to show improvement. Hell, the last to GDP numbers indicated that the U.S. economy virtually stalled for at least two quarters and that is with the GDP deflator added to it.
Concerned"Hussein"Canuck @ 37:
Ah-HA!! It's you Canadians who are takin' our 'murcan jobs! Damn you Third World countries! Give us our 43,000 jobs back, or else we'll inflict er....... provide you with democracy like we did in our Iraq success story.
Joe O. @ 53:
My internet provider's homepage reported the other day that Ford is almost bankrupt. Guess the old "we can't make a better vehicle, so let's raise the prices" business plan didn't pan out.
Concerned"Hussein"Canuck @ 42:
And in Norway it's $7.00/USG
Get used to it, I say.
So, the profit on a barrel of oil is about 3% after costs. That's a very small profit margin. The huge profits of the oil companies comes from two sources:
1) The sheer VOLUME of oil sold. Even at ~$0.09 per gallon profit, they make billions because of the amount of gallons sold. Also, I think profit margin on jet fuel and plastics may be higher, but automotive fuel has a very small margin.
2) Tax breaks. Not paying taxes on profits really helps the bottom line.
Don't focus on the "cost" of gas. It's a fallacy to think that oil companies make huge profits from the price at the pump. They make money by not paying for drilling rights, getting tax breaks on profits, and moving most of their earnings offshore.
A certain nominee's last name rhymes with "Hussein" ...
Candidate Bush Called on Clinton to “Jawbone OPEC” to “Open the Spigots.” Bush on how to handle OPEC: “What I think the president ought to do is he ought to get on the phone with the OPEC cartel and say we expect you to open your spigots. One reason why the price is so high is because the price of crude oil has been driven up. OPEC has gotten its supply act together, and it's driving the price, like it did in the past. And the president of the United States must jawbone OPEC members to lower the price.” [The New York Times, 9/29/00; George Bush, Republican Primary Debate, Manchester, NH, 1/26/00]
Just another lying republican who will say anything to get elected.
No silly, that's just what the Bushies told the rubes, so they'd get on board the whole imperial enterprise.
Yours truly,
Leslie Hussein
>Ah-HA!! It's you Canadians who are takin' our 'murcan jobs! Damn you Third World countries! Give us our 43,000 jobs back, or else we'll inflict er....... provide you with democracy like we did in our Iraq success story.
Please God, anything...just not the democracy , or [gulp] freedom ...
Matt Hussein in Texas @ 54:
I think we started "trading with" other nations, instead of just importing. Maybe we just don't have enough small children to import all those leadpaint hotwheels cars?
But all isn't bad in the US:
Wal-Mart Stores Inc., the world's largest retailer, said today its renewed focus on low prices paid off with a 4 percent rise in profit for its fourth quarter as holiday shoppers bought discounted groceries and home electronics as well as health and wellness products.
International growth also helped boost profit and sales. Stores in 13 countries outside the U.S. accounted for about 25 percent of total company sales in the quarter, up from 23 percent a year earlier.
Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 per share, compared to $3.94 billion, or 95 cents a share, a year earlier.
I guess I am too uneducated to understand why the oil companies get a tax break for development of alternative fuels. What is their incentive for finding new oil alternatives? If oil is replaced with something else won't they lose money? Can anyone explain this to me?
A good comparison would be if you asked a peanut farmer to find an alternative to peanut butter without using peanuts. Wouldn't that put him out of business? Like I said I guess I'm just not smart enough to figure this stuff out.
#57 Aziz:
US News & World Report said that for Exxon anyway, their profit margin was 7.5%[?], while all of manufacturing's was around 5.something%. But their shareholder equity was around 10%, if I recall correctly.
Also, the windfall profits tax was repealed in 1988.
Joe O. @ 24:
Yup, and the whole ethanol push that is and will only increase as the result of oil prices, is driving the price of corn sky-high. So all corn-related products jump in price. And I don't just mean nacho chips and corn flakes. Many meat products and dairy products for example are corn dependant as a feed source.
To make it worse, the evidence seems a little les than clear on corn-based ehtanol. I have seen some reports that opine that more energy is used to produce a gallon than you get out of that gallon when you burn it. Not sure who to believe on that score bu the fact that's there's even a debate makes me wonder if we should be looking at something else.
Janet @ 63:
Good questions. What if there is no more oil to make profit off? What if the peanut farmer could not grow any more edible peanuts? Would it not make sense to change?
Janet @ 63:
Corner the new market on the future technology. If it's a good replacement for less cost, people will flock to it.
It was a peanut farmer that tried to get the US off its Oil dependence in 1975 ...interesting.
(Look where it got him).
earl Hussein Guevera Oswald Trotsky Cleaver @ 61:
Please God, anything...just not the democracy , or [gulp] freedom ...
Yeah! Be nice to us or we'll bring democracy to YOUR country!
earl Hussein Guevera Oswald Trotsky Cleaver @ 68:
No kidding.....even his own party screamed for his head.
I take a small comfort that a party never retains the White House when the economy is tanking.
Speaking of names that rhyme with Hussein, guess who's middle name rhymes with Saddam? Rodham...Clinton...err...McCain.
Leslie Hussein
earl Hussein Guevera Oswald Trotsky Cleaver @ 68:
Actually, I often wonder where we would be today if Reagan didn't dismantle all the efficiency and alternative fuels programs Carter put in place all those years ago. Would we be mired in the middle east? Would we have spent so much time screwing around in their politics? Would there be such hatred of the US from the middle east?
Who knows, but I would have prefered to be able to have found out.
There is a great read on the subject that came out in the mid 80s called Energy Future. Check it out.
Oil is the ONLY commodity that defies the operation of the market. In any other business, when the cost of goods sold goes up, profit goes down. But, when the cost of oil goes up, the oil companies' profits go UP. Go figure.
Also, despite the fact that demand is going down, and supply is staying the same (if not increasing), you'd think that too would exert downward pressure on prices, but it doesn't. Go figure.
All of which points irrefutably at the fact that the oil companies are manipulating both the price of oil and the price of gasoline. And what're our supposed "oversight" bodies doing about it? NADA.
The solution: NATIONALIZE THE OIL COMPANIES! Most European companies (not to mention Mexico, Venezuela, Russia and others) have done so. What do they know that we don't? That's the only way we'll rein in the excesses of these merchants of greed.
Leslie @ 72:
(via MSNBC's "First Read")
Bill Clinton profits from company tied to felon, China
March 7, 2008
By Jim McElhatton - The spring before his wife began her White House campaign, former President Bill Clinton earned $700,000 for his foundation by selling stock that he had been given from an Internet search company that was co-founded by a convicted felon and backed by the Chinese government, public records show.
Mr. Clinton had gotten the nonpublicly traded stock from Accoona Corp. back in 2004 as a gift for giving a speech at a company event. He landed the windfall by selling the 200,000 shares to an undisclosed buyer in May 2006, commanding $3.50 a share at a time when the company was reporting millions of dollars of losses, according to interviews.
A spokesman for the William J. Clinton Foundation declined to identify the buyer who was willing to pay so much for a struggling company's stock, saying only that the transaction was handled by a securities broker. It occurred seven months before Sen. Hillary Rodham Clinton announced her bid to run for the 2008 Democratic presidential nomination.
Ewwwwww.......and they wanna go negative on an opponent? Boy oh boy...Repubs are gonna LOVE watching these two Dems destroy their voters.
Concerned"Hussein"Canuck @ 66:
I say there will almost always be oil left. It will be insanely expensive to find the little pockets of it left and pump it out, but there will be some. But by then we'll have converted to alternatives like plant oils thus making food and farm quite expensive.
Why can't conservatives conserve?
Doubting_Hussein_Terrance @ 76:
No money in conserving. Where I live, we have just been told that our hydro bills are going up 30% and more in some spots, to ensure profits because everyone is conserving and not using enough.
Haha! That was funny. I love Mandvi. C&L gets me in trouble at work almost everyday.
"Hussein, you watching TV on the 'puter again!?"
Concerned"Hussein"Canuck @ 77:
Jesus saves, shouldn't you?
Yup, invoke religion and see if the right will conserve!
Jesus saves!
He Shoots!
He Scores!!!!
GOOOOOOOAAAAAAAAL!
I'm just worried what is going to happen to the price of oil when the demand for oil outstrips the supply. Right now demand is being meet by the supply at the current price. Once The US, China, India or Europe cannot get their oil at any price, the price will shoot through the roof. We'll be wanting $106/barrel oil again.
kep306 @ 81:
If oil was made from "fossils" shouldn't it be a continuous process? Hell, if oil is made from fossils, there should be a big gusher in Warshington in CONgress.
Leslie @ 72:
Yeah, and JOHN McCain shares the same first name with........ JOHN Wayne Gacy, infamous pedophile/murderer. Hmmmmmm - so that OBVIOUSLY means McCain............
liberalHUSSEINmoderation @ 80:
LOL!
Best post on this thread yet!
Concerned"Hussein"Canuck @ 77:
No money in conserving. Where I live, we have just been told that our hydro bills are going up 30% and more in some spots, to ensure profits because everyone is conserving and not using enough.
Isn't it nice to see that soulless big business/corporate welfare is more important than the people's welfare.
Leslie @ 50:
They do it by donating mightily to candidates from both parties, because whichever one is elected, they will still be in the bag.
Government of the corporations, by the corporations, for the corporations… and their buddies.
It is simple.
The news comes warning us about $4.00 a gallon gas. Then later it's only $3.60 a gallon and we breathe a sigh of relief. Thank God it didn't make it to $4.00 a gallon. Of course when the oil company quarterly reports come out, they show the record profits that the $3.60 got them. Then the news warns us about $5.00 a gallon gas and it only gets to $4.75, oil companies report record profits. Repeat until the real oil crisis hits and then, well by then it may too late. Now is the time to get our heads out of the oil sands and into alternative energy and conservation. NOW! Please and thank you.
"Hussein" bookworm @ 39:
Most of us don't fit in down here either. We're political prisoners.
Come on everybody, join in! Now if only L.A. or PoP would do it too.
Anyway, we'll see $4.00 by the end of May.
Bush has become such a professional liar, I don't think he can tell the difference between what he says and the truth.
When it comes to oil, Americans don't get it.
Oil in Nov. 2000 = about $30 US/barrel
Oil in Mar. 2008 = about $105 US/barrel
That's an increase of 217% in 7 1/2 years. Right?
Wrong.
Oil trades in $US, but everyone outside the US (75% of the world oil market) buys it in their local currencies.
Since Bush was elected, the US dollar has fallen drastically against the currencies of every one of its trading partners. In 2000, it took about 90 US cents to buy 1 Euro. Today, 1 Euro costs $1.53 US. The Euro has appreciated by 70% against the US$.
So in Euro terms, a barrel of oil that cost 33.33 Euros in 2000 ($30 US / .90) now costs about 68 Euros ($105 US / 1.53).
The barrel of oil that has more than tripled in value in the US has only doubled in value in Europe over the past 8 years. The latter increase is still a lot, but nothing like what's happening in the USA.
Same effect can be seen in terms of Canadian $$, the UK pound, the Yen, Yuan, you name it. When your currency collapses because of uncontrolled deficit spending, every citizen instantly becomes poorer in comparison to people in other countries.
This inflation is the entirely predictable result of Bush's tax, fiscal and monetary policies. It's a special tax, just for you, your children and your grandchildren.
I can't believe that so many people in the US are so ignorant about Oil Prices and the Industry as a whole. The Big Oil companies do not set the price of oil. Also the demand for more gasoline just doesn't come from the US - it is a world commodity. China & India are one of the reasons due to their demand on energy for higher prices. The market is driven by supply and demand. Also look at the taxes which are paid on every barrel of oil or every MCF of natural gas to the Federal Government and individual states. The oil & gas industry employs 1.9 million people directly. Provides jobs indirectly to 4.0 million people. Develops innovative technologies to advance understanding of science and engineering to help improve the environment. Supports social programs at the local, state and federal levels through the billions of dollars that it provides in tax. Makes it possible for people to enjoy the freedom of mobility – the opportunity to travel where they want, when they want, and at a competitive price. Provides its shareholders, many of which are pension funds, with a return on investment that helps workers and retirees improve their financial security. WHO OWNS BIG OIL ? Almost 43 percent of oil and natural gas company shares are owned by mutual funds and asset management companies that have mutual funds. Mutual funds manage accounts for 55 million U.S. households with a median income of $68,700. Twenty seven percent of shares are owned by other institutional investors like pension
funds. In 2004, more than 2,600 pension funds run by federal, state and local governments held almost $64 billion in shares of U.S. oil and natural gas companies. These funds represent the major retirement security for the nation’s current and retired soldiers, teachers, and police and fire personnel at every level of government. Fourteen percent of shares are held in IRA and other personal retirement accounts. Forty five million U.S. households have IRA and other personal retirement accounts, with an average account value of just over $22,000. 23% is owned by individual investors. 5% owned by Institutional Investors. 1.5% owned by corporate insiders. 13% of every gallon of gasoline goes to TAXES.U.S. refiners have made great strides in efficiency to generate billions of dollars in savings for gasoline customers. In 1980, the cost to refine, market and distribute gasoline averaged about $1.02 per gallon (adjusted for inflation). By 2005, it averaged about 60 cents per gallon. The federal government has restricted exploration and production in promising areas offshore and it has been slow to remove bottlenecks in government permitting onshore.
80 Percent of the world's oil and natural gas reserves exclusively controlled by foreign governments. 1.6 Percent of the world's oil and natural gas reserves controlled by U.S. energy companies (the total amount of reserves managed by all investor-owned companies is just six percent). 88 million Barrels of oil a day that the world uses. 55 Percent increase in global energy demand between now and 2030, according to the International Energy Agency. 22 Percent increase in the amount of oil the U.S. will consume in 2030 compared to 2005, according to the U.S. Department of Energy. 21 Percent increase in the amount of natural gas the United States will consume in 2030 compared to 2005, according to the U.S. Department of Energy. $1.3 trillion Amount America's oil and natural gas companies invested in long-term energy initiatives between 1992 and 2006. $98 billion Amount America's oil and natural gas companies invested in energy technologies, including renewable and alternative forms of energy, over the past five years in North America . 61 Percent of oil the U.S. will have to import by 2030, according to the U.S. Department of Energy, up from 60 percent in 2006 and 36 percent in 1980. 6 Percent of energy use currently supplied by renewable sources, according to the U.S. Energy Information Administration, which expects the figure to increase by two percent by 2030.
The oil and natural gas industry is one of the most heavily regulated in our country, and the U.S. Federal Trade Commission, other federal agencies and state attorneys-general have investigated the causes of price spikes for decades and have consistently found that it is the markets that are responsible for price fluctuations. Quoting the FTC : "in no other industry does the FTC maintain a price monitoring project such as its project to monitor retail gasoline and diesel prices."
The federal government has restricted exploration and production in promising areas offshore and it has been slow to remove bottlenecks in government permitting onshore.
The latest published data for the third quarter of 2007 shows the oil and natural gas industry earned 7.6 cents for every dollar of sales compared to 5.8 cents for all U.S. manufacturing, mining and wholesale trade corporations and 9.2 cents for U.S. manufacturing excluding the financially challenged auto industry.
Most oil produced in the US is provided by Mom and Pop operations - hard working people who invest in marginal wells to provide you with gasoline. US refineries are producing a maximum rate - how many refineries have been built in the US in the last 30 years to keep up with demand - ZERO.
It's easy to point fingers - but before you do - get some facts. The biggest revenue to the federal government comes from ROYALTIES for leases that Producers pay to drill on government owned land. Oil & Gas is a complicated business and a lot of money invested to bring a barrel of oil out of the ground or heat your home with natural gas. You just don't punch a hole in the ground and get oil or natural gas. The cost to drill just one well is usually a minimum of 1 million dollars or more depending upon the depth of the reserves. ANWR could produce 1.4 million barrels of oil per day - so if you want the price of oil to go down - encourage your representatives to support drilling in these areas where we have abundance of supply but due to government bull oil can't drill there.
You want to learn more about the facts go to: www.energytomorrow.org - all of these facts are from this website.
Annoyed Canuck @ 91:
I think your post was perfect, except for one thing. Bush doesn't actually set monetary policy, that's the Fed's job. He is responsible for wasting trillions of dollars on a useless occupation (actually he is just a puppet, the NWO are the ones who wanted to go into Iraq and Afghanistan). Inflation IS entirely predictable, it always goes up. Inflation is NOT rising prices. That's just one of the CONSEQUENCES of what inflation really is, and that is an increase in the quantity of money and volume of spending, which the Fed controls directly. The Fed has increased the supply of money by 40% in the last two years! OBVIOUSLY if you put that much new money into the economy, prices will rise, because real productivity cannot possibly rise 40% in two years. Since goods and services increase in supply by around 2 or 3%, rising prices WILL occur if money supply goes up by more than that. The Fed is printing so much money because that is the only way to fund the US Empire. This method, incidentally, is the same method the Roman Empire used. They devalued the gold coins by adding metals to them, causing an increase of money in circulation. They collapsed because inflation (debasement, printing, same thing) destroys the division of labor because business doesn't know what the fuck the prices of things should be.
Oil is super high in price for the same reason commodities and more recently consumer goods are super high in price: The Fed is printing money like it's going out of style. Since the Fed is still printing large amounts of money, we should expect prices to continue to rise. Gold is going to go over $1500 an ounce, and oil is going to go over $130 a barrel.
This is one of predicted results of having a fiat money standard, and there are mney free market schools of thought that knew this would happen.
The ULTIMATE end point of having a fiat money standard is full fledged socialism and/or the total destruction of the dollar. There can be no other result. Money backed by nothing, with the ability of increasing in supply at virtually no cost, WILL INCREASE until it is useless.
Just look back to Germany in the 1920's. The German government printed so much money that people had to carry wheel barrels full of paper money just to buy a loaf of bread. The same thing will happen here too. Everytime a country has gone off a commodity money, the result has ALWAYS been the destruction of the currency.
SusaN @ 92:
Your post reads like a press release from an oil industry PR flack. The website you cite is a published by the American Petroleum Institute, the major oil industry association and lobbying entity in the US.
Not exactly an unbiased source of information.
The facts you cite are well and good, but selective. What you have to say about ANWR is total moonshine. Drilling ANWR will have no effect on world oil prices whatsoever. The world economy consumes every bit of the current limit of world production (85 million barrels per day). The 'supergiant' fields in Saudi Arabia are now in decline, even with the use of advanced recovery technology. ANWR, even it if were to flow at 1.4 mm barrels per day, would not in an of itself add enough to world reserves to reduce price trends. Not when oil demand continues to grow by 4% per year. ANWR contains enough oil to satisfy world demand for 1-2 weeks.
Annoyed Canuck @ 94:
I think that people need to understand a simple fact. If the Fed prints too many dollars, they become less valuable. Because they have devalued the currency to such a low level, producers of goods will only accept MORE of them in exchnage. The price of oil has not actually risen, if you use a different measuring stick for calculating value. The price of oil, IN GOLD, has not changed in 8 years! Oil production and gold production have continued as per normal. There is no oil crisis or fradu going on, on the side of oil SUPPLY.
If we measure the price of oil not in gold but in paper dollars instead, which is what almost everyone does naturally, then it looks like something huge happened to oil. But NOTHING huge has happened to oil. The only thing that has changed is the value of the US dollar. The value of the US dollar has PLUMMETED in recent years, because there is SO MUCH MORE OF THEM today than 7 years ago. This means that if you offer a producer US dollars, you are going to have to give more of them, because people want to trade value for value.
Nobody can expect OPEC to produce MORE oil, for the sole reason of lowering the price of it in dollars, if the dollars themselves are worth so little. What needs to occur is for the Fed to STOP the money printing press. If they do that, then there will be a much needed recession, and the value of the dollar will start to recover again, and producers will not ask for so many dollars in their exchanges with people who offer dollars!
I think the best advice I can give people is to say that they should never use the dollar as the ultimate standard of value. I know that this is hard to do, considering how everyone focuses on how much they make, what things cost in dollars, etc. What people need to do is to look at REAL GOODS, and then see how dollars responds to THEM. Oil production is carrying on as normal, but dollars are NOT carrying on as normal. One side of the exchange is changing value, and it is NOT oil. It is the dollar.
Call your Congressman and tell them to tell the Fed to STOP PRINTING SO MANY DAMN DOLLARS.
Come on people! Bush has clearly saved us from inexpensive oil! Show some darn respect!
Is the nightmare over yet???
So now let's just try to imagine what the transcript for the super-secret meeting at the White House during 2000 might look like; how about " (Cheney) Do I hear $10 a barrel for us if we get oil to $60 a barrel"?
Bush: "that's ridiculous! I know we can get to at least $70!, maybe even $90.! That will cost you $25 a barrel for sure, 'cause I am NOT gonna take the heat from "John & Mary Sixpack" for anything less than that!
O.K. what are the numbers of the Swiss accounts for all this?
(Privately to the Exxon guy in the next chair "Whew, if these guys negotiated like this every time, we'd be out of a job"! "Yeah, wish this guy was as incompetent as they keep saying he is"!
When I saw this piece, I didn't laugh. I felt like I was attending a funeral. Can't remember the days when it was $30 a barrel.
SusaN @ 92:
Brought to you by your friendly neighborhood conservative asshole! NO DRILLING IN ANWR!!!
It's called a REFUGE for a reason! humans aren't the only creatures trying to live on this planet ya know. Wildlife needs a damn chance at survival too.
Are you a lobbyist for the oil industry or something? Because this post is like a damn commerical or something.
How come Dubya can state these HUMONGOUS lies - "America is in the lead / oil independence (huh ?) / new technologies (after Europe I wouls say but okay) / global warming (yeah, right ... that's way the US would ratify the Kyoto treaty right ?) and remain unchallenged is totally beyond me ....
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