The last time oil was at $80, gas was $3,69. Is the profit margin so immense for big oil, that they can do that, just to support Bush for a while.
2007-09-21 03:19:42 · 10 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
You are paying for what the oil was 3 months ago.
Dont worry - it will catch up
2007-09-21 03:23:34 · answer #1 · answered by Fuzzybutt 7 · 0⤊ 0⤋
The $80 per barrel is the price for oil futures, which is based on what investors are expecting the market inventories to be in the future. The price has risen as demand is expected to increase in the coming months with little or no change in supply.
Gas prices are based on current supply and demand and, as explained above, several refineries have come back online so the supply of gasoline is higher. If demand for gasoline rises as predicited by the increase in oil futures (the $80 price) then the price per gallon of gas will jump up.
2007-09-21 17:02:15 · answer #2 · answered by mindcrime828 7 · 1⤊ 0⤋
The profit margin is immense. They are going for profits because they can get them. As far as your comment about Bush, don't expect cheaper gas with a new president. Why surrender profits if you don't have to. Maybe the new president will put a cap on prices but don't count on it.
When oil companies are showing record profits, yes I think profits are immense.
2007-09-21 10:29:02 · answer #3 · answered by Anonymous · 0⤊ 0⤋
"Burning crude oil itself is of limited use. To extract the maximum value from crude, it first needs to be refined into petroleum products. The best-known of these is gasoline, or petrol. However, there are many other products that can be obtained when a barrel of crude oil is refined. These include liquefied petroleum gas (LPG), naphtha, kerosene, gasoil and fuel oil. Other useful products which are not fuels can also be manufactured by refining crude oil, such as lubricants and asphalt (used in paving roads). A range of sub-items like perfumes and insecticides are also ultimately derived from crude oil.
Furthermore, several of the products listed above which are derived from crude oil, such as naphtha, gasoil, LPG and ethane, can themselves be used as inputs or feedstocks in the production of petrochemicals. There are more than 4,000 different petrochemical products, but those which are considered as basic products include ethylene, propylene, butadiene, benzene, ammonia and methanol. The main groups of petrochemical end-products are plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilisers."
Plus the refineries are not anywhere near capacity like they were this summer.
For anyone that does not understand supply and demand this would make sense.
If the oil companies could sell gasoline at 20 cents a gallon and make a penny per gallon, do you have any idea what that would mean profit wise for them? about 10 times what they make now because we all would use alot more gasoline than we do now.
On average, the oil companies make about 5-8 cents per gallon of gasoline after expenses, Do you know what the taxation on gasoline is? about 40-50 cents and in most cases a lot more than that.
The government gets like 7 times the amount of "profit" as the oil companies do, yet have no invested capital or risk in the production of gasoline. Isn't that a bit apauling?
Want a break on gasoline? Tell your gvernment to cut taxes on it.
2007-09-21 10:34:27 · answer #4 · answered by Jason W 3 · 0⤊ 0⤋
The big oil companies are purchasing oil at that price in the middle east, but the time for that product to reach us here in the US takes about a month or so to transport via VLCC. There is a delay in pricing because of this. A lot of the gasoline prices at the pump are because of speculation in the market, though, so expect another jump in prices.
2007-09-21 10:35:54 · answer #5 · answered by 3ntropy 3 · 0⤊ 0⤋
Wasn't the CEO of Mobil given some 14 million dollars when he retired as a bonus for managing gas prices well? Where'd all that money come from if the prices are being well managed?
2007-09-21 10:29:58 · answer #6 · answered by blackcobra487 5 · 0⤊ 0⤋
Yes, profit margin is huge. I don't know where you live, but here in Connecticut, gas is way over $3.
2007-09-21 10:37:27 · answer #7 · answered by life is good 6 · 0⤊ 0⤋
the price of a barrel of oil has nothing to do with its actual worth. when the bush regime is over the price will deflate. the market is artificially inflated. chavez would love to sell us lots of cheap oil but he can't with current restricitons created by bush and his saudi friends. the more citgo you buy the worse it is for them though. its a fun game.
2007-09-21 10:33:59 · answer #8 · answered by Anonymous · 0⤊ 0⤋
OIL PRODUCT MARGINS ARE IN SINGLE DIGITS....DO YOU CONSIDER AN 8 TO 9 % MARGIN IMMENSE?
2007-09-21 10:34:07 · answer #9 · answered by Anonymous · 0⤊ 1⤋
the refineries got back to production after being shut down for awhile,so they are making more gasoline than they were before
2007-09-21 10:32:22 · answer #10 · answered by Anonymous · 1⤊ 0⤋