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Oil price question.... WTF!!

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Bigmack Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-04-08 01:15 AM
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Oil price question.... WTF!!
Oil was around 25 bucks a barrel when Dumbya took over, and gas sold for about $1.70 a gallon.

If oil is now 100 bucks a barrel - 4 times what it was in 2001 - how come gas is not 4 times the 2000 price, or $6.80 a gallon?

And.... while I'm asking dumb questions... how can this happen while the oil companies are showing record profits?
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CK_John Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-04-08 01:20 AM
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1. They are waiting until after the 2/5 primaries. n/t
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AdHocSolver Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-04-08 01:55 AM
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2. There are several ways to look at this phenomenon.
However, I will just point out that the oil companies can maintain profit margins, even when price rises for gasoline are not proportional to the cost increases of crude oil, merely by cutting costs. The usual way corporations do that is by downsizing the work force and off-shoring jobs to countries with lower wage rates. I think that the oil companies have been doing just that.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-04-08 01:57 AM
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3. Those high barrel prices are spot prices.
In fact a lot of oil is sold at contract prices I believe. At least that is how it used to be back in the early '70s when I worked in oil.
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