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I know: It's definitely not price gouging (insult away, BTW)

Discussion in 'Anything goes' started by Columbo, Jul 27, 2006.

Page 3 of 14
  1. Lyman_Bostock

    Lyman_Bostock Guest

    What is Exxon's profit margin?

    If it was 10 percent before the price of oil started going through the roof and it's the same today, then I don't see what the problem is.

    If the profit margin is a lot higher, then the red flags can be raised.

    They might be making a lot more money, but they also might be spending a lot more money to make it.
     
    Lyman_Bostock, Jul 27, 2006
    #25
  2. Columbo

    Columbo Active Member

    Oil is like medicine and drinking water after a natural disaster.

    They have ZERO elasticity of demand.

    Cabbage Patch dolls? Puhhlease.

    I'm guessing that you have no problem with someone selling a gallon of Zephyrhills for $20 in New Orleans after Katrina? Oooohhhhh, the demand is there!

    Chrissakes.
     
    Columbo, Jul 27, 2006
    #26
  3. Columbo

    Columbo Active Member

    The profit margin is leaps and bounds higher.
     
    Columbo, Jul 27, 2006
    #27
  4. LiveStrong

    LiveStrong Active Member

    Um, there is a minor difference, though. One was after a natural disaster. The other is because we are a country obsessed with our gas consumption.
     
    LiveStrong, Jul 27, 2006
    #28
  5. MacDaddy

    MacDaddy Active Member

    What is it, then?
     
    MacDaddy, Jul 27, 2006
    #29
  6. Columbo

    Columbo Active Member

    I put forth that both are natural disasters.
     
    Columbo, Jul 27, 2006
    #30
  7. Columbo

    Columbo Active Member

    Well, we have a slight, incremental increase in cars on the road. About the same amount of gas is being sold here over same time last year.

    Yet pure profit went from $1.20 a share in Q2/2005 to $1.72 a share in Q2/2006.
     
    Columbo, Jul 27, 2006
    #31
  8. Oz

    Oz Well-Known Member

    What floors me about gas prices is how quick they jump, then never seem to drop.

    On Valentine's Day, I began a cross-country trip. Bought gas just west of St. Louis for $1.98 a gallon and somewhere near Terre Haute for $2 a gallon. Now it's $2.99 right down the street from here.

    But of course, it's not price gouging.
     
    Oz, Jul 27, 2006
    #32
  9. The Big Ragu

    The Big Ragu Moderator Staff Member

    Oil is like drinking water after a natural disaster?

    Oil might have low elasticity of demand, but that doesn't change the fact that supply is severely constrained. Putting a price control on it won't create more oil. It's a demand and supply story, not just a demand story. What your articifical pricing will do is bring the oil price in China down slightly--they might even thank us before laughing at us--where they'll still be willing to pay more than the artificial price you've slapped on it. As I said, you'll have cheap gas. There just won't be enough of it.

    I'd love to hear the hysteria when someone like you gets his way and we have gas lines and rationing.
     
    The Big Ragu, Jul 27, 2006
    #33
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    What exactly about the worldwide oil situation gives you any reason to think gas prices should be dropping? Supply is being choked and demand is skyrocketing. Think about it rationally. Not enough of the commodity and more people want it. When that happens, prices increase, they don't decrease. It isn't gouging. There isn't some fat guy in a $10,000 suit making up prices. It's what the overall market is willing to pay for a barrel of oil that determines the price.
     
    The Big Ragu, Jul 27, 2006
    #34
  11. Lyman_Bostock

    Lyman_Bostock Guest

    Economics 101 might be over some people's heads, Ragu.

    Maybe if more oil were on the market (say, from ANWR or from drilling off the coast of Florida), the price would come back down, too. But if people don't want to add to the supply, the only other way to lower the price would be to lower the demand.
     
    Lyman_Bostock, Jul 27, 2006
    #35
  12. Columbo

    Columbo Active Member

    Someone like me... LOL... you made the goddamned Cabbage Patch reference.

    Zero elasticity: if they lift prices, the same number buys it.

    If they lower prices: the same number buys it.

    I know you understand that.
     
    Columbo, Jul 27, 2006
    #36
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