Making Gasoline/Diesel More Afforedable

[itfitzme]

Uhmm... hello McFly ... hello anyone in there? *What happens to the price of a commodity in which supply and demand are controlled by storage facilities storing the product when demand is low and selling the stored product when demand is high?

What happens to the price of a commodity when the value of the dollar falls due to unequal quantitative easing of the dollar as compared to the monetary system of the primary producers of said commodity? *

Are you trying to say the people selling the commodity can't up their price based on devaluation of the dollar? *Are you saying oil should be less valuable than the dollars generated by quantitative easing? *Yeah all they do is say here you go more money no drilling required, just add zeroes to the balance sheet. *Here's our dollars give me more oil?

Further the law of supply and demand goes out the door when the seller is an oligarchy that is allowed to set price.

That sets the market price above the free market equilibrium. *The standard models are the Carnout and Nash models. *The market price then fluctuates on demand. *The major driver is demand, with China increasing that demand. * They aren't mutually exclusive. *Which is why I find amusing to see the oiln execs before Congress saying then price is set by supply and demand. *They are the supply.

You do get the concept of "and"? Supply "and" demand? *Or in this convo, demand and supply. *I said demand, you said supply.

You should see my other post where I detailed the ologopoly and talked about market power. Got called a liberal for that.

Yep, I think we nailed it. *Good work. *I think we nailed it. *It's about F'in time two people nailed the fact that its SUPPLY AND DEMAND.

No, really, you should see my other posts. Though it's been a while since I've mentioned speculation, the commodity market.

Still, I can't find data on the tankers, just some comment that some one once made about actually seeing them off the coast.

I'll see if I can find my post on the major suppliers. *It leaves an open question about how much they can raise market price above then ideal market equulibrium. *The clue is profit per gallon. *In a perfect market with perfect competition tbere is no profit. *

Oil refineries have economies of scale and barriers to market entry, ergo not an ideal free market. *The major companies number less than ten. *

Thanks, I've had the demand side one day, the supply side the next. *Just could't get them together.

Ah... now I get your point. *FYI... when I said "demand is flat with production" I meant I was agreeing with your point to equilibrium cost being a matter of supply and demand, production being the supply side in my phrasing.

If there is no profit there is no reason for investment... if there's too much competition the narrow profit margin will chase the investment money to better returns. * Supply and demand also applies to investments, and monetary valuation.

Yeah, good. *There are too many personalities in this place.

Here is a good post,*#8 You can find it on page

Here -> http://www.usmessageboard.com/clean...line-diesel-more-afforedable.html#post7292888

If that includes a list of major oil companies, it's the one I'm thinking of. If not, i'll see if I can find it.

I think we were getting somewhere, in #8,*but stopped. *I think it's relevant and worth review. *Theory only gets so far before it degrades to speculation and can't move forward without some data. *

I literally just got my own "and" point.*I want to let this "AND" thing digest. **

I have to reread it and work on better understanding your responses. *

I think it's time to just list the concepts. *See if they will congeal.

There is simply the ideal market equilibrium point that moves on shifts in supply and demand.

There is the Nash and Carnout models that have the equilibrium point above the ideal, the supply curve shifted upward. *That upward shift is a different model that I had just as profit. *Now I know what the profit model is.

I've got the equilibrium point, the real dollar price, tracked by EIA or some websites data. *It was flat through 1998 then began rising to the recession. *It crashed. *Then it returned to pre-recesion levels.

We have oil tankers off shore. *How speculators got into that market, I can't figure. *You'de think that refineries could lock in long term contracts.

I was suprised that the price of crude is such a large percentage of the total pump price.

Taxes are not as significant as some may believe. *If they went away, prices wouldn't drop by the full amount. *Profits would go up to take up alot of that slack.

There is some other convo, up the thread, about the fact that it takes at least 8-10 years from the seismic crew beginning to survey leased land to the first barrel. You commented on investment. *It's a huge investment.

If Mexico, Canada, etc. have easier to get to supply, they can provide raw crude more cheaply than new reserves can be opened up. <-- hypothesis

 

[itfitzme]

The following are the gas prices.

Gasoline price, real dollars, midgrade

Gasoline Price, Nominal

The recession drove prices down. *Someone askednthe question how the price could be so low at *that recession deflationary bottom.

The following is 100/CPI over same time frame.

The value of the dollar spiked, but it didn't spike to 1998 levels. *

The obvious answer is demand fellnso far that prices had to fall to maintain volume and return maximu
P*Q.

I've been saying all along that

Profit = (Price - Cost ) * Quantity.

The shere volume of sales is enormous. Still, that's not enough to explain profit for prices falling from*
$4.15 to $1.90. *

Even for a short time, why not just stop sales? *

I want to see sales volume and reported profit to see how that could possibly make sense.

 

[itfitzme]

Cap regular unleaded and diesel prices to 40 cents above taxes at the pump nationwide.

Where you get 40 cents from?

*Here is an interesting table of margins for gasoline production all the way up the supply chain. *Unfortunately, data on production cost alone is not available.*

Estimated 2013 Gasoline Price Breakdown & Margins Details

Crude Oil ..... *$2.55
Refinery ...... *$0.60
Distrinution . *$0.24
Taxes *......... *$0.65
-------------------
Total pump . *$4.05

$0.40 above taxes seems a bit low. *

Prices also have to be able to fluctuate with ecoonomic conditions. *An absolute peg would be a bad idea.

In 2008, Exxon/Mobil profits were record numbers even though gasoline prices dropped from $4.12 in June to $1.59 in November. How is that possible?

Yeah, this is just going to bug the shit out of me now.

If you haven't seen it, here is the real dollar price for an arbitrary grade in an arbitrary region.

Gasoline price, real dollars, midgrade

So how can they sell it at 40%? And make a
profit? *Did they get all fuzzy about America and decide to take a loss for a while? *Is the timing of raw crude to the pump so fast that the price per barrel fell?

I don't know. Bring up alot of questions..

 

[CrusaderFrank]

Cap regular unleaded and diesel prices to 40 cents above taxes at the pump nationwide.

So exploration, refining and distribution and R&D costs LESS than 40 cents a gallon?

Seriously?

 

[itfitzme]

Cap regular unleaded and diesel prices to 40 cents above taxes at the pump nationwide.

So exploration, refining and distribution and R&D costs LESS than 40 cents a gallon?

Seriously?

No way, it's more like $1.59

 

[OnePercenter]

Cap regular unleaded and diesel prices to 40 cents above taxes at the pump nationwide.

So exploration, refining and distribution and R&D costs LESS than 40 cents a gallon?

Seriously?

Yes. The crude oil prices are the culprit.

March 1999, regular gasoline cost $1.00/gal. Do you really think exploration, refining and distribution and R&D costs are that much higher today?

 

[OnePercenter]

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

When your refinery blows up because you failed to follow your own maintenance schedule, you get to raise prices for gasoline to make up for losses even though your insurance company paid off on the claim. Pretty fucking sweet!

Bottom Line: Gasoline price are fixed.

 

[Toddsterpatriot]

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

When your refinery blows up because you failed to follow your own maintenance schedule, you get to raise prices for gasoline to make up for losses even though your insurance company paid off on the claim. Pretty fucking sweet!

Bottom Line: Gasoline price are fixed.

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

Because they sell oil. They sold oil in 2008 at $140/bbl.

Why are you so ignorant?

When your refinery blows up because you failed to follow your own maintenance schedule, you get to raise prices for gasoline

When your refinery "blows", you can't make any gasoline there, you moron.

Bottom Line: Gasoline price are fixed.

Bottom Line: Stay away from sharp objects, idiot.

 

[Toddsterpatriot]

Exxon 2008 profit: A record $45 billion
The oil company rides $147 crude to set an all-time high despite oil price collapse in back half of the year.


NEW YORK (CNNMoney.com) -- Exxon Mobil reported the largest annual profit in U.S. history Friday, making $45.22 billion on the back of record oil prices.

But Exxon's quarterly profit fell over 33%, as crude prices dropped precipitously in the last quarter as recession spread through the globe.

Exxon (XOM, Fortune 500), the world's largest publicly traded oil company, made $7.82 billion in the fourth quarter on revenue of $84.7 billion. On a per share basis, the company made $1.55, beating analysts' estimates of $1.45 a share.

Exxon Mobil year net sets mark, but profit down for quarter - Jan. 30, 2009

 

[PaulS1950]

So, are you suggesting that we invest?

 

[Toddsterpatriot]

So, are you suggesting that we invest?

No, I'm suggesting the original poster is an idiot.

 

[Mr. H.]

Cap regular unleaded and diesel prices to 40 cents above taxes at the pump nationwide.

So exploration, refining and distribution and R&D costs LESS than 40 cents a gallon?

Seriously?

Yes. The crude oil prices are the culprit.

March 1999, regular gasoline cost $1.00/gal. Do you really think exploration, refining and distribution and R&D costs are that much higher today?

You're a moron to believe otherwise.

 

[OnePercenter]

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

When your refinery blows up because you failed to follow your own maintenance schedule, you get to raise prices for gasoline to make up for losses even though your insurance company paid off on the claim. Pretty fucking sweet!

Bottom Line: Gasoline price are fixed.

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

Because they sell oil. They sold oil in 2008 at $140/bbl.

Why are you so ignorant?



Bottom Line: Gasoline price are fixed.

Bottom Line: Stay away from sharp objects, idiot.

Exxon 2008 profit: A record $45 billion
The oil company rides $147 crude to set an all-time high despite oil price collapse in back half of the year.


NEW YORK (CNNMoney.com) -- Exxon Mobil reported the largest annual profit in U.S. history Friday, making $45.22 billion on the back of record oil prices.

But Exxon's quarterly profit fell over 33%, as crude prices dropped precipitously in the last quarter as recession spread through the globe.

Exxon (XOM, Fortune 500), the world's largest publicly traded oil company, made $7.82 billion in the fourth quarter on revenue of $84.7 billion. On a per share basis, the company made $1.55, beating analysts' estimates of $1.45 a share.

Thank you for making my point.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

When your refinery blows up, because you failed to follow your own maintenance schedule, you get to raise prices for gasoline

When your refinery "blows", you can't make any gasoline there, you moron.

Didn't Chevron in the bay area of California have insurance that paid them for any losses?

 

[OnePercenter]

So, are you suggesting that we invest?

No, I'm suggesting the original poster is an idiot.

An 'idiot' all the way to the bank.

 

[OnePercenter]

So, are you suggesting that we invest?

Only if you need a loss.

 

[Toddsterpatriot]

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

When your refinery blows up because you failed to follow your own maintenance schedule, you get to raise prices for gasoline to make up for losses even though your insurance company paid off on the claim. Pretty fucking sweet!

Bottom Line: Gasoline price are fixed.

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

Because they sell oil. They sold oil in 2008 at $140/bbl.

Why are you so ignorant?



Bottom Line: Gasoline price are fixed.

Bottom Line: Stay away from sharp objects, idiot.

Exxon 2008 profit: A record $45 billion
The oil company rides $147 crude to set an all-time high despite oil price collapse in back half of the year.


NEW YORK (CNNMoney.com) -- Exxon Mobil reported the largest annual profit in U.S. history Friday, making $45.22 billion on the back of record oil prices.

But Exxon's quarterly profit fell over 33%, as crude prices dropped precipitously in the last quarter as recession spread through the globe.

Exxon (XOM, Fortune 500), the world's largest publicly traded oil company, made $7.82 billion in the fourth quarter on revenue of $84.7 billion. On a per share basis, the company made $1.55, beating analysts' estimates of $1.45 a share.

Thank you for making my point.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

When your refinery blows up, because you failed to follow your own maintenance schedule, you get to raise prices for gasoline

When your refinery "blows", you can't make any gasoline there, you moron.

Didn't Chevron in the bay area of California have insurance that paid them for any losses?

Thank you for making my point.

Your point was you have no understanding of markets. I'm happy to point that out.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

Yeah, cap it at below the cost of production and you'd crush supply.

That would be stupid.

 

[Toddsterpatriot]

So, are you suggesting that we invest?

No, I'm suggesting the original poster is an idiot.

An 'idiot' all the way to the bank.

America is a great country, even an idiot can do well.

 

[OnePercenter]

When gasoline prices dropped in the end of the Bush caused catastrophe, Exxon/Mobil made record profits. How is that possible?

Because they sell oil. They sold oil in 2008 at $140/bbl.

Why are you so ignorant?



Bottom Line: Gasoline price are fixed.

Bottom Line: Stay away from sharp objects, idiot.

Thank you for making my point.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

When your refinery blows up, because you failed to follow your own maintenance schedule, you get to raise prices for gasoline

When your refinery "blows", you can't make any gasoline there, you moron.

Didn't Chevron in the bay area of California have insurance that paid them for any losses?

Thank you for making my point.

Your point was you have no understanding of markets. I'm happy to point that out.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

Yeah, cap it at below the cost of production and you'd crush supply.

That would be stupid.

So the only variable is the cost of crude and gasoline which is fixed by the market. Capping would fix the price in the favor of the middle class and poor as the market price of crude and gasoline would fall to match the pump price.

 

[OnePercenter]

No, I'm suggesting the original poster is an idiot.

An 'idiot' all the way to the bank.

America is a great country, even an idiot can do well.

As of today, my portfolio is $165M strong, hows yours?

Who's the idiot now?

 

[Toddsterpatriot]

Thank you for making my point.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.



Didn't Chevron in the bay area of California have insurance that paid them for any losses?

Thank you for making my point.

Your point was you have no understanding of markets. I'm happy to point that out.

It's the price of crude that is the culprit for high gasoline prices, so if you cap at forty cents above taxes we'd bring the cost of crude and gasoline down from the stupid levels we are currently seeing.

Yeah, cap it at below the cost of production and you'd crush supply.

That would be stupid.

So the only variable is the cost of crude and gasoline which is fixed by the market. Capping would fix the price in the favor of the middle class and poor as the market price of crude and gasoline would fall to match the pump price.

Capping would fix the price in the favor of the middle class

You want to cap the price of gasoline at taxes plus 40 cents, even if the cost of the oil, refining etc is $3.50?