Re: congress/oil compaines/crude/record profits

Posted by Steve KS on March 17, 2006 at 07:48:03 from (198.248.192.39):

In Reply to: Re: congress/oil compaines/crude/record profits posted by Gary in Tx on March 16, 2006 at 18:40:14:

No offense taken at at all. You're absolutely right, prices SHOULD be about the same as they were. But the reason oil companies are getting record profits is simple 3rd grade arithmatic - no college needed. For simplicity, lets say in 2004 Bob's Oil Co. was selling 200 barrels of oil, the price was about $35/bl, that equals about $7,000 in gross revenue. This year Bob's still selling the same 200 barrels of oil, but the price is now $70/bl, he's now making $14,000 in gross revenue. His costs stay roughly the same, so - record profits. Now the only argument you could make is that the oil companies are setting the price of oil - the simple truth is that the domestic oil producers simply don't control that much of the world market to be able to have much of an impact on the price.

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