Is the price of gas in the US set on " Gut Feeling " at Exxon Corporation?

Question

I bet those oil CEOs need bigger Castles in Europe.

Answer 1

Re-Post:

It seems nobody in the U.S. wants to accurately answer this problem, but let me take an educated guess.

Currently there are only 2 crude oil commodity exchanges 'in the world'! A commodity exchange is where oil, or any commodity, is sold or bought in very large quantities.
One is in London the other is in New York.

Now, there are only about 12 to 14 large multi-national oil companies that can process oil into gas, but there are many investors with deep pockets that can and do bid on oil @ the exchanges.

The oil companies don't really care how high crude prices go as they simply add their costs into the finished products. {Gasoline, etc}

I personally think the investors are making a financial killing @ the expense of the public.
Can this be stopped?

Well, if they limit the commodity market participants to 'Only' producers of crude oil and 'Only' refiners/distributers of crude, prices may come down. But don't hold your breath, the top echelon of business people in the U.S. hold a financial stake in big oil.

By the way I read where the average 'Production' cost of oil is about $10 per barrel.
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[edit] P.S. there is one other equation I forgot to add in. The U.S. dollar is 'Losing' value in almost every country in the world, therefore it takes more dollars to buy oil from the sellers who might be from the mid-east, or anywhere else in the world.
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Answer 2

I bet you don't even realize that over half the gasoline stations in the US are independent, including most that sell Exxon-branded fuel. I bet you don't realize that the fuel distribution industry is one of the most fragmented industries there is - meaning the notion of price collusion at retail outlets is ridiculous, which is why the countless investigations seeking to find it have never turned up any.

Retailers make about 10 cents per gallon gross profit. It actually declines when prices rise and they make their margin back when prices decline.

Prices are a function of supply and demand and the US supply chain is very thin. We have not built a refinery since 1984. We have an outdated pipeline and terminal infrastructure. Whole regions of the country receive gasoline by TRUCK and/or barge.

On top of this, at the refining level, the EPA emissions standards vary by region and by season - the refiners, which are also very thin margin, have to shut down completely twice a year to change formulas.

If this was true of any other everyday product, prices would be high and volatile.

They're roughly the same at each streetcorner because the competition is so intense, people will cross the street to save 40 cents.

If anyone's screwing anyone it's the refiner/marketers undercutting the independent retailers when refining margins increase - they cut their retail prices to below the independent's cost. You save a dime going to Hess but in doing so you put the local retailer out of business.

But you see a big conspiracy where you want to see it, for political reasons - - you hate Bush, whom you don't even know, and you miss what's really going on, that actually affects you.

Answer 3

Did you know Exxon only gets 10% of all sales as profit? Do you know a lot of businesses that operate at such a small margin? To repeat it on a small scale, you would need to start up and operate a $1,000,000 annual business in order to earn $100,000 for yourself. But actually, the insider CEOs only own 5% of the shares - meaning they get a whopping 1/20th of 1/10th of the sales they make. The rest of the shares are sitting in portfolios like working class retirement accounts.

I don't think that's too excessive since the government takes 25% of those profits and adds a direct tax of about 20% to all the oil. In most years, the government makes more money off of oil than the companies do. Getting rid of taxes would reduce the price more than eliminating 100% of the profit.

Answer 4

It's traded on the international market. To purchase a bigger castle in Europe the CEO's would have to start a war and destabilize the largest oil producing region in the world and we all know that would never happen.

Answer 5

First off, you are ignorant. Oil prices are controlled primarily by the supply generated by OPEC - Exxon has not a thing to do with that, neither does the US government. Oil is traded freely on two major markets in the US, the largest of which is the NY Merc. Gas prices are affected largely by supply, demand,and refining capacity. Get a clue and do some homework.

Answer 6

No all of the top executives from all of the integrated oil companies meet every morning to discuss the price of gas. The only question proferred to the group is "how much do we want to rape consumers today?" They debate for an hour or so, they watch torture videos to get them in the mood, stuff like that. They laugh and poke fun at the tortured servants delivering caviar to them whenever they snap their fingers. They all have sex with each of their mistresses and continually try to take the debauchery to a new level every day. Then, and only then, do they decide that day's price of gas.

Answer 7

Gas prices are set by greedy CEO's of all of the Oil Corporations! They lie just as much as Congress does!

Answer 8

Why the hell do all you people blame American companies for oil prices? I miss the good old days when people unanimously hated OPEC, and the blame lay where it was most deserved. If the price of any commodity is uncommonly high, it is most likely the result of the PRODUCERS, not distributors or retailers.

Answer 9

YOU DON'T HAVE A CLUE TO THE REALITY OF A GLOBAL ECONOMY. THERE HASN'T BEEN A NEW REFINERY BUILT IN THIS COUNTRY IN OVER THIRTY YEARS. THE CHINESE ECONOMY IS BOOMING & THEY NEED MORE OIL. IN MANY STATES THEIR ARE HIGH TAXES AT THE PUMP WHICH ADDS TO THE PRICE OF GAS. A SLIGHT PROBLEM AT A REFINERY OR A MAJOR ONE IN AN OIL PRODUCING MARKET WILL LEAD SPECULATORS TO DRIVE UP THE COST OF A BARREL
OF OIL.

Answer 10

No, since over half of the worlds oil has been burned into our atmosphere, why not use the other half to get incredibly rich off of before it goes?