Down, Down, Down. Price of oil is dropping, but not at the pump. Why?

In answer to your opening question.

It costs you maybe $5 to produce the oil and charge $140+ for it ... thats quite a nice profit isnt it! so why bring down the price of oil if everyone seems happy paying the current price for it .... sure it may drop slowly but they will keep it as high as possible for as long as possible .....

This is all about greed. There are a few people/organisations in this world that like to make lots of money..... afterall how else are they going to aford that mansion and yaught .... and god forbid that you dont have the new bentley or fararri and the super models hanging off your arms.

I'm just waiting for the oil companies to post record profits this year ..... and OMG there will be an outcry when they do.

Sorry guys and gals not read this whole thread.... but

petrol and diesel are going down in price.

noticed a few stations here in Glasgow, Scotland had dropped a penny or two off their prices since last week.

hopefully the fall continues

Originally posted by scepticsRus
In answer to your opening question.

It costs you maybe $5 to produce the oil and charge $140+ for it ... thats quite a nice profit isnt it! so why bring down the price of oil if everyone seems happy paying the current price for it .... sure it may drop slowly but they will keep it as high as possible for as long as possible .....

This is all about greed. There are a few people/organisations in this world that like to make lots of money..... afterall how else are they going to aford that mansion and yaught .... and god forbid that you dont have the new bentley or fararri and the super models hanging off your arms.

I'm just waiting for the oil companies to post record profits this year ..... and OMG there will be an outcry when they do.

That is not true at all, you completely made up that number, the marginal production cost of oil is about $50-70 a barrel.

Im wondering if the temporary closing of 200 + factories in china in preperation for the olympics could cause the price of oil to drop like it has.

Also In china they have temporarily implemented driving restrictions. people with license plates that end in an even number can only drive on specific days and same for plates that end in odd numbers.

I admit I know almost nothing about the stock market and oil. So please excuse my ignorance if im way off here. Too those of you who actually know how the market works, is it possible that this is why the price of oil has dropped some?

Why or why not?


[edit on 21-7-2008 by gimme_some_truth]

reply to post by yellowcard


Big Deal .... a few $ difference ...... whats that when they are making 4 - 5 times that amount.

Maybe this will help some of you that are in desperate need of understanding the market.

This is 2006 but it should be give us a little knowledge as to what is going on in the market.

www.washingtonpost.com...


Roper

Originally posted by Roper
Maybe this will help some of you that are in desperate need of understanding the market.

This is 2006 but it should be give us a little knowledge as to what is going on in the market.

www.washingtonpost.com...


Roper

Thanks for that Roper! Very informative.

I found this illuminating also.

www.gravmag.com...

This is interesting from your link.

Q: Who sets oil prices? Can't we make the oil companies lower prices?
A: Oil companies today have virtually nothing to do with oil prices. In the 1950s and 1960s, they may have, when they had most of the control over both domestic and foreign production -- they owned the oil. With nationalization, oil-producing countries came to have more control, especially OPEC. In the 1970s and 1980s, OPEC (and mostly, Saudi Arabia) could control prices by controlling supply. Increase supply, price goes down. Decrease supply, price goes up. Today, to obtain the oil they need to refine, oil companies must purchase the majority of what they use -- at market prices.

From the 1990s to the present, even OPEC has very little control over prices because there is very little (some say none) excess production capacity anywhere in the world, including Saudi Arabia. Supply cannot be affected, so the price depends on demand. In the long run (months), the price is entirely controlled by the people who consume oil - for the most part that means American drivers.

In the short run, on a daily basis, the price is set by buyers, including market speculators, whose gut reaction to geopolitical, weather, and other impacts on the global market result in their "bets" that supply and demand a month or so out will be such-and-such, and that therefore the price they are willing to pay is this-and-that. There are only three significant oil-trading exchanges in the world: the New York Mercantile Exchange, a similar one in London, and a new smaller one in Dubai.

Oil traders are human, and their reasons for being willing to buy oil contracts at any particular price range from scientific to emotional to downright illogical. For example, as the price neared $100 but fluctuated, when prices were as low as $94 or $95, many traders bought at those prices, seeing them as bargains in the face of (likely) impending prices at or over $100. Such buying then drives the price up, almost like a self-fulfilling prophecy.

Roper

Gas down about 20 cents a gallon over the last week or so where i live.

Looks like this thing with elections coming is taking its toll on gas prices like it did back with the 06 congress elections. Gas 10 days ago was $4.04.9 and today its $3.83.9.

Hmmm. Filled up yesterday for 12 cents a gallon less than same time last week. Guess this hype is in the same vein as the Dems statement it'll take 10 years to get any more oil out of Alaska if they open up drilling in ANWR now. Just pathetic liers and surrenderers.

same as many people said, the high price is baked in for awhile, because there is a lag effect, between prices at the pump, and the price per barrell, so these high prices were probably only caught up to 125-30$ dollar/ barrell prices in the first place (since the 140's were only around for a week or so, they were never priced in)