Originally Posted by CAMike
I don't see the gas companies giving up the HUGE profits they continue to make through all of this. I'm not against them making money but when gas is at an all time high and their profits quarter after quarter are also at an all time high something is wrong. The consumer gets screwed as we have no other choice really. I know the environmentalists will flame me for this but if we have domestic oil available that would truly lower the price (ar at this point even just stablize the price) and reduce our need for foreign oil and the issues that go with it, we need to work to start using our resources. The economy is getting weaker and weaker and gas prices are starting to play a major role in the downward movement of the economy (airlines cutting routes, charging for baggage, food prices increasing, tourist destinations losing money as people are staying closer to home,money that used to be spent for movies-eating out-vacations-etc are now having to cover fuel bills...). Something has to be done...Sorry if that means the pink legged yellow billed striped winged fluffy bird has to build it's nest on an oil pipeline...just my opinion and I'm no expert on any of this...just my take.
I have to admit that this thread shows almost a total lack of understanding of how gas (as in gasoline) prices are determined. I work as a oil trader for a large multinational O&G company here in Calgary, AB. For those who don't know Alberta has enough oil in the ground today to supply the current WORLDs demand for oil for 50 years, (that's right I said 50!). Gettting it out of the ground is another story but we have access to about 65% of this currently.
Yes, it is true that high oil prices generally trend with higher gasoline prices, but they are not the direct contributing factor. In simple terms, there are two factors that impact gasoline prices the most, they are TAXES & REFINING CAPACITY.
Want to lower the price of domestic oil? The US needs more refining capacity, and in europe the US needs to stop blocking the flow of oil from Iran to countries that can refine it (Turkey, Turkmenistan etc.). It would also be great if China and India would adopt a higher gas tax, which would also serve to reduce demand.
Second, I am looking a research today that shows US gasoline demand is decreasing. Which of course isn't a big shock given falling housing prices, increased gas prices, decreased appetite for big SUVs, and a general weakening of the USD and economy as a whole. In the next few months I would actually predict a decrease in the overall US gasoline price but I am thinking more like .50-.75.
Please note that I am seperating out the political problems of allowing Iran to do whatever it wants. for instance allowing a pipeline from Iran to Pakistan would be in violation of current US sanctions etc. Even though it is badly needed.
Second, don't be upset with O&G companies, as we make almost nothing from downstream operations (putting gasoline in the pumps). Most of our money is made though marketing refining of petroleum products (midstream), and upstream operations which is getting the oil & natural gas products out of the ground.
If you read this post all the way through, I am impressed. Although, if anyone has any questions on how these things work let me know as I do this for a living.