Election week gas prices were year's low; started rising again immediately afterwards

[GaryC 7]

Another problem is that we buy most of our oil from countries that control the price. When oil was $18/barrel it was easy to have $1 gas. But now OPEC is charging $70/barrel. You can't deny the math. That is why gas is $2.20. I am surprised that it isn't $5 now considering how much oil has gone up.

Don't forget that not only the crude oil price has skyrocketed. The profits that the big oilies rake in have as well. If your math was right, they'd be hanging on by a thread right now. They certainly aren't. As much as I can't deny the math, you can't deny that there's apparently quite a bit more to the equation than crude oil prices and refining capacity.

The math is quite simple so it shouldn't be hard for you to understand. The oil companies make 10 cents/gallon profit. They sell billions of gallons of gas. Hence the big profit. It's not that hard to understand. The use of gas has gone up worldwide. The more they sell the more they make. What is so hard to understand about that?

[peejay 327]

Another problem is that we buy most of our oil from countries that control the price. When oil was $18/barrel it was easy to have $1 gas. But now OPEC is charging $70/barrel. You can't deny the math. That is why gas is $2.20. I am surprised that it isn't $5 now considering how much oil has gone up.

Don't forget that not only the crude oil price has skyrocketed. The profits that the big oilies rake in have as well. If your math was right, they'd be hanging on by a thread right now. They certainly aren't. As much as I can't deny the math, you can't deny that there's apparently quite a bit more to the equation than crude oil prices and refining capacity.

The math is quite simple so it shouldn't be hard for you to understand. The oil companies make 10 cents/gallon profit. They sell billions of gallons of gas. Hence the big profit. It's not that hard to understand. The use of gas has gone up worldwide. The more they sell the more they make. What is so hard to understand about that?

The US oil companies don't make nearly as much on refined products as they do off of the raw oil and natural gas. These record profits are in large part due to the huge jump in oil and natural gas commodity prices. Since the USA imports roughly 60% of its oil consumption it is likely the price of crude is controlled by the major producers and/or their governments. The US government has little leverage.

It doesn't take a nuclear rocket scientist brain surgeon to understand that if production costs at the well head remain the same and the price of the commodity (oil) increases dramatically...so does the profit. The cost spread on refined products is relatively small. The spread on well head production costs vs. commodity price can fluctuate wildly.

I can remember when crude oil was down to less than $10/barrel in the mid 1980's and a lot of US oil companies shut in marginal oil fields because the cost to lift the oil out of the ground exceeded the commodity price. You can't survive very long selling a commodity for less than production costs.