Posted on 09/08/2005 7:01:08 AM PDT by cogitator
Gov Murkowski instructed Alaska oil producers to ramp up production to help meet the shortfall due to Katrina. BP and Conoco responded that they can't ramp up since they are already producing at max.
Geeze! You're probably the kind of person that looked at the pictures of people in New Orleans grabbing tennis shoes, DVD's and TV from Walmart but didn't intuit they were desparately hungry/thirsty survivors only trying to survive!
*That's* the key & what I'm wagering's being aggressively pursued.
If such pattern(s) are demonstratively established & revealed?
All hell should break out, and rightly so.
The SEC has cause to get involved at any time, now.
A lot of futures investors -- *mostly* all small fries -- undoubtedly stand to loose everything but the shirts on their backs in one fell swoop to out & out *fraud*.
Has the potential of making Enron *&* the S&L scandals, combined, look puny by comparison.
The WH really needs to be watching this unfold.
...like a hawk.
Those income producing refineries belong to them. They're not interested in tossing a monkey wrench into their own works, just OPs. They're also not interested in doing, or supporting anything that will cause a drop in their own income.
If they can't predict for certain what the weather is going to be like tomorrow, I'm not trusting such a heavily politicized issue group to tell us what the weather will be like a hundred years from now.
It's a minor point tangential to this topic, but predicting the weather is a different problem than predicting the climate.
And they aren't. So much for that. You pick one article put out by a commie type organization and claim the media is all over it? I think not.
In any case, return to your delusion, I'm sure it's comfortable there. You seem to spend most of your life in a world of your own design, you also are delusional about being a libertarian.
Oh well, carry on.
Anthropogenic global warming is a hoax. Plain and simple.
Gas goes up right before labor day, because demand is known to increase. Stations raise prices as much as they think they can get away with.
If people would pay $10 a gallon for gas, that is what the stations would (AND SHOULD) charge.
When you go to work, why do you get paid what you do? Why don't you charge your employer half the price? Because you want to make as much money as possible. Why doesn't your employer pay you TWICE as much? Because he wants to spend as little as possible. How did you end up with the salary you have? In a perfect world, it represents exactly the amount of money it takes your employer to keep you from getting a job somewhere else, and not a penny more or less.
In markets for products we "really need", there is the fear that by "colluding" the market can be driven higher, and we will have no choice but to pay the price. If there was no collusion, it is assumed that some supplier would want to grab a bigger market share, and would set a lower price, and then others would follow, so the price should end up at about the level such that you will keep going to the gas station you are going to, and not switch to another -- and not a penny more or less.
But this weekend showed that if the price is raised too high, we CAN cut back on what we use. So even with collusion there is pressure to drop prices back.
When Katrina hit, there was a known and real shortage of gas, mostly because a large amount of supply went from being stored in station tanks, to being stored in people's cars.
So the price SHOT UP. Which lowered demand, which resolved the supply crisis.
Prices always come down more slowly, because consumers, even when spooked to NOT BUY because of a rapid rise, will tend to purchase at a HIGH price if that price is lower than before.
It is the same reason that clearance items often start at 10% off, and then get higher discounts. Pick off the higher-paying customers first, and then lower some more. You'd be a fool to drop your price so much that you sold out your gas supply.
Each gas station does their own curve, determining how many people would show up at each price, and sets the price to maximize the profit to the station (taking into account the fixed costs as well)
BTW, I agree that the memos themselves don't say what the report suggests. FOr example, the Mobil memo says they should buy the Powerine refinery output, but that isn't to make it dissappear, but rather to help their own profit margin since they will be getting gas at a lower cost to be resold to retailers.
OK... I've been hearing this line of thinking for several years now. I've never put much stock in it, because, most people I've known in the refining business have been complaining for years about how they "just can't make money". Now, even my wife is thinking the refineries are "holding back production to drive up prices." :-(
So, I read these memos with an open mind; expecting to see some "smoking guns" proving that Big Oil was colluding to rip off the masses. What did I find? Refining executives strategizing INTERNALLY about ways to maintain 1- 5 CENTS PER GALLON profit! Think about what we were paying for gas in 1996. If the refineries were making 1-5 cents, were THEY really the one ripping everyone off? How about the $38.5 cents the Feds have been taking?
In all of these memos, these guys seem to be STRUGGLING to find ways to maintain their very meager profit. Wow.. what a scandal.
And, if you think they're holding back production NOW, when prices are at an all time high... well, you just don't understand these businesses very well. I assure you, they're working OVERTIME trying to make EVERY gallon they can while the 'gettins good'.
It's gonna take more than these memos to convince me that competition is not working well for the benefit of the American people when it comes to gas pricing.
I agree that the memos cited in the article above do not support the conclusion. I also agree that demand goes up during the summer. But a few weeks before the hurricane, gasoline started going up dramatically. Not a few cents per gallon.
There may be a reasonable explanation. I don't think the usual summer increase entirely explains it. And I am talking about pre-Katrina, so the effects of the hurricane cannot be used as the reason.
You need to read the linked article in post 91.
It was done by the oil companies themselves, yes, it's true.
Part of the study (partially sponsored by big auto) was to help determine "Fleet Average MPG" so production (of gasoline) could be "managed".
They'd be justified in doing so in my opinion. This is at least collusion, and at most massive fraud and super-grand theft.
The natural response of Republicans should be to put the three CEO's into a pit and let wild dogs kill them slowly.
Milton Friedman alluded to such situations over 30 years ago. The most seemingly altruistic regulations are most often promoted by big companies seeking to keep out competition. Just look at how the big tobacco companies are using their settlement with govt's to shut down smaller competitors.
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