A question: Would Oil Companies have the power to influence price per bbl?

[kentuck]

of oil? Or are they totally independent from the pricing mechanisms of the oil market? Do they have any control over what the foreign oil producers charge per barrel and would they benefit from such collusion? But they would never do anything like that, would they?

[Democrats_win]

1. Enron taught them how to make Aunt Millie pay way over market price.

[MacDuff]

2. Supply & Demand

set the price - what is happening now is increased demand (especially in China - but really everywhere) has outpaced production (world crude production has either peaked or plateaued) - so there is now more demand than supply - which drives the price up - add to that fears of a US attack on Iran, Nigerian rebels threatening one of the biggest sources of Light Sweet crude and Venezuela's threats to nationalize their oil - and those who purchase oil are even more nervous about supply

US gas prices are further exacerbated by the still-not-online refineries in the Gulf, the switch to ethanol, and decreasing stock of light sweet crude in refineries (heavier, more sour crude requires more equipment and greater expense to "crack" into the various grades of fuel)

remember, if Exxon Mobile tried to drive the price up on it's own, BP Shell etc. would simply undersell them by 5-10 cents/gallon - and make a killing (or even MORE of a killing I should say) - and EM would have to drop their price or face having their fuel sitting around (and having to sell it behind the scenes to the other sellers at the lower price)

[Coastie for Truth]

3. But - they could play the crude futures market

[kentuck]

4. So BP and Exxon would not collude ?

But I've read that this is not about supply...?

[MacDuff]

5. of COURSE they are telling you

it isn't about supply - so you and every other American won't change their way of living! the LAST thing oil companies want you to do is get a plug-in hybrid, start riding a bike, and living close to work....

if you look at world production figures for all liquids - (crude and distillates) - they have been basically flat for a year - demand however has increased - what does that imply?

Saudi Arabia for example claims to have much greater ability to supply, and yet, with oil trading at an all-time high, they aren't delivering any more - why? because they are pumping flat out - AND they are buying/renting rigs to drill more wells - this takes time plus if you have a 16oz soda and you and your loved one each have a straw and are sharing - what happens if you put a few more straws in and invite friends to drink away? does the 16oz soda get bigger? or do you just suck it out of the glass faster?

The worlds 4 largest oil fields are mature and (of the 3 we know about) in decline (meaning the amount of oil being pumped is decreasing - despite using advanced drilling & recovery techniques ) - these are in order of size: Ghawar (Saudi Arabia), Cantarell (Mexico) Burgan (Kuwait), and the North Sea (EU)
other than Ghawar (which SA won't tell us about - but we KNOW they are pumping sea water in at a massive rate - which speeds things up for a short time, but ruins the field quickly) - these fields have rapidly declining production rates - and the world hasn't found a field of similar size in a very long time

The world is peaking in oil production, demand is up, in the US right at the same time, there are some bottlenecks to gasoline production (MTBE/ethanol switch - Gulf refineries still down from Katrina last year) - so the price is up - it's still cheap, and one day you will look back on $3.00/gallon gas one day with fondness and longing....

[MacDuff]

6. as for collusion...

if the price didn't reflect world oil prices (and if you look up a graph, gas prices as a reflection oil prices are nearly an exact match) I suppose they could

OR

BP could undersell E/M by 20 cents a gallon, and outsell E/M every day - at these prices people would line up and drive out of their way for a savings of 20 cents/gallon - and BP would make a killing - so why collude? these companies compete, they don't work together

LOOK at world oil prices - they are at an all-time high - couldn't that (plus production bottlenecks for gasoline) be a better explanation of gasoline costs then some sort of Dr Evil plot of world domination by the oil companies?

[kentuck]

7. Has consumption gone down with the higher prices ?

Do we have any figures on that?