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Thread: Oil prices question

  1. #10

    Default Re: Oil prices question

    PLease read what I wrote, instead of giving a knee-jerk reaction. Also, you MUST understand that factors may differ and that situations may differ. Plus, the entire system works on perception, so the perception of conditions may differ as well.

    I know you are looking for somethign that proves that capitalism doesn't work or that some people aren't playing "fair," but you're not going to find it. Perhaps the worries about supply interruption drove prices up more lat year than they are driving them now. Perhaps refinery capacity is up and the costly maintenance of refineries has already occurred, which lessens expenses.

    Your premise that lower profits will come is not entirely correct. Let's suppose that some factor or condition has changed so that worries are less or that expenses are fewer. One producer may decide to charge less for his gasoline, assuming that more people will buy his gasoline because it costs less than the others. Any other producer may think that he should lower his prices, too, so he can still sell gasoline. The profit made on higher prices may not be enough to overcome the loss of selling fewer units of gas. In this pattern, companies are undercutting each other all the time, resulting in lower consumer prices.

    To think that only one thing influences gasoline prices is naive and absurd. I am telling you that I don't know why your observation exists, but I am giving some examples that could help, but don't even scratch the surface.

    Remember that the US gets a large amount of its oil from Canada and that Canadian oil is not the light sweet crude that you are seeing the high price for. That is also one of the many factors that help determine pricing.

  2. #11
    Olympic Champ
    Join Date
    Mar 2007
    On the forums

    Default Re: Oil prices question

    When the holidays are over, sometime in January, the prices at the pump will increase. In skipster's way of thiking, "other factors" will come into play.

  3. #12
    Round of 12
    Join Date
    Apr 2007
    Norwood, Pa.

    Default Re: Oil prices question

    Oil is traded in dollars, as the dollar weakens the cost of oil will increase (so the seller has the same adjusted income).

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