$3.65 for regular at the no name cash only place in town. I was there to fill the gas cans, not the RX, though there was an LS behind me. I'm down less than a quarter tank in a week. I can wait. Prices overall have crept up to $4.00 for premium, some are already beyond that.

 

$4.49 today.........what is going on it was only $4.15 when I fill it up about 10 days ago!!

 

Just wait til summer.

 

I only quoted the above because it's all I need to show you have a loose grasp of economics - enough to be dangerous, as they say.

It is apparent you don't understand how assets are managed nor how the logistics of reservoir development work. The quote above has nothing at all to do with sitting on reserves, holding back production and waiting for prices to increase for massive profits.

If you only have so much capital, you of course spend it on the highest ROR investments, and not on those that would not earn a positive cash flow at current (not necessarily future) market macroeconomic conditions.

Remember that as the price of oil goes up, the cost to drill and complete wells also rises. Expenses do not stay flat as costs rise - the oilfield service industry is subject to supply and demand just as oil itself is, and the #1 cost is diesel.

You haven't proven anything. You've simply misunderstood the data you cite.

I said it before, and I'll reiterate again - record profits merely indicate a healthy company. Stop trying to skew the term to mean "exploiting americans".

Yes, the solution is more taxes.

Taxes are always, in the end, paid by the consumer. The federal government went for 6 months without a budget. You really think we should be giving it more money?

 

I am sorry but the Government keeps on taking, and taking, and taking. They need to stop spending instead of raising taxes. Gas prices are this high because of speculators.

I don't care that oil companies are recording record profits good for them. It isn't them that are raising gas prices, so why would it be fair that the Federal government take more of their profit, which they will squander anyway?

 

a huge +1 -- oil is a commodity & necessity ....the ipad/iphone...not so much.

 

All you need, eh? My grasp of economics is a bit more than "loose" considering that's my field. Stop with the personal statements and stick to debating the facts.

Again with the personal, but let's clarify - I absolutely understand how the assets work and they are increasing them every year. How can you say it has "nothing at all to do with sitting on reserves" when that's EXACTLY what the article discusses and XOM states? If you cannot extrapolate the information when it is handed to you on a platter like this, that falls on you.

Economic basics. Thanks for clarifying??

Who said the costs remain flat? One of the largest costs is exploration, and you're not counting that into the factors. They are exploring and building reserves now in anticipation of future demand (as they should). Given the control that XOM has over their own resources for drilling and completing wells, they can anticipate their costs and control them as well as anyone. Again, this allows them to maintain reserves and deliver them to market in the most profitable way possible. Or are you inferring that they don't sign contracts with any outsource providers to control costs?

Incorrect - as proven again above. You misreading/misunderstanding the data is where the problem lies.

NOW I'VE SAID IT BEFORE AND I'LL REITERATE - DO NOT PUT WORDS IN MY MOUTH. I specifically stated that I was not accusing anyone of exploiting Americans. You may find others saying it, but not I. Don't equate me with them.

I would continue to discuss this, but you clearly do not want to see anything contrary to the position you are taking, despite the facts to the contrary delivered directly by one of the largest oil companies in the world. Flail away if you would like, but until you are willing to see that, there really is no point in further discourse.

Big Mack

 

Are we going to see $6 by the summer

 

gas prices are going up because of all the money printing all around the world and especially here. Everything is increasing in price food, raw materials, energy etc all because of this.

 

oil prices were in the tank compared to last year, of course they would have a large increase in profits

Oil companies profit margins are around 8-15%. I really hope some of yall don't drink beer because breweries or eat at restaurants that make almost 60% profit. The only reason energy companies have huge numbers for profits is because they sell a GIGANTIC amount of product and are some of the larges companies on the planet that employ million of people either directly or indirectly. US accounts for about 11% of the worlds oil production, do you really think they alone can determine the world market price for oil? Oil is a commodity traded all over the world on the world market. They can somewhat affect it but they cannot control it.

If you think about it, its a miracle that oil is $3.5 a gallon or whatever. It costs billions of dollars and many years to explore, build a platform, drill down to the oil, pump it up, build the pipeline, build the refinery to turn it into gasoline. The amount of engineering and infrastructure needed is staggering. Yet at the same time people have no problem paying more per gallon for starbucks, coffee, sodas, sports drinks, laundry detergent, household chemicals that do not require an offshore platform, a pipeline, a tanker, a refinery to produce.

People try to vilify oil companies but they provide an extremely valuable service. What if oil companies just stopped providing their services. Can yall imagine the dramatic reduction in our standard of living if we didnt have oil. Who's going to get the oil if oil companies dont?

 

And now back to our regular scheduled programming...

Gas prices up 1cent this week in CA.

 

Ladies and Gents please be civil.......

My 2 cents...buy oil company stock, profit off their gains by selling stock at a higher price, buy gas and more fuel efficient car with gains, repeat cycle

We know its going up and we saw this coming so nothing to really complain about. Change your habits or be a victim to higher gas prices.

 

Reserves are booked based on a price deck provided by the SEC. This is not the same price deck used internally by most companies. Therefore reserves that the SEC lets you book do not necessarily yield [what would be deemed] economic projects [based on internal discount rates]. It's solely a measure of valuation of an energy company.

If you accept that a company has a finite amount of capital, then you must also accept that projects they do not spend that capital on are a) not as competitive as those they did spend capital on, and b) not sitting just around waiting for inflated prices - waiting for the project to yield positive economics metrics (via changing the scope of the work required, a revised estimate of reservoir potential, service company rates to drop, or a number of other factors), yes, but then what business doesn't do that?


Booked reserves do not come solely form Exploration. In fact, most reserves bookings do not come from Exploration. Again, SEC guidelines for booking reserves differ wildly from internal valuation of assets. It's done solely for investors. Private companies do not book reserves.

Exploration is certainly not one of the largest costs. If you look at capital on a per-project basis, yes, exploration wells are capital intensive. But when you consider total capital spent, an overwhelming majority is spent on development wells, and one of the largest components of that would be diesel fuel. (As well as one of the largest components of any exploration wells drilled).

Land is expensive, certainly, but when you look at any sensitivities when evaluating a project, you'll see that it's essentially negligible if the reserves are there.

Costs can be "anticipated", but when the data is good, reserves are quite fixed. Your term "most profitable way possible" is quite ambiguous.

Your misunderstanding comes from mixing up SEC rules and guidelines on reserve bookings against what projects will actually yield positive cash flows.

So what exactly are you saying, here, then? You're like Glen Beck - You've stated things that you say you aren't exactly saying.

You've implied that they might be gouging customers now but have avoided asserting it (because you never stated they aren't), and when prices are low and they are losing money it is their fault for bad investments.

Your first paragraph, here

implies they can just uncork wells and produce oil to satiate demand, which is false.

Since I was responding to sensationalist posts about oil company price gouging, if you aren't on that train, I'm not sure why you went out of your way to quote every paragraph I wrote and attempt to correct most of them. One would think you generally agreed with what I was trying to refute.

 

If anyone is curious, here is the cost breakdown from American Petroleum Institute (API):

68% - Crude cost
18% - Refining, distribution and transportation cost
14% - Taxes

 

Again with you not reading the article? I was not commenting on the SEC regulated reserve valuation, nor did I even bring up the SEC. Don't try to skew it to make your invalid assertions look correct. I was commenting on the information in the article. Maybe now that will sink in.

Unsuccessful ones. This is another economic basic that has no merit in the discussion, nor a need to explain to me.

Yes, it is. It isn't the top 3, but it's a pretty decent amount - especially as locating it becomes more challenging.

What?? How can anyone misconstrue that as ambiguous?

No, as I explained above, your misunderstanding and unwillingness to read the article and understand that my comments are based on the information within is where the issue is.

Don't you ever equate me to that idiot again. I take that as a personal insult.

Really? I implied that? No, I most certainly did not. And as a matter of fact stated the opposite was my opinion:

I never said they could just uncork the wells. I am well aware that the oil reserves would still need to be refined in order to hit the market, but if there is no oil to be refined, it's rather pointless to consider. And no, it is not false - they have a reserve for a reason. Profit. It's not a bad thing, nor illegal, but it is a strategy they stated they employ. Why you feel that the company's own statements are something not to believe or choose to disagree with in the hope of proving your mistaken and false points are where the concern is.

I don't agree with the idea that the companies are gouging, but I also don't agree with many of the statements you made:

1. They lose money more often that not and on one knows or complains when that happens.

B. They don't charge for oil.

3. They have no cost containment, so their costs skyrocket as the market price increases.

That's the top 3. And I think I did a pretty decent job of correcting most of your erroneous assertions. You can continue to make them, but it doesn't make them true any more than the assertions of people who figure the companies that are profiting are gouging. I won't give an economic basic like supply/demand, etc., since I'm sure most people get it already.

I do agree with you that the companies are not gouging, so let's just leave it at that.

Big Mack