Was 3.80 for premium going to school today, 3.86 coming back home....freaken amazing >_>.

 

It's amazing that you all not only think oil companies magically set the price of a commodity, but that they also have huge untapped reserves just sitting around that they can instantly start producing from.

Furthermore, you are outraged about these "record profits". Where is your outrage when prices where low and companies were reporting "record profits", only of the other kind. You know, like in 2009 when natural gas prices bottomed out (they still haven't recovered) and most independent E&P companies reported a loss for the year? Rig counts still haven't recovered.

These two things demonstrate an ignorance the industry and economics, and I'd venture to say you're just as mad that you don't understand the situation as you are at having to pay a lot at the pump. Let's help that.

Depending on the type of well, it can take a rig anywhere from 3 weeks to 2 months to drill a well. Sometimes longer for extremely deep wells (6 months is not unheard of). A land rig costs roughly $80,000 a day to operate, not counting specialty rental tools that can add $10,000 or $30,000 a day, even more in some cases. This does not include company overhead.

These days it costs even more to complete the well than it does to drill the hole and cement pipe in the ground. A "completion" is an establishment of a flow path from reservoir to wellhead, and without one, they will not flow at economical rates (and often not at all). So take your drilling costs and multiply by 2.

Part of what you pay at the pump includes risk associated with drilling a well. These things target rock miles underground that we cannot see, and can not tell before hand how much oil a specific well will produce. We can guess, and the error in that guess is represented in that pump cost. Sometimes they produce nothing. Many lose money. Most provide around a 5% to 20% ROI (again this is before overhead). Wells better than that are pretty rare.

A healthy company should be reporting "record profits" every year. It shows they are making sound investments, reinvesting capital, and growing their business. Or did you forget the entire point of capitalism? Here's a hint - a corporation exists for one purpose and one purpose only - to make money.

Your outrage at "record profits" is nothing short of ridiculous. It's like a two-year old throwing a tantrum because it's time to leave the amusement park, forgetting that they've had all day to enjoy the rides. You knew this was coming. You've had plenty of time to prepare for it. Yet when the time gets here, you scream and stomp your feet and yell about how it's not fair for the big people to ruin your fun. Because in your little world, you can't see the traffic on the highway just waiting for your car - traffic that you will sleep through while someone else solves the problems required to get through it. Or the chores waiting to be done at home - chores that you'll miss because you're in bed. And of course, they do have to get up at dawn tomorrow and go to work. That money doesn't just magically appear. No, your fun is ruined and you're going to let everyone know.

 

These comments above are shockingly cold. The high prices are drastically hurting an entire society. How can that not be of concern or a major crisis? You think it should all go on as the good 'ol capitalistic way? Millions of people here are being affected, and in a big way! Cutting out basic necessities to pay for expensive gas is a huge sacrifice for the average family and no fun for anyone.
Your description of how much it costs oil companies to drill and invest sound just like a co-worker of mine. He is the only person I know who has defended the high gas prices. Guess what... he owns land upon which an oil company pays him royalties for drilling on. No wonder he's okay with it. And I don't care how much it cost them to drill, invest in new areas, take risks, buy WD40, or do whatever it is they need to do to operate. In the end, they are still posting astronomical profits. That means they inaccurately calculated their costs and overcharged, which is pure rape. It's outrageous the level of greed here.
But what's new. This is the new corporate American way. We now have to pay an arm and a leg to watch TV, see a movie, buy popcorn, buy a cup of coffee, talk on the phone, park a car, drive on a highway, enter a park, sip a cocktail, walk on a beach, etc etc. Like banks, credit card companies, health insurance companies, and everyone else, oil compaines have finally caught on how to make as much money as possible off the captive public.

 

So, the gas prices went up where I live. Not sure if anyone else here is noticing this in their locations. Please, if you can, update your information on where you get gas normally, like the way I did below.

04/03/11: $4.21 Regular, Chevron, Pasadena, CA.
04/06/11: $4.27 Regular, Chevron, Pasadena, CA.

^I'm sure after a few weeks, we'll start to notice a pattern with the way the gas prices are rising.

Will it pass $5 a gallon by this summer? I think it's possible...

 

For those wanting to check out prices in their area, http://gasbuddy.com/ does a pretty good job of it.

We may see $5+ for a busrt, I keep getting calls to fill my propane tank at "low locked in rates" which usually tells me propane is dropping soon, which it is and usually does this time of year but that often preceeds the gas pricing trend.

 

No straw men please.

The actual public data disagrees with you. Most American E&Ps reported a loss for 2009, some even for 2008. You have lost this point - you must concede it.

Do you have a crystal ball with which to predict the future? You've still ignored the fact that they lost money within the last few years. Are you opening your wallet to pay them the difference because they undercharged you?

This is a pathetic (in the classical sense, logos ethos pathos) argument and severely dramatic at that. Again, no straw men please.

These words don't fit what you are describing. Might I suggest you tone down the language and speak a little more rationally?


You've missed the entire theme of my post. You assume oil companies "charge" for oil. No. They are paid whatever market rate is, just as you pay whatever market rate is.

I'll summarize my prior post -

a) Oil companies do not set prices. They are at the whims of the market just as much as you are.
b) No one complains about oil companies losing money when prices are low.
c) The public is aware of the volatility of oil prices. We've had many stern lessons in economics over the past 30 years.
d) You are blaming someone else for the decisions America has made with this knowledge in mind and the situation into which it has put you. Perhaps the American people should be more mad at themselves for a lack of votes over the years for a comprehensive energy policy.

Of course, "the American people" is not a well defined image with which to focus your emotions. There is a reason Orwell put a face on a TV screen that people could relate to.

Now, I'm not telling you who specifically you should be mad at, just that you're mad at the wrong guys.

 

^ Good point

 

Everyone, lets not make the comments personal and stop the jabs.

 

With the price of gas these days, who can afford to stalk anybody?

 

Economy will crash soon. I hate the Taliban

 

04/06/11 evening prices in San Jose, CA:

Chevron regular $4.139
Chevron premium $4.339

 

Best to use Prius in stealth econo mode, for long distance stalker relationships.

 

Gas prices is f@#$king expensive, these SOBs raise gas prices at will which their profit are astonishing in $40 billions. So now I only buy half a tank and no longer fill up when I gas up. I do not have to carry "their" inventory around with me to create excess inventory in their tank!!!!!!

The oil companies will have so much inventory sitting on their huge repository would get rid of at lower price.

 

$110.30 a barrel yesterday.
$150 and $5 a gallon by summer.

 

Anyone wanna carpool?