Help ATS with a contribution via PayPal:
learn more

Myths about oil prices.

page: 1
5

log in

join

posted on Mar, 4 2012 @ 09:08 PM
link   
Everybody wants to blame the politicians or the current occupant of the White House for skyrocketing oil prices but, how much control do our "leaders" really have over the prices at the pump?


5 myths about gas prices, Big Oil, and the presidency

1. Gas prices rise every summer because oil companies gouge us
Most Americans don't know that gas is made of different ingredients in winter than in summer. In winter, a cheap additive, butane, makes it less expensive to fill 'er up. But in hot weather, butane evaporates. Refineries must replace it with other, more expensive ingredients. So blame chemistry, not conspiracy, for higher summer prices.

2. We get most of our oil from the Saudis
our top suppliers are Canada and Mexico. For national security and economic reasons, U.S. oil supplies are well diversified.

3. Oil companies rake in obscene profits
A cross-section of well-known American companies showed profit margins higher, in some cases much higher, than Big Oil: Boeing, McDonald's, Disney, Apple, and many others, for example. Few Americans complain about the success of these companies. But look at the numbers. Using S&P data, Boeing's average net margin was 19.0 percent, McDonald's 18.8 percent, Disney's 15.9 percent, Apple's 13.5 percent — and Exxon-Mobil's 8.9 percent.

4. Drilling for oil would solve all of our problems
Oil tankers are actually being rented to store oil offshore because we have nowhere else to keep it. And if we did drill, baby, drill, we couldn't even process the excess oil. Refining capacity has shrunk in recent years. Existing refineries are running near capacity, and the U.S. hasn't built a new refinery in decades.

5. We must tap into our emergency oil reserves
The Strategic Petroleum Reserve — which only holds about a five-week supply of oil (727 million barrels, and the U.S. guzzles 21 million a day) — is meant to be used only in a national emergency like a war. And even if Obama did tap the SPR again, we can only process about 4 million barrels a day. And even then it takes several weeks for the gas to make it to market.

The Week


The article seems to indicate that oil prices are what they are and there's nothing we, or politicians in Washington can do about it. The fact that most of our oil comes from Mexico and Canada should dispel the myth that Middle-East instability drives up prices. They also dismiss the idea of increasing our refining capacity using the NIMBY argument; nobody wants that stuff in their back yard. They don't take the current economic picture into consideration; how many places really would turn down good paying jobs for their region in this economy?

The most glaring omission in the article is the way they ignore market manipulation of the price of oil. Supply and demand isn't driving the price of oil; market speculation is. Investors buy up large quantities of oil futures and sit on them, driving up prices and creating the impression there is a shortage in the oil supply. Surprisingly, it doesn't take that much money to drive up the price of a barrel.


How to Manipulate the Oil Market for Just $1 Billion

According to the complaint, the defendants in early January 2008 bought up 4.6 million barrels of crude oil, representing the vast majority of physical barrels available at Cushing, Oklahoma, for February delivery. That was enough, according to the complaint, to create the impression of tight supplies, driving market prices higher.

At the time Arcadia et al were allegedly building this position, Cushing crude oil cost about $93 a barrel. So ostensibly it cost about $428 million to buy up enough physical crude to manipulate the market.

When the defendants allegedly took their second bite of the apple, in early March, according to the complaint, they amassed 6.3 million barrels of crude. At the time, Cushing crude cost an average of about $107 a barrel, so 6.3 million barrels would have cost about $674 million.

My second thought is that, if we assume for the sake of argument that even the concept alleged here is realistic, that relatively small operators could accomplish corner the WTI crude-oil market with just $1 billion, then how easy must it be for far larger players to manipulate the market for even greater gains?

WSJ

From the article, you can see that companies ARE prosecuted for manipulating prices when they get caught. You would think that our "leaders" in Washington would be protecting their constituents from this type of stuff but, what do they do instead?


Republicans' reckless spending bill, H.R. 1, would reduce funding for the Commodity Futures Trading Commission (CFTC) by a third, forcing layoffs to the watchdog that polices market manipulation by oil speculators and other abuses that drive up oil prices.



That's right; they cut back on the regulators so their Wall Street buddies can continue to rape us at the pump.

Don't believe the myth that there is nothing we can do about raising gas prices. That is the biggest myth out there and one you won't hear about very often from the MSM.




posted on Mar, 4 2012 @ 09:12 PM
link   
Number 4 is definitely a fabrication. Why else would oil companies in Canada want to build the Keystone Pipeline to refineries in the US if there wasn't spare capacity?



posted on Mar, 4 2012 @ 09:30 PM
link   
reply to post by FortAnthem
 


Thanks for putting the work in on your thread. I was misled at first thinking that you were dispelling the "myths of Big Oil". They do enough of that themselves though. Number three was obscene about insane profits... which they do make a boat load of.

CNN Money

Exxon reported net income of $9.4 billion, or $1.97 a share, in the fourth quarter. That's up from $9.25 billion, or $1.86 a share, in the same period in 2010.
Analysts were expecting earnings of $1.96 a share, according to a survey by Thomson Reuters.
Revenue rose 15% to $121.6 billion, the company said.

121.6 billion for 2011 in these foreclosed, jobless, pricey times. I think they should take a cut in pay too. Maybe drop the price of gas instead of raising it... again.



posted on Mar, 5 2012 @ 01:15 PM
link   

Originally posted by ThisIsMyName
Number 4 is definitely a fabrication. Why else would oil companies in Canada want to build the Keystone Pipeline to refineries in the US if there wasn't spare capacity?



I think the whole article is a whitewash for the oil companies and the market speculators to make the public think they just have to suck it up and get used to higher gas prices.

They use tidbits of truth to give us the impression that gas prices are outside our control but, if one reads between the lines and especially if one keeps in mind that it is SPECULATORS, not market forces driving oil prices, it becomes easy to tear apart their rationalizations.

They point out that there is so much oil out there that they have to keep it in container ships off shore and claim it is limited refining capability that creates shortages. In another section, they point out that the US exports 2/3 of the oil that it refines to other countries. How can we have a shortage of refineries if we still have plenty to send offshore? Maybe because its more profitable to ship it outside the US where it will sell for anywhere between $5-$8 or more a gallon and the natives think those prices are normal.

They also cite the tankers floating off shore waiting to bring the oil to the US but, fail to mention that this is a delaying tactic speculators use to drive up prices.


Sharks off the British coast: Oil tankers refuse to unload until prices rise... keeping YOUR fuel costs soaring

These tankers have been parked off our shores for months, refusing to unload their oil until prices have risen even higher. The delay makes millions for speculators... and keeps your petrol costs soaring. Laden with fuel, three oil tankers sit idly within sight of the British coastline, playing a waiting game that is driving up petrol prices for hard-pressed motorists.

They are part of a flotilla of ten vessels refusing to unload their cargo until market speculation has driven up its price to the level they want.

Daily Mail

So all that oil kept floating off shore doesn't represent oil that can't yet be prepared by our "limited" refineries; it represents oil the speculators are intentionally keeping out of the market until they drive the prices high enough to maximize profits.

They then say that drilling at home or releasing the strategic reserves won't help the problem. They don't take into account that the market is driven by speculation, not real supply and demand.

If you give investors the impression that the market is about to be flooded with strategic reserve oil or domestically produced oil, the speculators will start selling the oil they have been holding back NOW before the new influx of oil can drive down prices.

Once the speculators start selling off their reserves, it will create a excess in supply which will drive down prices and bring relief to people at the pump immediately. So, while that oil may not hit the market for several months, it will force the speculators to sell off their supplies now before the new oil influx can drive down the prices they so carefully drove up by holding on to the oil in the first place.

edit on 3/5/12 by FortAnthem because:
_________ extra DIV



posted on Mar, 6 2012 @ 09:46 PM
link   

Originally posted by intrptr
reply to post by FortAnthem
 


Thanks for putting the work in on your thread. I was misled at first thinking that you were dispelling the "myths of Big Oil". They do enough of that themselves though. Number three was obscene about insane profits... which they do make a boat load of.



They compare oil "profit margins" with those of other companies that are much less labor intensive. Oil needs to be refined by union labor and transported over both land and sea by well paid truckers and seamen so, yes, their profit margin is less than a corporation that pays its burger flippers minimum wage but, that doesn't mean the oil companies don't make big bucks and that high oil prices don't mean record profits for the oil companies.

If one wants to see who really makes the obscene profits from oil however it is the speculators, once again, who make the biggest bucks off of oil. They only have to pay their brokers to hold onto their shares long enough for the price to rise and then sell the oil that someone else transported and refined to market. I imagine that if someone were to look into the profit margins of the speculators, they would dwarf even the burger flipping industry.

Oil speculators make money off the misery of the average man at the pump. They know we can't get by from day to day without paying their artificially inflated prices and laugh at our misery all the way to the bank.

If only congress would re-fund those agencies that look into price fixing, maybe oil prices would fall to where they belong. And BTW, don't think it was the Republican controlled congress that's fully to blame for the situation; Democrats had control of Both houses and the presidency for two years and did NOTHING to reverse the Republican's de-funding of the investigators.

edit on 3/6/12 by FortAnthem because:
___________ extra DIV



posted on Mar, 7 2012 @ 01:43 PM
link   
Nobody cares huh?


Maybe this will get someone's attention:



posted on Mar, 7 2012 @ 05:56 PM
link   
Here's a vid showing how inflation is also causing high gas prices despite the fact that there is plenty of oil and demand is down.




It explains how inflation is making our dollars worth less so that they buy us less gas than they used to.



posted on Mar, 9 2012 @ 05:05 PM
link   
The model adopted by the Obama Administration is coming to fruition.
Obama clearly stated that energy prices would skyrocket under his plan.
This is all by design
This will drain the American Family dry.
It is a means to Totalitarian rule.
First they must strip us of all wealth, which will prevent preparation and hinder free movement.
Then by the end of Obama's second term, we will be ripe for the Socialist takeover.
It has been the plan, I think they need at least 6 months at 5.00 plus for most middle-class to end up living paycheck to paycheck, which is what the vast majority do already.
Beware of the quickening...this year is gonna be ablaze with the shear speed at which the consciousness will be evolving...godspeed to you and your's
The Rev



posted on Mar, 9 2012 @ 05:10 PM
link   
reply to post by FortAnthem
 


best post i have read in a long time.


thank you for informing me of this. makes me sick. going to research it a bit more.



how do we do to fix this problem?



posted on Mar, 9 2012 @ 08:45 PM
link   
reply to post by braydenf
 


The CFTC needs to start enforcing the laws on the books against excessive speculation. If the speculators knew that the regulators could put them in jail for what they were doing, I'd be willing to bet that oil prices would drop to where they belong pretty darn quick.




Today, U.S. Senator Maria Cantwell (D-WA) demanded federal regulators use the authorities that Congress granted them last year to crack down on excessive oil market speculation that may be contributing to artificially high gas and diesel prices in Vancouver and around the country.

Cantwell called on the regulatory body to not delay any further in implementing overdue rules on speculative position limits. The 2010 Wall Street Reform bill called for the CFTC to implement speculative position limits in energy markets within 180 days of enactment. The CFTC is more than three months late on their January 2011 deadline to take action, while consumers continue to pay high prices at the pump.

CFTC Commissioner Bart Chilton – one of five commissioners at the agency – said in a March 25, 2011 letter to Cantwell that oil speculation is at “an all time high,” up 64 percent since June of 2008. According to analysis compiled by Chilton, excessive oil speculation costs drivers between $8-16 per tank, depending on the kind of car they drive.

In August 2009, the FTC finalized its Petroleum Market Manipulation Rule, which was promulgated in compliance with legislation Cantwell authored in 2005 and successfully shepherded into law in 2007, making it a crime to manipulate wholesale oil markets. She is now calling on the consumer protection agency to use its new authority to meet their responsibility to protect consumers.

In the letter sent last month to the FTC, Cantwell noted that the price per barrel of oil over the past three years has varied drastically despite comparatively little change to the world’s supply and demand.

Senator Cantwell

Of course, its kinda hard for them to enforce the new regulations when their budget was cut by a third years ago so they don't have the manpower to conduct the investigations.

If Congress were serious about protecting Americans from high oil prices, they would pass laws AND fund the regulators who enforce them. Between the anti-oil agenda of the Democrats and the lobbying of the speculators influencing both parties, don't look for real changes anytime soon.


edit on 3/9/12 by FortAnthem because:
___________ extra DIV



posted on Mar, 9 2012 @ 09:06 PM
link   
the Us hasn't built new refineries since the seventies
the oil companies bought up all of them and shut most of them down

There is enough oil tapped and capped to bring the oil down to the same price they pay in venezuala
the north slope, and the bakun, the gulf of mexico..etc
if the US could refine it
but NO they can not (canada can't either)
Canada is in the same boat

artificial scarcity and collapsing paper money is the key to the high prices

saddam gahdaffi Iran the africans (afgahnistan had a pipeline deal)...etc
all went for other then the USD for oil ( or the pipeline deal in the stan) and look what happened
the saudis have to play the game to or guess what?

hell Iraqi oil goes by pipe to Israel then they flip it to china who refines it and sells it back to the US!

canada is in the same boat
they need about 70 bucks a barrel to pay off on the tar sands
so when we saw the PTBs putting BILLIONS into the tar sands and the oil rail to the coast we knew what we were in for.
we should be paying 20 cents a gallon....but nooooeee



posted on Mar, 9 2012 @ 09:23 PM
link   
reply to post by Danbones
 


I think the lack of refineries is the fault of BOTH government and the industry; The government won't allow new refineries to open due to "environmental concerns" and the industry really doesn't want to open more of them either because an increase in supply would drive down prices.

Here's a good article from Ralph Nader about speculation and oil prices:


Fighting the Oil Speculators
Gouged at the Pump


Earlier, the head of Exxon/Mobil estimated that speculation was responsible for over $40 per barrel in price increase at a time when oil was more than $100 per barrel.

Last June, the Commodity Futures Trading Commission (CFTC) Chairman, Gary Gensler, declared in New York City that “huge inflows of speculative money create a self-fulfilling prophecy that drives up commodity prices.”

Mr. Gensler and the CFTC received more legislated authority to police these Wall Street gamblers, but key members of Congress refused to give him a budget to, in his words, “be a more effective cop on the beat,” at a time of sharply-increasing trading volume. Congressional campaign budgets are being swelled by campaign contributions from those very Wall Street gamblers. This is called “cash-register politics.” Meanwhile, you the people pay and pay at the pump and wonder why no one is doing anything about it.

But an inadequate budget only explains part of Mr. Gensler’s problems. He is continually undermined by other CFTC Commissioners who do not want real enforcement action. He also seems to be wearing down under the pressure.

Mr. Obama and Energy Secretary Chu keep saying that there is enough oil in world markets and that speculatively-driven higher oil prices are undermining the U.S. economic recovery. Yet Mr. Obama seems unwilling to fully use his administration’s existing authority to crack down on the surging speculation.

There is much more action possible under current statutory authority for the regulators to use and earn their salaries. They need to hear louder rumblings from the people.

Counterpunch

$40 per barrel is caused by speculation. That stat needs to be made more widely available. Then maybe people would be calling for heads on pikes in this economic war against the American people. Also note that number doesn't come from some left-wing source; it comes from an oil company executive, hardly a OWS type activist.



posted on Mar, 13 2012 @ 10:57 AM
link   
reply to post by FortAnthem
 


This is a bunch of propaganda. I don't care what McDonalds makes in profit...the fact is I can choose NOT to eat at McDonalds....but I cannot choose Not to use gas in my vehicle.
This post is pure B.S. Kind of like the Bush Jr.'s administration saying : "Be thankful that your car doesn't run on MILK."
Gas is, and always has been, manipulated. Now more than ever.



posted on Mar, 27 2012 @ 11:36 AM
link   
reply to post by FortAnthem
 


This blog is efficient but not sufficient in explaining who controls the world's oil. I found the answer in Dr. Ira Teller's book CONTROL SWITCH ON. I was greatly impressed by his knowledge of Ryan Moran's organization and how oil is manipulated around the world. I found a down load of the book for free at www.controlswitchon. I recommend you read it to get a true perspective of the issue.



posted on Dec, 11 2012 @ 08:28 AM
link   
reply to post by FortAnthem
 


Thought this was interesting...




posted on Jan, 3 2013 @ 11:10 PM
link   
reply to post by FortAnthem
 


Let's play a little game, if oil prices where lower would Americans consume more oil? If oil prices where lower in America who would get less oil?

Who benefits from higher American oil costs?

Who owns most of those oil companies from Dutch Shell to British Petroleom?

They are intentionally inflating the cost of oil so there is more available on the market.
The reason why they want a surplus is so they have a surplus to bring back to their own countries.
They are the UK and EU. They are raping our country so they have a supply of cheap oil to prop up their governments.
Remember, oil is only expensive in the UK and EU because of taxes, and also remember how the Federal Reserve is doing everything in their power to keep the pound and Euro ahead of the dollar. Because if the dollar surpasses the Euro and Pound, the shell game collapses and the UK and EU collapses as well.

So they will see us suffer, starve and freeze to death just like the UK did to India. That is why more and more British redcoats are infesting the American media, to act as lubricant while we are being raped.



posted on Jan, 6 2013 @ 03:29 AM
link   
I think media dramatizes this situation i bit over the top, This up coming new year is going to be nuts as in regards to if the oil price bumps up another notch.





new topics




 
5

log in

join