Bruzilla said:
Sorry, but some group is calling the shots. I refuse to believe that the fact that an imminent threat of government action, however misguided it may be, stopped and reversed lengthy trends of price increases is just some coincidence.
I agree that windfall taxes do nothing to help consumers, but they sure seem to scare the pants off the oil companies. Rush was saying last week that these taxes would result in higher gas prices as the oil companies would hold back supplies until the taxes went away. But I'm thinking that the oil companies, especially their leadership, are very focused on profits and price per share of their stock. Windfall taxes, and restricting sales, would be very damaging to their stock value and their personal net worth, so they have now twice been able to get gas/oil prices down after months of saying "there's nothing we can do."
As for some vast conspiracy, I think that's about all OPEC and the oil companies are. They know we have to buy their product since there's no substitute, so they are free to do whatever they want. How many other businesses in the US are free to charge "market value" for a product regardless of its source? Locally produced electricity costs less than electricity bought and moved to the local area; a bottle of Californa white wine is cheaper than authentic French champagne; cigars rolled in Tampa are a lot cheaper than genuine Cubans; locally grown produce costs less than stuff brough in from far away; etc, etc. If oil were treated like everything else, you would see gas much cheaper at stations that use domestic oil, a but higher stations that use non-threatened oil (Venezuela, Great Britain, etc.) and much higher prices at stations that rely on Middle Eastern oil due to shipping costs and risk to sources. Yet we allow oil companies to charge us the same amount regardless of the source, cost, or risk. If we don't tolerate that kind of pricing from anyone else, why should we tolerate it from them?
That wouldn't work for a second. Oil pumped here and there does not significantly change the price unless it is different quality like Iranian Sour, Basra Sweet, Nigerian Light Sweet, West Texas, etc (different sulfur contents and refining capabilities). If you broke up all of the integrated oil companies into their component parts or little entitites that only do business in say, west Texas, or another company that does business in Saudi oil, or Nigerian oil, etc, the price would be far far higher than it is today. Each company would need its own set of drilling rigs, transportation details (pipelines, tankers, trucks), refineries, etc, etc. Oil procurement is a biz that requires tremendous investment, and that's why you hear about this 9 cent/gallon profit margin blah blah. No one ever says that to get that $11 billion in profit, the largest in US corporate history, Exxon had to invest over $100 billion in research/development/capital ex spending, which is also the largest amount spent in US corporate history. Companies like Exxon-Mobil don't even bother with oil fields that are less than 50,000,000 barrels (=2 days of US consumption, 8 days of world consumption) because the cost of building rigs, getting people in place, transporting it out of there, and everything else isn't even worth their time. Smaller companies are popping up that are specialized in recovery for these small finds, but it remains to be seen if they can make a go of it (no evidence thus far, although with oil prices at $70 it probably makes some of it feasible).
Saying that oil companies can bring the price of oil down on an open market without providing an explanation or evidence isn't helping me out in rationalizing your argument.
The thing is when you say that someone is calling the shots, the fact is that we are calling the shots. Each and every time an H2, Suburban, F-250 with a spoiler on the back, Armada, Excursion, Expedition, Escalade, etc, pulls up to the pump we are calling the shots with our dollars telling those oil entities to bring it on.
And, why would gas at stations who's source is domestic/stable be cheaper? If everyone ran to those stations and bought there, the price would go up, and everyone would say screw those Saudis, I'm not buying their oil, and the price there would go down, and eventually the price would be about equal across the board.
