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 Replies: 90 / Views: 7,584 |
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Bedrock of the Community
13014 Posts |
Quote:
In other words for the "pennies on the gallon" statement to be true Exxon would have had to sell more fuel in the first quarter, by itself, than was actually sold in the entire year by all the oil companies combined. Youre assuming the only way they make money is the sale of a gallon of gas at the pump which just isn't true. In 08 natural gas was still very profitable, they also buy and sell wells all the time, strike deals with new companies ect. Gas isn't their only money maker. Exxon for example is in 100 plus countries around the world, they make a ton of money internationally in fact probably more over seas with less regulations on the type of gas it can be. Want to see gas drop $1+ tell the government to stop requiring them to have 56 different blends nation wide depending on season and location. Its a lot like PMs in the sense when it comes out of the ground its not that expensive yet but theres a lot of things that have to be done to it before it can be used. Imagine if the Mint has to make different silver blanks for an ASE depending on where you lived or what time of year it was. Everyone was ordering the exact same thing a 1 oz ASE but instead of making 1 blank they could strike them all on, different blanks had to be created. Same product but you just probably doubled production cost for no real reason. Thats what you see in oil Quote:
Oil profits are world wide. The US is just, far and away, the largest user. doesn't mean its the most profitable. The US has countless regulations for what they have to do with it and where it can go driving the price up. Over seas in most countries the most minimal of refinements can send it right to the pump which is far more profitable then having to ship it to specific locations and only being able to use that blend till the season changes ect. The more you regulate something the more expensive it is. The only thing more regulated than gas and oil is nuclear power. Theres 42 gallons in a standard oil barrel. Gallon of oil = a gallon of gas. At 92 dollars a barrel youre already starting with a base price of 2.04 from the oil price alone. Add in 18.5 cents for federal tax youre at 2.23. State Tax will be 30-51 cents which puts you anywhere from 2.53 to 2.74 cents a gallon and you havent even dont a single thing yet other then you have a gallon of oil. The price is basically 3 bucks without even refining it, shipping it, storing it, making the proper blend ect. No one makes more on a gallon than the US Government Edited by basebal21
10/02/2012 11:23 am
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Pillar of the Community
United States
808 Posts |
 angel is 100% correct. Not everyone is getting rich in the oil business. Lets break this down: Gas stations typically don't survive on sales of gasoline alone. Little to no profit on fuel sales. The refiners have a tough time since they only make good money when the crack spread is favorable. The pipelines take their cut and make out okay, but they're not earning the big bucks. Big oil upstream operations (exploration and extraction) is where the big money is made. There's a reason why XOM is the second highest valued corporation on the planet. EDIT: Incidentally, XOM made the decision to begin divesting themselves of retail operations years ago. Why? Lack of profitability was was hurting their otherwise outstanding bottom line. Most Exxon and Mobil stations are independent licensees of their respective brand(s). Edited by coinwatch
10/02/2012 12:37 pm
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Pillar of the Community
United States
2168 Posts |
Yes pennies on the gallon just like back in the 60s when gas was very very cheap. The family owned a delivery company for heating oil as well as gas and made 2 cents per gallon. Now just pennies still so stations and home or municipal delivery not much profit
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Bedrock of the Community
13014 Posts |
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Big oil upstream operations (exploration and extraction) is where the big money is made. There's a reason why XOM is the second highest valued corporation on the planet. Agreed, but its from massive volume not price gouging on their part. With the exception of the government everyone just makes a small per gallon profit per gallon. McDonalds and 7-11 were some of the first companies to figure out you can make a good amount of money and save yourself a lot of hassle by just selling your brand and not running day to day operations in stores. But with gas the only one making big per gallon profits is the government. Again Quote:
Theres 42 gallons in a standard oil barrel. Gallon of oil = a gallon of gas. At 92 dollars a barrel youre already starting with a base price of 2.04 from the oil price alone. Add in 18.5 cents for federal tax youre at 2.23. State Tax will be 30-51 cents which puts you anywhere from 2.53 to 2.74 cents a gallon and you havent even dont a single thing yet other then you have a gallon of oil. The price is basically 3 bucks without even refining it, shipping it, storing it, making the proper blend ect. No one makes more on a gallon than the US Government Its also important to remember that because oils selling for 94-95 a barrel oil companies arent selling it for that speculators are. Theyll buy massive amounts and sit on it and sell when the price goes up. |
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Pillar of the Community
United States
4008 Posts |
Would be happy to respond to any and all political comments directed my way but am having an attack of PM Subjectitis.  |
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Pillar of the Community
United States
1590 Posts |
Ummm..you all are forgetting one convenient fact..I already mentioned the statement that the Exxon CEO made regarding how 40 to 50 percent of the price of a gallon of gas is from speculation. You act like that paper oil is actually physically delivered. As I recall only about 5% of all Futures contracts are actually physically delivered. And even less for Oil.
Like Ed, I'm tired of this whole thing. As a Retired Detective I'm trained to look past the smoke and mirrors,and use common sense. Taking money from one pocket and putting it in another still leaves the same net amount no matter how you play with the figures.
On my desk I had a plaque made; it read "Perception and desire will destroy truth and reality every time".
And so it has.
It's been fun, but lets get back to Silver.
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Bedrock of the Community
13014 Posts |
Its all the same really. Both sit at a higher price than they should from paper trading. If you buy a commodity physical delivery should have to happen. Whether it be oil to a supply depot or silver to your house or bank some form of physical movement should have to happen which would cause them to sit far closer to their natural prices. Youd probably shave 5-10 dollars off silver just requiring delivery of those paper trades
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Valued Member
 United States
141 Posts |
If delivery was necessary for all the paper trading of silver, and it forced every ounce of silver to be delivered to some residence or from one place to another upon purchasing...
-the price as we know it would be different, probably by a few dollars, having to throw shipping fee's into it and what not
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Pillar of the Community
United States
511 Posts |
I expected silver to rise after labor Day, but it has happened faster and at a greater rate than I expected. Spot will exceed $40 sometime before the end of the year.
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Valued Member
United States
141 Posts |
possibly, maybe even faster than that.
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Bedrock of the Community
13014 Posts |
Quote:
-the price as we know it would be different, probably by a few dollars, having to throw shipping fee's into it and what not
Shipping alone should drive it down a few dollars on its own, then having to actually put effort into sell it should add a few more dollars |
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Valued Member
United States
141 Posts |
So when I originally posted, on september first, the price was $,31.74, however we saw strides to 35$, and now on october 17th we are down to $33.15
Whats going on?
Why the sudden raise? why the drastic increase from 27 dollars to 35 within about 2 monthes, and now a drop. Any speculation?
And Whats your opinion? Does it keep going down?
-my opinion, is that it is heading into the toilet, which may be in the high twenties, sadly :( I hope I'm wrong
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Pillar of the Community
United States
1590 Posts |
From a fundamental standpoint, supply and demand, we are heading for lower prices. From a Technical viewpoint we are heading for a large crash. From a "Silver will always go up" viewpoint we are in a correction before we go to $100/oz From a "store of wealth" viewpoint...you got me. I have read several articles and opinions saying we are in "Bizzaro" economics right now. Where everything is going exactly opposite of what should be happening. In other words people are chase prices constantly higher...and then losing their shirts when the prices crash. They are buying high and losing money. WAG...we will see a see saw in a sideways range and then at the end of the quarter when the books have to be balanced we will see a fair sized drop. But who knows..it might die tomorrow. All I really know is Silver will come down below $20 at some point. There are already lots of people talking about "historical levels" and admitting that the fear that props up the market will have to go away some time...today...tomorrow....next year.....5 years from now....  ..sometime |
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Valued Member
United States
141 Posts |
silver below 20?   hopefully that never happens. I'm still one of those believer that that think we will eventually see 50 dollar silver again, sooner rather than later, with maybe a year or 2 |
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Pillar of the Community
United States
1590 Posts |
Just my opinion but I am pretty sure we will never see sustained levels of silver over $40 ever; over $30 for very long (measured in months); and over $20, as measured in years.
My reasoning is that at some point Corporate America....or Corporate China is going to say...."Hey! I need CHEAP Silver for my Electonics and Solar technologies...I have to have price points where I can sell at volume and make a profit"
People tend to point out that Silver has industrial applications and hence has value in that regard; as a way of showing that it "won't crash/has value/is needed ect" and will "alway rise". But just the opposite is also true. Make something so expensive it is not practical to use and you have demand destruction. Eventually the big boys that really control the market will shift to a new stratagy or will need the silver for their other business's and the price will come down.
It has been accepted for a long time that the big boys set the prices and we all chase along trying to make a profit on their manipulations. It is all timing, nothing more, and nothing less.
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Posted 10/02/2012 12:28 pm
