Do the words supply and demand ring a bell?
The world output of oil is about 85,000,000 barrels a day, the world demand is about 87,000,000 barrels. Much of that demand comes from countries other than the US, namely China. Surprise, it is not all about America. While speculators and traders play a role and the value of the US dollar against the Euro is a major factor, the driver is demand.
Notice I didn’t mention the big bad oil companies. I didn’t, but our politicians sure do. Clinton is going to take their profit and use it elsewhere; Obama has similar plans, so clearly profit is bad. The profit margin for Exxon is less than 10% so one can assume that any business earning 10% or more should have its profit confiscated by the Federal government. Do you buy into that thinking?;)
And as an aside, what percentage of the total world output of oil do you think is controlled by Exxon? Give up? It’s 2% so it seems obvious with that corner on the market they surely control the price of oil worldwide. Consider too that many countries own national oil companies and many, especially in the Middle East subsidize the cost of gasoline for their citizens further distorting the market.
In the last quarter Exxon earned $11 billion so that means that the Federal government collected about $5.9 billion in taxes. So perhaps profit is a good thing after all.
Representative Maxine Waters while grilling oil company executives made a statement to the effect that as a liberal she was going to try and have the government take over the oil companies and nationalize them. Such pandering, grandstanding and ignorance is an insult to the American people, especially considering that Ms Waters was named in 2005 and 2006] as one of the "most corrupt" members of congress by Citizens for Responsibility and Ethics in Washington.
![Mad :mad:](./images/smilies/icon_mad.gif)
What’s the point of all this? Well, it would appear that you can place more trust in an oil company than in the people you elect to represent you in Congress. Who would have thunk it? :rolleyes: