Diesel UP feb2012

[Baby Grand]

Commodities are wierd that way. When there is 101% of what you need, it's hard to give the stuff away. When there's 99% of what you need, people start shooting each other and you can't buy it for any price. So if the market movers believe (or can convince everyone else) that there's only 99%, then it's off to the races.

 

[rd_macgregor]

The relevant technical terms are "price elasticity of supply" and "price elasticity of demand", sometimes shortened to "supply elasticity and "demand elasticity". The economist jargon just means "how responsive is quantity supplied or demanded to a change in price" (stated as a ratio of percentage changes)?
To most of us, the opposite relationship, ie, how prices change when there is a supply shortfall or a jump in demand, matters more...but the reciprocal elasticity relationship is valid, I think.
Here's a Wiki ref, if this gabble interests any of you:
Elasticity (economics) - Wikipedia, the free encyclopedia

BOB

 

[Herkypilot]

Profit and profit margin are not the same thing. That which our politicians demagogue and threaten with "windfall" profits taxes has continued to make a steady 9% profit margin for about 30 years. Exxon-Mobile may be the largest oil company in the US, but they are in like 20th place world wide when you compare them to Saudis or Chinese. They produce about 3% of the oil consumed world wide and handle about 5%. That means they buy the 2% more on the open market, paying the $100 a barrel crude prices you hear about on TV.

By the way, if you have a 401K that makes any money at all, it is *VERY* likely due to this 9% profit margin. The largest investors in Exxon-Mobile? The teachers union and fire/police union retirement funds. Why? Cuz they continue to make money.

I know the difference. I'm not a "tax'em Democrat" I'm referring more from the consumer side of this - I just don't like to get gouged on pumped up prices that have been manipulated. You want to read something really disgusting, read this: The Global Oil Scam: 50 Times Bigger than Madoff - Seeking Alpha Then talk to me about how the poor oil companies aren't part of the problem.

 

[Diamondpilot]

I dont like paying for it either but this country was built on free enterprise. If the oil companies can make a profit so be it. They are in business to make money just like everyone else. They charge what the market will bear.

Profit margins are just that. People want to complain about xyz company making 10% profit. It is what it is. I personally try to make all the profit I can also. Banks, oil companies, hospitals, ect charge what they can and who can blame them, you would also if you had the ability.

Chris

 

[countryboycansurvive]

When I see people griping about the cost of fossil fuels my first instinct is to say "quit buying it". I wish I could run my truck-tractor-boat-dozer on water, but it ain't happening. Even at $4.00/gal diesel is a no brainer. Beats the **** out of an axe and grub hoe.

 

[rsewill]

I dont like paying for it either but this country was built on free enterprise. If the oil companies can make a profit so be it. They are in business to make money just like everyone else. They charge what the market will bear.

Profit margins are just that. People want to complain about xyz company making 10% profit. It is what it is. I personally try to make all the profit I can also. Banks, oil companies, hospitals, ect charge what they can and who can blame them, you would also if you had the ability.

Chris

Except that the seven sisters are now the four sisters. And look at the money the pipeline companies make as regulated monopolies.

 

[Redneck in training]

One of the largest refineries on the world will shut down citing low demand for fuel. So why are the prices for gas and diesel going up?Hovensa LLC to shut Virgin Islands oil refinery - Toledo Blade

 

[chopped]

However, as we say with the phone company nreakup years ago.......(if you remember) When the 'product' becomes something so 'big' that the ecomomy depends on it to stay stable then it needs to have some sort of regulation .Its that simple..fuel costs go up.....we pay more...
With this in mind its easy to see why alternative energy hasnt taken off.. Witht he demise of the oil companies everything would fall apart..

 

[Baby Grand]

One of the largest refineries on the world will shut down citing low demand for fuel. So why are the prices for gas and diesel going up?Hovensa LLC to shut Virgin Islands oil refinery - Toledo Blade

So why are the prices for gas and diesel going up?

Because the value of the money you trade for it is going down?
If demand is stable, and supply is adequate, then this would be my guess.

 

[devildog1]

Hum,
interesting thread about the ups and downs of fuel prices. Diesel here in upstate N.Y. is at $4.10 per gal, but along with that I just had around 179 gallons of home heating oil @ $3.78 per gal= $676.34. Now that is just unjust, you think someones making a profit with those prices?
DevilDog