2.13 a gallon

[colleeng47]

$1.98 a gallon at the 7-11 in Mustang, OK.

[Ever Adrift]

The decline in gas prices has nothing to do with the election and everything to do with the global economic downturn; many commodity prices are declining rapidly due to decreased spending power in most countries. Slower growth in developing countries translates into lower demand as does rising unemployment and economic hardship in the developed world. Deflation (as opposed to inflation) is a very real possibility, and comes with its own set of problems. So, decreased oil prices may be great when taken at face value, but are actually indicative of troubling systemic problems in the global economy.

One thing is certain; global oil prices will increase again. Indeed, the long-term trend will continue to be upwards, though we may see lower prices for some time right now. The real problem is that increases in global oil production are slowing while demand has been skyrocketing. That demand has slowed for the time being, but this is temporary. The number of new oil fields being found and brought into production annually is decreasing steadily and the newer fields tend to be smaller than previous oil fields. Much of the new oil being found is also located in places which increase the price of extraction, thus increasing cost. The vast majority of energy experts believe that global peak production will occur anywhere between 2010 and 2050, but demand will continue to raise exponentially as large developing countries develop sizable middle-classes. All one needs to do is look at China and India whose thirst for oil has increased dramatically in recent years. Together, these countries hold a third of the world's population but have few individuals who one cars. As they develop, hundreds of millions of people will want cars and demand better and more goods which will also require oil for transportation costs. Nor are China and India alone; many other developing countries are reaching income levels that translate into major increases in oil demand (Brazil, South Africa, Turkey, Kazakhstan, Russia, Ukraine, etc).

So, the point is to enjoy it now because it's not gonna last.

[xS☺B☺s]

Originally Posted by Drover

First, ExxonMobil is a private company entitled to make a profit, so there's nothing to apologize for.

Second, "Exxon never paid for the Valdez spill" is a lie. One of the listed expenses for this quarter is $171 million toward the punitive damage award, not to mention they've already paid out approximately 3 billion in cleanup costs and compensatory damages.

Third, yes, ExxonMobil made a 14.83 billion dollar profit. But interestingly enough, none of the news reports sensationalizing "the largest profit in the history of mankind" ever bother to report the other side of the equation: expenses. Many of the stories also neglect to mention that 1.62 billion of those profits came from the sale of a transport division, so their profit from actual operations was 13.21 billion dollars. That's still a lot of money... but compared to how much in expenses? That's the part nobody wants to talk about because they just want you to be up in arms because ExxonMobil made a lot of money.

So here's the "neocon math," or as calm, sane people like to call it, just "math"...

14.83 billion total profit
-1.62 billion from sale of the transport division
------
13.21 billion profit from operations


3Q expenses: 137 billion
3Q profit from operations: 137/13.21 = 10.4% profit margin.

I don't know about you, but I don't consider a profit margin of 10.4% to be particularly outrageous.

Well thanks for the NeoCon math lesson, but really, you shouldn't have. I was being facetious. Your pie chart doesn't convince me that there was a 100% drop in demand to explain the 100% drop in price. But by all means, go right ahead.

[UpperPeninsulaRon]

Originally Posted by Bostonian08

More importantly, if supply and demand was the only issue, why it that ExxonMobil profit margin isn't proportionate with the supposedly supply deficit. It is in fact perfectly congruent with the equation as we pay more, they make more. I'd like to see the neocon math to apologize for this.

The forces affecting the supply and demand of a commodity should not be construed to be proportional to the extremely complex revenue and expense (on the P&L side) and asset (on the Balance Sheet side) actions that determine the profitability of a corporation.

Corporations make choices between difficult alternatives to try and maximize shareholder value. Why would one assume that the profit of a company should be directly proportional to the supply and demand of one variable?

[Movie Lover]

Just be thankful there is this type of fuel, its going fast.

[Drover]

Originally Posted by Bostonian08

Well thanks for the NeoCon math lesson, but really, you shouldn't have. I was being facetious. Your pie chart doesn't convince me that there was a 100% drop in demand to explain the 100% drop in price. But by all means, go right ahead.

OK, there wasn't a "100% drop in price" (that must be "loony left math" ) or else oil would be free. Second, commodity prices don't move in a 1/1 ratio with changes in demand. How much the price moves will depend in great deal on demand elasticity of the given commodity. Since demand for oil is highly inelastic, it only takes small movements in demand to create substantial movements in price.

[donsabi]

Now that we are not being ripped off at the gas pumps people are overlooking the increases in retail prices especially food. I watched one item double in price in one month and another went up 25% and that is just two items. IMO high food prices are here to stay even with declining oil prices. Either way you look at it the American people just got ripped.