If we don’t increase the supply of oil - by drilling for more - and increasing refinery capacity - by encouraging private companies to expand refinery capacity - we will guarantee this problem will get worse. Demand for oil is increasing every day throughout the world and the supply cannot keep up with demand. What follows is ECON 101.
Oil companies are doing a fantastic job keeping gas flowing at the pumps. God forbid the government get involved again as in the days of the peanut farmer President.
“The oil industry is stuck in exactly this tight spot. Oil companies are generating record profits — but they don’t have a good place to put those profits back to work. A big share of today’s oil exploration and development capital expenditures are unlikely to earn back a reasonable return on the money invested. The prices paid for today’s assets are too high, the costs of development are rising too fast and the risk that politics will prevent full production in the future is too great. That’s why you see companies across the industry buying back shares or increasing dividends and waiting – hoping, really — that the price of investing in future production growth will fall.”
The thing to do is to pay out big special dividends now. The 15% tax rate on dividends might not last forever. The stockholders who receive these dividends could invest them far more intelligently than oil company executives, who typically only know oil.
The author must be kidding. XOM is trading like an internet stock. XOM has increased its mkt capitalization about $100 billion in the last 60 or so days.
Someone care to explain why oil prices are around $75? Don’t give me the “supply/demand” argument. The OPEC criminal cartel has repeatedly said they want prices lower (they have thrown around $50-60 range more than once) and supposedly adjust production to match their price point.
So, as I have said before, the oil market is being manipulated by factors far beyond supply and demand. The profiteers (and I have no problem in the idea of profit) are manipulating the price. Similar manipulation in the securities markets would get you put in jail...
But I agree - we MUST ramp up our own oil production and refining capacity. We are already so reliant on the rest of the world for so many things our security is already in jeopardy. We MUST take responsibility for our energy reserves. AT $75 a gallon (and Gasoline back near $3) there is NO excuse for us sitting on our butts doing nothing. Libs/enviro-nazi crackheads need to just shut up.