web design

Oil Prices

May 15, 2008 |Let's Tweet

Oil prices are at an alltime high. But why? There is no shortage of oil, however the President of the United States is asking Saudi Arabia to increase the output of oil.

"Crude oil movements indicate that some nember-countries are unable to find buyers for their additional supply,".

Reference: Reuters

The possibility that the cartel is doing what ever it takes to control Oil prices is doubtful. They haven't really announced any cutbacks and their last decision was to increase output. Now of course, why would these corrupt people want to increase output when they are already racking in the $$$? Simple supply and demand. Oil's hotter then ever before and they are more then willing to sell. Even if it means selling more then their OPEC quota as most countries involved in the cartel do.

The refineries are 86.6% utilized, much like they were back in 2004 with no new refineriess coming online, nor have any for years. But theres no motivation for the refineries to increase their productivity as they are caught in the middle of a double standard. The high price of oil is increasing their expenses, and the decrease in demand of gasoline/petro, is decreasing their revenue.

"However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent."

Reference: NY Times

We all know that the local small corner stores don't make the big bucks, as that information (expenses) is provided to us from IRAC. The only thing they make the money in is the extras like chips and pop. So in the end, I think we're lucky to only have a 6 cent raise. According to this report for every $1 crude oil goes up, U.S. gasoline should increase by 2.5 cents. And for the record, I do wish Oil prices would go down

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