Re: Gas Prices

John in detroit wrote:
David J. Hughes wrote:

It's called market forces.
If a company can sell it's oil at $75 per barrel, they will.
In fact, they must, or they are defrauding thier stockholders.


This I know, However you are talking about only a small fraction of the oil imported to the US, most of our oil comes from Canada and it is less expensive both in price at the wellhead and shipping costs. (Most in this case means well over 50%) but the price we pay at the pump reflects the cost of OPEC crude, not Canadian even if the oil I'm burning came from Windsor via the port of Detroit. The oil companies also claim that storm damage to the southern refineries has raised the price of gas. However the oil I burn was refined right here in Detroit.

In short, it's all excuses and lies


You do not understand how the market works.
Think of oil as gold.
Light sweet crude is 24 carat
Heavy sweet crude is 22 carat
Light sour crude is 20 carat
Heavy sour crude is 18 carat

It doesn't matter where in the world the gold comes from, the market price is the market price.
The same quality of oil from Canada, Iran, Nigeria, Kashastan, Texas or Nigeria has the same market price. Shipping costs are a very small part of the cost, the cost of production doesn't matter so long as they still make a profit.
Even if a public held company could sell oil at $14, if the market price is $75, they MUST sell it at that price (even to themselves), or the directors of the company WILL go to prison.
Nationally owned companies, such as those in Iran, can sell it at any price they want. So Iran sells it to the world at $75, but sells it to itself at $5, allowing the people in Iran to pay $0.15 per gallon.

The storm damage in LA means that gas refined in Michigan is being shipped to MI, OH, IO, PA etc., which previously got gas from LA via a huge pipeline network.

It's a global market, now
It's a global market, now
It's a global market, now
So you pay, pay more


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