Gas

[rustbucket]

All the easy oil is gone. A lot of the offshore projects now are what's termed "deepwater" or "ultra-deepwater". Very expensive to extract. Plus, a lot of the regulation has added a lot of cost to drilling. Some of these holes cost billions of dollars to drill and set up to produce. That's before a single drop of oil is extracted. Some of the oil is very costly to process, such as what comes from oil sands. Some of these projects are on hold until the cost of oil is high enough to make it worth the risk and investment.

I read the daily newsletter from Rigzone every day, and I can tell you a lot of wells come up dry, or the amount of oil is too little to be worth extracting. This also has to be factored in and paid for by the oil companies.

And yes, oil companies are International businesses, and sell the oil on the open market much like an auction system. A lot like eBay, I guess. Whoever is willing to pay the most gets the oil. Oil is a commodity product, and is just about as perfect an example of a free market as there can be.

Let me ask you this; if you're getting paid X now for your current job, and another company in town offers you a 30% pay raise, would you take it?

And before we string the oil companies up, remember that the oil industry has seen its share of ups and downs, as well. There have been several periods where they were actually loosing money. The 80's and into the 90's were not good years. Oil cities such as New Orleans and Houston weren't doing all that well, and had pretty high unemployment compared to other parts of the country.

I agree that not everybody owns stock, but if you have a 401k, IRA or any other type of retirement or pension plan, chances are you have stock in oil companies, and are therefore benefiting from the earnings through increases in stock valuation or dividends that get reinvested. If you don't have a plan.....

 

[KS.76Sport]

So what is your master plan to stop the evil oil companies from stealing from the citizens?

Obviously your question is rhetorical by throwing in a sarcastic "evil oil companies" statement. You have no interest in hearing "a plan", if you did you wouldn't have phrased the question that way.

Further debate on this topic will go nowhere getting responses like this. And Im bored responding to close minded people that only know how to throw accusations and immature labels.

Finished here.

 

[KS.76Sport]

This is more like it! Thank you Rust Bucket, I feel I have to respond because you present good points in a decent manner.

I feel that the free market should dictate prices on everything and anyone should be able to make as much money as they damn well see fit. Unless they are using public resources to make that money. Oil from a private holding? They can charge whatever they want, its theirs to do so. But you have a government that is selling public resources (most people don't realize its theirs) then lets the lease holder sell it back to the owner at an inflated price.

If your city allowed a private company to drill a water well in your neighborhood public park. (This would be your neighborhoods only source of water.) Then that company charged you $1 a gallon for water, because that's what the price of water is in the next county. Wouldn't that piss you off? Wouldn't you want some say in how much this company could charge you seeing as how it came from your cities (yours, the taxpayers) land? This is the same thing that's going on with fed land oil.

Because we own it, we should have a say in what it sells for here. If the oil companies don't agree to our cut, then they don't get to pull it up. But that's not whats happening. Thats what Im arguing here.

 

[jw0747]

If your city allowed a private company to drill a water well in your neighborhood public park. (This would be your neighborhoods only source of water.) Then that company charged you $1 a gallon for water, because that's what the price of water is in the next county. Wouldn't that piss you off? Wouldn't you want some say in how much this company could charge you seeing as how it came from your cities (yours, the taxpayers) land? This is the same thing that's going on with fed land oil.

the utility or private company who drills and produces water has to charge for it. do you really believe that if it comes from a government plot of land it should be free or so low cost that "the people" wouldn't bitch? a government utility has to meet expenses and a private utility is in business to make a profit. we live in a large city and all our water wells are on public land which was bought by our govt. water producing utility but we still have to pay for it.

what is your definition of "inflated prices?" do you actually believe that gasoline prices at the pump are inflated for no good reason when the price/gallon cost moves upwards? you said you read about the oil business but do you have any knowledge of how much it costs to produce a barrel of oil or a gallon of gasoline? and how that cost relates to the price at the pump?

it costs oil companies billions to lease federal land for drilling. why would they and their shareholders be agreeable to drill on federal leases and produce and sell products at a loss so "the people" won't whine and bitch? makes no sense.

 

[Wyflyer]

Obviously your question is rhetorical by throwing in a sarcastic "evil oil companies" statement. You have no interest in hearing "a plan", if you did you wouldn't have phrased the question that way.

Further debate on this topic will go nowhere getting responses like this. And Im bored responding to close minded people that only know how to throw accusations and immature labels.

Finished here.

Hahaha you won't answer my question because I said "evil oil companies" and it's a rhetorical question??

And this is after you made a few rhetorical claims yourself:
"We are all getting f***ed right up the dirt pipe by these oil companies."
"...all it will do is make the oil companies richer."
"The oil companies got us by the balls, and they know it. "
".... monopolies"

Okay, lets not call them "evil", just call them oil companies. How would you do it differently?

 

[nemo]

All the easy oil is gone. A lot of the offshore projects now are what's termed "deepwater" or "ultra-deepwater". Very expensive to extract. Plus, a lot of the regulation has added a lot of cost to drilling. Some of these holes cost billions of dollars to drill and set up to produce. That's before a single drop of oil is extracted. Some of the oil is very costly to process, such as what comes from oil sands. Some of these projects are on hold until the cost of oil is high enough to make it worth the risk and investment.

You seem to know a lot about oil companies, help me understand if it costs billions of dollars to drill "deepwater" and all the cost of regulation and land leasing. How can one oil company post yearly profits of 40 billion dollars!!
Also why are gas prices nearing 4.00 per gal,when the price of oil is like 30.00 dollars cheaper now than it was in 2008 when gas was at 4.00 per gal.It just seems like "We are all getting f***ed right up the dirt pipe by these oil companies."

 

[dead road]

It is my observation as an owner of a gas station that Oil companys are jacking prices right now so when the politicians bust there balls to lower prices as we get closer to november we will end up around 3.89 just like we are right now and the oil companys won't have to cut into their bottom line.

 

[nemo]

It is my observation as an owner of a gas station that Oil companys are jacking prices right now so when the politicians bust there balls to lower prices as we get closer to november we will end up around 3.89 just like we are right now and the oil companys won't have to cut into their bottom line.

If you own a gas station,is it true that you make no money on gas? I have heard people say owners only make .01 cents on a gallon of gas . Also how do you as a owner pay for the gas? You can see the price go up and down daily but you do not see a tanker truck there filling up the tanks? I hope you don't think I'm saying your the one sticking it to us because I don't,I'm just curious how it all works .

 

[Wyflyer]

You are correct, Exxon Mobile made 41 billion dollars in 2011, a 31% increase from 2010. But their production only increased 1% from 4.4mmboe to 4.5mmboe in 2011.
So this obviously means they got more dollars for nearly the same production. They don't price their product, pricing is done by global supply and demand, they only respond by producing a commodity.
All oil companies have gigantic marketing teams within the company who's task is to market their product as best they can. And the Exploration and Production team has the task of finding and developing new oilfields. And there are other teams who must replace the expended reservoirs because everyone knows every oilfield has a limited lifespan and must be replaced with new discoveries. LIke all business, oil companies hope their income is greater than their expenses, and if some nutcase like Chavez takes over his own Venezuelan oil companies or Iran theatens to shut off the taps, then oil futures soar. This is not the doing of "oil companies". But I digress... when OPEX (operating expense) is low or oil/gas prices are high they make a profit. If they have new projects they pour that profit into new projects and exploration as CAPEX (capital expense aka capital projects) to replace declining production. If profits are large and they do not have enough capital projects they often pour that money back into buying back their own shares or retire debt. But any oil company that neglects it's exploration will fail because eventually their oilfields will decline. Think of a grocery store that stops ordering new stock and only sells whats on the shelves, there is a day of reckoning somewhere. Oil companies, like all companies, want to produce and sell a lot of the product they produce. OPEC tends to balance production, to keep prices high but not so high as to collapse economies, but not so low as to create gigantic swings in production. And when you stop drilling and producing due to low price, it takes years to get that production momentum back online.
And, oil is bought and sold on the global market in dollars, and when the dollar drops in value it requires more of them to buy the same barrel of oil even though supply and demand did not change. And oil is also one of many commodities which is sold on the stock market, which carries with it the volatility of that market. And of course the oil companies are investments for many 401ks and other investment funds, so while you hate them making a profit you don't mind them making your 401k a profit.
Here in America, not all oil companies are refiners, and not all refiners are oil companies. Meaning, many oil companies have no involvement in what their produced oil turns into.
I know this is greatly simplified, but my point is it's easy to sit on the sidelines and make broad statements about oil companies, but the facts say otherwise. They are just a business that produces a product that is priced by supply and demand.
But one thing is sure, you can take a stand on principle and stop using oil or oil byproducts, like gasoline, oil, grease, plastics, fertilizer, etc. Stop using what they sell, pull your investments out of their stock, and live your convictions. And get another couple million people to jump in with you and you'll have some real impact.

 

[rustbucket]

A lot of the price fluctuation we see at the pump come from speculative investors. They buy oil futures in the hopes that prices go up. When there is unrest in oil producing countries such as Iran, supply is threatened, which cause uncertainty, thus refiners and other interested parties are willing to pay more to secure a supply.

Gas stations typically earn 5-15 cents per gallon, depending on if it's a flag brand or independent. Independent's are on the higher end, and flag's such as Chevron and Exxon on the lower end.

 

[Kyle.malone]

Might want to check you cabinets and throw all these things out. They are made from oil.

A partial list of products made from Petroleum (144 of 6000 items)

One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like:
Solvents
Diesel fuel
Motor Oil
Bearing Grease

Ink
Floor Wax
Ballpoint Pens
Football Cleats

Upholstery
Sweaters
Boats
Insecticides

Bicycle Tires
Sports Car Bodies
Nail Polish
Fishing lures

Dresses
Tires
Golf Bags
Perfumes

Cassettes
Dishwasher parts
Tool Boxes
Shoe Polish

Motorcycle Helmet
Caulking
Petroleum Jelly
Transparent Tape

CD Player
Faucet Washers
Antiseptics
Clothesline

Curtains
Food Preservatives
Basketballs
Soap

Vitamin Capsules
Antihistamines
Purses
Shoes

Dashboards
Cortisone
Deodorant
Footballs

Putty
Dyes
Panty Hose
Refrigerant

Percolators
Life Jackets
Rubbing Alcohol
Linings

Skis
TV Cabinets
Shag Rugs
Electrician's Tape

Tool Racks
Car Battery Cases
Epoxy
Paint

Mops
Slacks
Insect Repellent
Oil Filters

Umbrellas
Yarn
Fertilizers
Hair Coloring

Roofing
Toilet Seats
Fishing Rods
Lipstick

Denture Adhesive
Linoleum
Ice Cube Trays
Synthetic Rubber

Speakers
Plastic Wood
Electric Blankets
Glycerin

Tennis Rackets
Rubber Cement
Fishing Boots
Dice

Nylon Rope
Candles
Trash Bags
House Paint

Water Pipes
Hand Lotion
Roller Skates
Surf Boards

Shampoo
Wheels
Paint Rollers
Shower Curtains

Guitar Strings
Luggage
Aspirin
Safety Glasses

Antifreeze
Football Helmets
Awnings
Eyeglasses

Clothes
Toothbrushes
Ice Chests
Footballs

Combs
CD's & DVD's
Paint Brushes
Detergents

Vaporizers
Balloons
Sun Glasses
Tents

Heart Valves
Crayons
Parachutes
Telephones

Enamel
Pillows
Dishes
Cameras

Anesthetics
Artificial Turf
Artificial limbs
Bandages

Dentures
Model Cars
Folding Doors
Hair Curlers

Cold cream
Movie film
Soft Contact lenses
Drinking Cups

Fan Belts
Car Enamel
Shaving Cream
Ammonia

Refrigerators
Golf Balls
Toothpaste
Gasoline

We need the oil companies and they need us to buy these products. The drilling in the gulf use to be a 30 page document to drill. Because of OBAMA's great idea to push clean coal, the documents to fill out are now over 2000 pages. The surplus of natural gas should be used to make power plants instead of "Clean" coal..

 

[KS.76Sport]

it costs oil companies billions to lease federal land for drilling. why would they and their shareholders be agreeable to drill on federal leases and produce and sell products at a loss so "the people" won't whine and bitch? makes no sense.[/QUOTE]

Never said they should take a loss, or give it away. If your okay with what they are doing, that's fine. Ive made my point as clear as I can, some will see it, some wont. You don't like what it is I have brought to this discussion and that's evident. That is all I will further add to this with you. If you think that makes you the winner, cool, I concede.

 

[KS.76Sport]

Hahaha you won't answer my question because I said "evil oil companies" and it's a rhetorical question??

And this is after you made a few rhetorical claims yourself:
"We are all getting f***ed right up the dirt pipe by these oil companies."
"...all it will do is make the oil companies richer."
"The oil companies got us by the balls, and they know it. "
".... monopolies"

Okay, lets not call them "evil", just call them oil companies. How would you do it differently?

I see that my point is not registering with you. We could have had a decent exchange of ideas (maybe) if you hadn't made the initial judgement that I "dont know what I'm talking about". I have made my point, some will understand some wont, and thats fine. I wont continue to try to get it across with you anymore. I recognize a no end situation when I see it, and I'll leave it at that. If you need to gloat, feel free, I concede victory to you.

 

[Wyflyer]

I see that my point is not registering with you. We could have had a decent exchange of ideas (maybe) if you hadn't made the initial judgement that I "dont know what I'm talking about". I have made my point, some will understand some wont, and thats fine. I wont continue to try to get it across with you anymore. I recognize a no end situation when I see it, and I'll leave it at that. If you need to gloat, feel free, I concede victory to you.

I'm happy to exchange ideas with you, but if you don't know what you are talking about i'll tell you so. Your initial statement was a blind rant against oil companies. In several subsequent posts you did some research and made some valid points and if you notice I did not challenge those posts.
No gloating, just give and take.

 

[TAC71]

Gas here in canada is over $6 a gallon ,,,glad I run propane, about $3.20 a gallon

 

[dead road]

If you own a gas station,is it true that you make no money on gas? I have heard people say owners only make .01 cents on a gallon of gas . Also how do you as a owner pay for the gas? You can see the price go up and down daily but you do not see a tanker truck there filling up the tanks? I hope you don't think I'm saying your the one sticking it to us because I don't,I'm just curious how it all works .

I can't speak for other gas station owners but I do make more than 1 cent per gallon. The fluctuation in prices has a huge effect on my purchasing. I pay for 10,000 gallons of gas at a time, and I pay the price it's at when it is delivered. So 30 cent fluctuations to me in one day can have a huge impact on my profits. At times it feels like being a day trader. I did however learn long ago you win some you lose some no matter how hard you try. So I just order fuel when I need it and live with the price I paid. I will say that these upswings in price are a killer for me. My markups are by the gallon where credit card company charge by a percentage. So my markup is basically the same for a 3 dollar gallon of gas or a 4 dollar gallon of gas. But the credit card companies take a larger bite out of my markup when their percentage is applied to 4 dollars vs 3.

 

[rustbucket]

I think a lot of the oil companies get a lot of flack because of the incredibly large sums that hit the news. When you hear that Chevron made $19B in net income in 2010, it's such a large number it's almost unfathomable. But, to put it into context, Chevron employes 62,000+ people world-wide, about 30,000 of which are in the U.S. That does not include all the contractors that work for them, such as drilling contractors, and engineering companies, etc. They had gross revenue of $205B. That gives them a net of less than 10%. I don't think that is too out of line with the other industries out there. I bet 2011 will look better, but I don't think it's going to be outrageous considering their size.

 

[nemo]

Exxon Mobil made a 40 billion dollar profit in 2011.Profit to me means after expenses.Maybe they don't set the price of oil,but I sure bet they can influence the price.

 

[rustbucket]

Exxon Mobil made a 40 billion dollar profit in 2011.Profit to me means after expenses.Maybe they don't set the price of oil,but I sure bet they can influence the price.

Yes, on $486B in revenue. So their margin is about 8%. They also employ over 80,000 people. It's all about context.

 

[Skiddy]

Here in Oklahoma, my brother owns a company that converts motors to CNG or a bifuel setup (Can run cng or gas at a touch of a button.) I have 3 trucks in my company that are dedicated CNG and they work perfectly. Here is the best part, CNG here is $1.29 a gallon. I know they dont have many stations across the country but they are starting to pop up like crazy in Oklahoma. So I am looking at adding the CNG option to my bronco. It would be great and cheap to drive around here.

that's cool, my boss is thinking of swapping over to CNG from diesel in her dodge. she can fill up at the air port. we need more of these to help kyle and myself to keep our jobs;D