Record profits and soaring gas prices, I dont get it

[Zuuljin]

So I come to the great minds that are the FoH forums to answer how this is possible? I just read this off yahoo's front page: BP and Shell post big profits in era of record oil prices - Yahoo! News

and I wonder... how?

What gets me is this line in the article:

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day

So let me get this straight. They produced roughly the same amount of gas and oil, yet increased profits by 52%? The fuck?

Someone explain this to me. What am I missing here?

[Lejina Bloodbath]

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day

What exacly is hard to understand there?

[Sabolin]

Why are there huge price increases resulting in a huge profit when the price increases should be due to higher costs of drilling/extraction and peak oil theories and doomsday scenarios?

[Tea on tuesday]

Massive surge in demand from India to China to former second world countries plus growing demand in the developed world plus, recently, the sinking of the dollar. Middle Eastern instabilities. Speculation. &c.

There are a lot of reasons, but the basic premise is demand grows while supply remains more or less flat.

[kedwyn]

They make approximately 10%. 10% profits obviously go up as prices go up.


Think about it this way, your gas is taxed at a higher rate than the oil companies profit. If you want to complain about where you money goes check with the government while you are pointing fingers. They have been raping us in taxes from fuel as well.


They also sell more than just gasoline so its not all coming from the pumps and if you rebated all their profits from fuel it really wouldn't make that much of a difference in cost and you would also be standing in line waiting for gas rations since there would be no incentive to bring it to market.

Guess we need to start drilling our own oil and force it to be sold locally. That would at least hold us over a bit while we figure out a commercially viable way to produce hydrogen (nuclear power anyone)

[ziggyholiday]

Because a companies profit is not the same as their profit margin. Supposedly all of the oil company’s profit margins have stayed the same (roughly around 8% I think).

[GrobbeeTrull2.0]

Originally Posted by Zuuljin

So I come to the great minds that are the FoH forums to answer how this is possible? I just read this off yahoo's front page: BP and Shell post big profits in era of record oil prices - Yahoo! News

and I wonder... how?

What gets me is this line in the article:



So let me get this straight. They produced roughly the same amount of gas and oil, yet increased profits by 52%? The fuck?

Someone explain this to me. What am I missing here?

You are missing the fact that we are being gouged. Innovation is dead in this market, and there's no amount of justification left for why the price of gas goes up in America for demand in India and China. More succinctly, they want more and can get it because we have no alternative.

We are trapped, and we will continue to pay it for the most part, because of a lack of large-scale public transit and a lazy culture of people who drive 2 blocks for milk or cigarettes.

[Eomer]

I don't see why this is such a huge fucking mystery to people: we're all paying more for energy because we have no other alternatives and supply is stagnating while demand continues to increase.

Not to sound like a broken record, but welcome to capitalism. If someone has a good, they can sell it for whatever fucking price they want. The reality is that oil companies margins are a teeny tiny fraction of the margins that Intel and Microsoft are rolling in (20-30% or more, while oil companies are typically sub 10%). Why isn't everyone whining that they want price controls on Intel or Microsoft? Those are two companies that have far more monopoly power than ANY oil company (once again, Exxon is the largest and accounts for less than 5% of global supply).

[Ashes Emberblade]

Originally Posted by GrobbeeTrull2.0

Innovation is dead in this market

No, "exploration" is dead, because of environmentalist nutjobs like yourself. No new domestic drilling/refinery capacity = no increase in domestic fuel supply.

[GrobbeeTrull2.0]

Wait a second - since when am I an environmental nutjob? Are you making generalizations based on me being "liberal" again?

[Ashes Emberblade]

Originally Posted by GrobbeeTrull2.0

a lazy culture of people who drive 2 blocks for milk or cigarettes.

Generalizations?

[GrobbeeTrull2.0]

How am I in any way incorrect about the usage of cars in today's society?

[Celebrindal]

Why the fuck am I paying $4 a gallon?

[Burf]

Because you won't walk 2 blocks for milk and smokes.

[Chrisb3]

Originally Posted by Ashes Emberblade

Generalizations?

It's true.

For example there is a town in england where everyone lives 5 minutes away from all the shops, but they refuse do to anything other than drive. It's a status symbol for some reason. They cry for a new road to divert all the traffic passing through, when really they are fucking up their own roads.
There was a TV program where they had this random woman go to a villiage, then a town, then a city to have a "no cars day" to try and get people to see how they can do just as well without cars. She only failed in that weird town.

While everywhere isn't a crazy town in the middle of england, people like that are scattered all over.

Long journies are just as bad as short ones however.
I moved from my house in manchester back home to my hometown not too far away because of the shits I lived with. Recently I've been commuting back for exams.
I usually take the 10 minute walk + 40 minute train journey + 10 minute walk, but one day I got a lift in a car and spent an hour in a traffic jam. It's just a stupid waste to have all those cars with one person in each sitting on a motorway when we can be using trains ect.