I just listened to an NPR program broadcast yesterday. Overall I thought
the industry analyst answered many questions vaguely with a little spin.
He did say (big surprise coming) "Gas companies are not philanthropic
organizations".
The single one item that bothers me is that oil companies are making record
profits. I don't know quite how this works, but in my simple mind the oil
companies producing the crude oil and the major gasoline refiners buying the
crude oil are one and the same, or at least they seemed to be named very
similarly.
The report stated that oil companies are bringing crude oil to market at a
cost of $7 - $8 per barrel. Yet it's selling at 10X that amount. An open
market is one thing, but who is bidding on and buying that crude oil for
$75/barrel? Isn't it the gasoline refiners (read oil companies)? *If* they
all bid the price up to buy their own oil at high prices, then worldwide all
buyers (non-oil producers) are forced to buy at high price, wouldn't this be
the case?
So it seems to me at least, that oil companies themselves may be creating
the artifically high selling prices for crude oil in the same way shill
bidding raises the price in an e-bay auction. If they pay a high price for
their own crude oil, it's like taking money from the left pocket and putting
it in the right. Then the wholesale price of gasoline can be 'legitimately'
raised by the refiners (oil companies) because it cost them more for the
oil.
In addition it was stated that several years ago the markup on refining was
$.15/$.20 a gallon and now it's $.50/$.60 a gallon.
Maybe I've got it wrong... but the statements that the oil companies are
merely responding to the market is a shallow sham and rings hollow.
Tom C.
