Bush Urges Congress to Lift Offshore Drilling Ban

reply to post by mythatsabigprobe


Take a look around you if you don't think OPEC has any effect on OIL (not "gas") companies.

Media ignores OPEC's control

OPEC sends big oil "back to the field"

Speculators proving the banks are involved


Of the 20 million barrels used a day, of this just over 5 Million comes from oil wells within the US. The rest is imported. The oil companies must sell the oil at world prices because about 70% of the oil they sell is bought at world prices. World oil prices have been skyrocketing (due to OPEC). The US gets its oil from Canada, Mexico, and Venisuala and the rest from the middle east.

My point is that just because Canada and Mexico aren't OPEC, doesn't mean they aren't effected by OPECs inflationary effect.

U.S. Crude imports based on country





[edit on 19-6-2008 by Azurus]

reply to post by Azurus


What, documentation on where we get our oil from or on oil companies having their own wells?

I'm not disputing that OPEC influences oil prices, I'm disputing that oil companies are only making 'pennies on the dollar' selling their oil at $134 a barrel.

Originally posted by mythatsabigprobe
reply to post by Azurus

 

What, documentation on where we get our oil from or on oil companies having their own wells?

And the oil companies don't 'buy' their oil from OPEC, they drill it themselves and get that $134 in their hot little hands for every barrel

I don't know where you get this from...the world market works both ways. They pay more for it, they also sell it for more. It's about inflation. The cost of crude in the world is rising faster than the economy in America. This doesn't mean the oil companies are making any more due to this reason. It just means demand is probably higher and they are moving more gross income.

Do you really believe that Exxon and Chevron, etc. are buying oil?

Look, I agree with a lot of what you're saying and I've posted here plenty on how the dollar's value is affecting oil prices, but you've got this part wrong.

reply to post by mythatsabigprobe


I still don't really understand the point you are trying to make. I'm trying though. How do you know this about Exxon and Chevron?

Oil companies sell oil to other countries and other oil companies. What difference does it make if they use the OPEC price or not? It's the same profit margin regardless of inflation.

My main concern is our independence as a country and the strength of the economy, which is highly effected by the oil industry.

While I agree that the oil companies don't have our best interests in mind, I still don't see what they can do to make things better for us at the pump.

If you have a good solution, please let us all know. I'm interested in the debate.

[edit on 19-6-2008 by Azurus]

[edit on 19-6-2008 by Azurus]

reply to post by Azurus


Our biggest seller is Canada with Mexico second, third is Saudi Arabia and fourth is Venezuela.

Also,

Who set the oil prices? check my post will links in the third page. Yes is no OPEC, our own government is the one gouging the consumer.

Hard to believe.

In today's complex global markets, the price of crude oil is set by movements on the three major international petroleum exchanges, all of which have their own Web sites featuring information about oil prices. They are the New York Mercantile Exchange (NYMEX,
www.nymex.com...), the International Petroleum Exchange in London (IPE, www.ipe.uk.com...) and the Singapore International Monetary Exchange (SIMEX, www.simex.com.sg...).


The Web sites of the Paris-based International Energy Agency (IEA, www.iea.org...) and the US Energy Information Administration (EIA, www.eia.doe.gov...), also have extensive historical information on oil prices.

[edit on 19-6-2008 by marg6043]

[edit on 19-6-2008 by marg6043]

reply to post by Azurus


Well my solution would be to outlaw speculation on oil futures and get the economy back on track to strengthen the dollar. Not spending more money than we have would be a good starting point.

reply to post by marg6043



So you are saying that 3 independently operated trading markets located in New York, Singapore, and London are the reason prices are so high? Are you referring to crude barrels? or something after that purchase?

How is this tied into our government. I would think it would be caused by investors and inflation like I was originally saying...

reply to post by Azurus


They are the major players on the oil prices, our government disregard for regulations within our own nation and our own prices are the ones gouging the consumer.

Why, because they all cashing out on the profits, we have a government that is all about oil as they are oil men and woman, lets not forget that Condi was an oil woman before joining the Bush team she even have a tanker with her name.

Is plenty of links that you have not read or ignore posted by various members in this thread.

Originally posted by mythatsabigprobe
reply to post by Azurus

 

Well my solution would be to outlaw speculation on oil futures and get the economy back on track to strengthen the dollar. Not spending more money than we have would be a good starting point.

I think you are right in wanting to outlaw speculation, but I'm not sure how we could go about doing that. Speculation is basically the buying of oil futures contracts by people who don't really need the oil, with the hope to sell it and make a profit down the road. It definitely causes spikes, but when price exceeds the equilibrium, there becomes an excess, but it's a very slow process for that "equilibrium" to fall back down into normal price range.

But we can't control public companies...

Here is a good sense on what I think is happening.

The commodities market total notional value does not come anywhere near the actual amount traded OTC and through third party transactions, but the wholesale fuel prices at many gas stations are set directly off of the market exchanges that are subject to massive manipulation. If one wished and decided to collude with other holders of large amounts of refined product you could drive up the price on the NYMEX, etc. through speculative hedge fund accounts and then you have an excellent reason to raise the wholesale price of your product, which the cost to you has not changed on. You simply expanded your margins. What do you think the dollar value of contracts for settlement is for gasoline vs. the total amount sold during that same contract period? They are setting the price off of markets that are inefficient and easily manipulated.

As far as you saying you think we should get the economy back on track, do you not think lifting the ban on offshore drilling would help the economy in any way? (excluding whether oil companies would reap the profits)

Originally posted by Azurus
reply to post by mythatsabigprobe

 

I still don't really understand the point you are trying to make. I'm trying though. How do you know this about Exxon and Chevron?

Because oil companies are in business to drill holes in the ground and pump oil out. They have rigs all over the world and all over the oceans, and even in countries where the oil resources are nationalized they're still being drilled by US oil companies on royalty contracts. They don't buy oil, they're the ones that produce it.

reply to post by marg6043


I tried to read many of the links I saw and I have read all the posts on the thread, but what I am gathering from you is mainly a deep sense of vindictiveness without much proof.

Trust me, I fully agree that things aren't right with our oil situation.

I can't stand the Bush administration, but that doesn't mean I automatically think he has some sinister plan to take over the world with oil for him and his "cronies". It's too unreasonable to me, and plainly I don't think he's smart enough for that. If anything the private sector speculation combined with easy reasoning in the public eye, and OPEC are the problems, not Condi Rice.

I think I would be more perceptive to your view if you pointed fingers at certain people less, while showing more reasoning behind your accusations. Telling me that Condi or Cheney worked for an oil company means nothing to me other than we have some very rich people in our administration.

What we should worry about right now is China's demand for oil, because it's changing out OPEC treats America.

[edit on 19-6-2008 by Azurus]

reply to post by mythatsabigprobe


And I still dont' see your point. They drill oil from overseas under contract (while paying "royalties"), then sell it at market price. And we also buy oil at market price.

So are you referring that we drill more than we buy? I'd like to take a look at how those "contracts" and "royalties" work. I'm sure there is more than meets the eye.

Here's some background on what I believe is the current problem in regard to oil speculation. It's quoted from a BTS thread here

in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures.”

Previously, the ICE Futures exchange in London had traded only in European energy commodities – Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC’s permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.

*****SKIP*****

A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.

In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.

By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation.

Originally posted by Azurus
reply to post by mythatsabigprobe

 

And I still dont' see your point. They drill oil from overseas under contract (while paying "royalties"), then sell it at market price. And we also buy oil at market price.

So are you referring that we drill more than we buy? I'd like to take a look at how those "contracts" and "royalties" work. I'm sure there is more than meets the eye.

My point is that oil companies don't buy oil and then resell it for pennies on the dollar, which was your point. They have the same costs to produce a barrel of oil today as last year, but the price (in $US at least) has almost tripled.

reply to post by mythatsabigprobe


Ok, that does make a lot of sense. Now I understand what you are saying.

The lack of regulations on these markets creates a huge potential for exploitation. Why in the heck did we allow that the ICE London to have that type of control here?

reply to post by mythatsabigprobe



I wasn't claiming they sold each barrel and made "pennies on the dollar", I just meant that their profit margins are within normal range considering how much they gross. I could care less how much they make off a barrel of crude, but if the company nets within the normal range, then, hey that's capitolism...

Here's an article I found in a major news media article referring to the unregulated energy markets as well. Apparently they have been aware of this for some time now. (article from Feb. 01)

Sen. Charles Schumer, D-N.Y. took a swipe at the two firms, calling on fellow lawmakers to break the country's dependence on foreign oil and rollback unnecessary tax incentives for oil companies.

Judy Dugan, research director of The Foundation for Taxpayer and Consumer Rights, urged Congress to initiate some oversight into unregulated energy trading markets, which have been accused of helping to drive up the price of oil.

"Exxon is happy to take advantage of these prices," said Dugan.

But finding oil has also become more costly. The oil boom has led to a surge in exploration and drilling activity, which has pushed up the price for skilled workers and equipment.

Furthermore, new supplies of oil are increasingly difficult to find and generally tend to be located in harder to reach - and hence more expensive - places. The new natural gas field discovered this week by Brazil's Petrobras lies three miles under the ocean.

ExxonMobil representatives also stressed the cyclical nature of the business and noted that growing global demand for energy will require companies to heavily invest in future growth. The company said it estimates that global demand will grow by 30 percent by 2030.

"The challenge for all of us in the industry is how to we meet that increased demand," said Henry Hubble, vice president of investor relations.

Exxon and Chevron aren't the only two oil giants to report impressive earnings recently. Conoco (COP, Fortune 500), the nation's third-largest oil company, trounced profit estimates by nearly 25% when it reported last week. And Royal Dutch Shell PLC, Europe's largest oil company, reported a 60% increase in profits Thursday.

How can we control what hedge funds and stockholders do though?

[edit on 19-6-2008 by Azurus]

[edit on 19-6-2008 by Azurus]

[edit on 19-6-2008 by Azurus]

I don't know, maybe its jus tme, but if I was an oil company, I'd be afraid to sink and new drill sites or refineries. they take a long time to build, and the epa/environmentalists keep changing the laws constantly so in reality, I have to build the same site 3 times over usually, and can never really make my money back.

or.. I could just sit on my hands and collect a ton of money from investments I already have.

what makes more sense?

Originally posted by mythatsabigprobe
I'm not disputing that OPEC influences oil prices, I'm disputing that oil companies are only making 'pennies on the dollar' selling their oil at $134 a barrel.

the oil companies make about 8% profit. Which is probably the lowest profit margin out of any business sectors in the USA.
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