Oil Prices Tumble in Biggest Weekly Drop Ever
July 19th, 2008 . by TexasFredNEW YORK — The price of oil recorded its biggest weekly drop ever, and a gallon of gas finally pulled back from its record high. So is it time to declare the energy bubble popped?
Experts won’t go that far just yet.
“It’s too early to say we’ve seen the worst of it,” said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. “We would be Pollyannish if we believe one week represents a trend.”
Still, with oil recording yet another drop on Friday, some industry experts who just days ago thought there was more juice left in oil’s meteoric run are reconsidering.
“If this is not the bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary. “Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view.”
Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange — well below its trading record of more than $147 a week earlier.
Full Story Here:
Oil Prices Tumble in Biggest Weekly Drop Ever
OK, oil goes UP and the pump price of gas and diesel goes up several cents per gallon. And that increase is almost immediate.
Oil goes DOWN, in a huge way, and the price at the pump remains stable.
Don’t even think about defending the damned BIG OIL companies, their un-Godly price gouging, their unbelievable profits and the screwing these SOBs are giving the American consumer.
I have posted here in the past that I was NOT at all convinced that the oil companies were on the up and up with their pricing and profits reports. I had a couple of folks take the oil companies side. They tried to defend the exorbitant profits that the oil companies make. They tried to explain to me how *profit* works, like I have never done business before.
Profit is just that, profit. The money you have left after covering ALL operating costs, expenditures, outlay for equipment, ALL costs, and what’s left is PROFIT. And anyone that says it’s not doesn’t know their ass from 3rd base about business.
The oil companies are screwing our asses off, we are the ones that are getting the very slick end of the stick, and anyone that can’t see this for what it is has got to be too stupid to breathe, it’s suppose it’s a good thing that breathing is a reflex action, otherwise there would be a lot of so-called business dumbasses falling over dead.
Yes, we CAN drill our way out of this mess, but even if we produce more oil than ANY nation on earth, if the damned oil companies continue to rape us, what’s the point? We’re going to go broke and the oil companies just keep on making BILLIONS of dollars in PROFITS!
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Could be Fred..but profit margins are set based on capital investment and no matter how many billions they make if it is only 8 percent of investment it not an excessive profit. If all of the gasoline made by the refiners came from oil they produced then I would say they are gouging..but to ask them to spend the billions to buy the crude and millions more to get it to the refineries on anything less than eight percent (which is what they claim they make) sounds kinda like socialism, huh?
The market place is working..and as crude prices go down so will the cost of fuel..unless there is a refining shortage..it will take some weeks for it to reflect at the pump but it will come down.
I’ve got to take the flip side on this one Fred. I can’t see an 8% net profit as exorbitant, especially considering the investment involved. If you’ve run businesses on less more power to ya, I always wanted 10-25% myself, guess i was just greedy. Wal-Mart runs on about 10% so I guess they’re greedy too.
the American people have gone out of their way to create this problem by electing idiots into office like Pelosi and her ilk. and our US oil companies, which have shrunk to near non-existence as compared to the world market have had to dance to their tune, pretty soon American oil companies will be a thing of the past, then what will you be paying for oil? when Arabs not only control the production, but the refining and distribution here too? and, If you think the 8% Exxon is taking is too much, why do you not complain about the taxes that are three times that much?
Yeah, OK, I am NOT going to argue with either of you… It’s just NOT worth the effort…
GUYK,
Fred kinda sounds like he thinks you’re hard headed!
Mark, I meant you too and a hard head has very little to do with it…
This is one time that if I say what I am thinking I will likely lose 2 people I really don’t want to lose, over the definition of profit and business practices, and it’s just not worth it…
Please don’t push further…
I’m not pushin your buttons Fred, I just think that upside of the problems of our foolish government, our apathetic electorate that gives our foolish government too much power, our needless dependence on foreign sources of oil, sources hostile to us, no less. the problems with business are small. it does have it’s problems, the largest being the aforementioned apathy. apathetic shareholders give too much power to board members, who vote themselves ridiculous pay, perks, and severance/retirement packages. but upside of waste in government, the waste in business is like a drop in a bucket.
the other point is if we push OUR oil companies out of business, (and we ARE doing that) do you think the alternative will be better? should we outsource our refining and distribution to china? russia? Saudi? I don’t think so.
The oil companies are making billions on just 8 or 9 percent per gallon, so, what’s the government making on their 15 percent per gallon?
Of course we can drill our way out of this and in the mean time develop both wind and nuclear power. Developing the venues to allow electricity to do what many people use gas and heating oil for will alleviate much of the need for oil for home use, thus driving down the price.
What I can’t figure if this? When oil prices were $50 per barrel, we were paying around $2.50 per gallon. So, reasonable thinking would dictate that when oil got to $100 per barrel, we should be paying $5.00 per gallon and about $6.50 per gallon when oil got to $130.00 per barrel. But, it didn’t happen that way. If the oil companies and government are making billions off oil which is selling for $130 per barrel with gas at $4.00 per gallon, just think what they were making when oil was under $100 per barrel.
Given the way ‘all business’ (Take the money and run) operates world wide I don’t see how anyone can defend the profits that are routinely made by big oil. And how they need those profits for the ‘lean years’. I don’t remember ‘big oil’ ever having a ‘lean year’. You can rationalize anything, but that doesn’t make it true.
Yeah I know all about the profit margin and how it only ‘looks’ like price gouging. I also know that you can seldom if ever get to so called ‘experts’ in economics to agree on anything.
I am well aware of the government taxes, and I know what that does to the prices, if ANY of you had paid attention to ANYTHING that has EVER been written is this POS blog you’d know that, and you’d know that I have NO use for our government in it’s current structure…
PAY ATTENTION to the #2 part of the below definition…
And pay real close attention to THIS:
I don’t make this shit up, I use facts and sources, I don’t see one qualifier anywhere in this definition that says a word about PROFIT the way some of you seem to interpret it.
If you want to kiss BIG OIL’s ass, and give them a free ride, great, I don’t care!
But here’s the deal, BIG OIL is as complicit in the RAPE of the American consumer and is ANY OPEC nation or the tax structure of the USA…
If you don’t agree with this definition *2. the monetary surplus left to a producer or employer after deducting wages, rent, cost of raw materials, etc.: The company works on a small margin of profit.”, take it up with Dictionary.com, Funk and Wagnalls, Noah Webster and the like..
Who knows, you might be a lot smarter than they are…
If you guys want to blather away, go ahead, I am done with this, I refuse to have a battle of wits with people that can’t or won’t accept the commonly accepted definition of words…
EDIT: How damned appropriate, don’t even TRY to say the oil companies aren’t gouging the shit out of us…
Houston executive pay packages swell by over 30% Chron.com - Houston Chronicle
We have the most corrupt government and business leaders imaginable, it’s NOT just one segment of ANY of them, it’s the whole stinking lot of em…
EDIT TO ADD: But WTF do I know?? Exxon Mobil Corp - Company Financial Statements - MSN Money
Basti, and you my friend, hit it squarely on the head with this: *I don’t remember ‘big oil’ ever having a ‘lean year’. You can rationalize anything, but that doesn’t make it true.*…
A free market can not work when a product “is” a needed commodity the economy can not operate without and that very product is controlled by few.
A perfect example of the gouging is the price of diesel fuel which DOES NOT COST AS MUCH TO REFINE.
Back in the 70’s when regular gas was .50 per/gal, diesel was half that at .25 cents per/gal.
Last year here were the prices of all three grades of gasoline and the price of diesel:
Premium gas: $3.79 per/gal
Plus gas $3.65 per/gal
Regular gas $3.52 per/gal
Diesel fuel $3.59 per/gal
Notice how diesel is in the middle of the price range just below the cost of Plus gasoline.
Today:
Premium gas: $4.16 per/gal
Plus gas $4.04 per/gal
Regular gas $3.92 per/gal
Diesel fuel $4.79 per/gal
Why a year later is diesel fuel .50 - .60 higher than PREMIUM gasoline when it DOES NOT COST AS MUCH TO REFINE.
That right there is cold hard proof they are gouging, and yet they are allowed to continue to do so.
Exactly right Top Gun…
Look folks, I don’t have ANYTHING against a business making a PROFIT, that’s what business is all about…
My problem is the definition that some people try to apply to the word PROFIT… Don’t feed me a shit sandwich and tell me it’s peanut butter..
And anyone that can’t see the OIL companies are gouging us, as well as our own government gouging us, is as screwed up as a shit house mouse…
[...] Oil Prices Tumble In Biggest Weekly Drop Ever - Texas Fred [...]
Oil companies are pushing as hard as the market will bear. If WE BEAR IT, they will CONTINUE TO PUSH.
How the fuck is it that we don’t UNDERSTAND this? And here is THE difference, and why THIS product (like, for example, ELECTRICITY) is different from most any other product: you essentially CANNOT DO WITHOUT IT. The SAME can be said for electricity. And Forbes.com says (as I wrote a few weeks prior): expect coming national brownouts and blackouts.
What other two products can entirely KILL this economy and this country in the shortest amount of time?
We could regulate railroads, we could regulate airlines. But we won’t do much to interfere with the product that could bring this entire country via ALL forms of transportation, production, lubrication, industry to damned near an immediate halt?
But the overarching question: HOW MUCH and in WHAT FASHION do we condone government interference and regulation? And, considering the current state of our FEDERAL and collective STATE governments, how MOTIVATED ARE THEY to truly DRILL and BUILD and CUT?
BZ
Please don’t take my cynicism personally, I’m as frustrated about high energy costs as anyone, they are really crimping my budget of late. But howabout some suggestions as to solutions? yeah, Maxine Waters and Nancy Pelosi are sure they could import, refine, and distribute fuels better and cheaper than the oil companies, hence their talk of nationalizing the oil industry here. let’s see, yeah, government has a nice long history of being more efficient than private business right? and Pelosi, Reid, and company have really shown how eager they are to drill and produce here in the US right? yeah….I’ll bet we could be completely off of foreign oil in a year or so if Pelosi was in charge… and consider this, the US electorate votes for these people, so obviously these representatives are truly making their constituents happy, or they wouldn’t be there, right? so, it is obvious the American people do not want oil companies to drill here, hell, not even in a barren wasteland in northern Alaska, Alaskans being the ONLY Americans to consistently vote for and lobby for drilling in their neighborhood. American oil companies used to be the major players in the business worldwide, now thanks mainly to government interference they only make up about 8% of the world oil market and as such, have almost no influence on oil prices anymore. should we saddle them with a windfall profits tax in order to drive all investment in them away? and further shrink their size in the world market? do you really think this will help your energy costs? when the only players in the oil business are Hugo Chavez, King Abdullah, Vladimir Putin (yeah, he’s still in charge over there) and maybe British Petroleum as a minor player? we, that is US AMERICANS have already outsourced nearly all of our oil production, do you think that was a good idea? such a good idea that you want to outsource all the refining and distribution here too? frankly, I think outsourcing our production and becoming dependent on the middle east was a terrible idea, it was then, in the ’70s, and it is even more today. and it seems to me we are paying for our foolishness here and now. we have to take back that production to ourselves, produce HERE and let the arabs keep their shit.
I’m all open for suggestions, and once again, PLEASE don’t take this as any personal jibe, I really want to hear about solutions that will work.
You want serious solutions and then launch on a tirade such as this?? We have solutions, and NONE of em are the silly bullshit you just wrote…
The 1st thing that has to be done is realize this, I asked you to NOT push this, but WTF did you do?? You kept on…
Like it or not, I really don’t give a damn, I defined profit, that was your big bitch, the definition of PROFIT, we will agree to disagree…
Solutions?? Come at me with out the silly bullshit and we may very well find out we ARE on the same page basically, and we may well know exactly what needs to be done, but lets face facts, who the fuck is gonna listen?
CONSUMERS??? C’mon TexasFred - that’s just PC talk. We’re not CONSUMERS, we’re CITIZENS. Anyway, absolutely love your blog - I read it everyday for a true common-sense take on current events. Shoot straight, and keep up the good work!
Gasoline prices have dropped locally by as much as 15 cents per gallon in just the last couple of days..and if the crude prices keep falling I expect to see the gasoline prices fall..and the oil companies profit margin will remain the same although their gross receipts and net will be less..