So they are saying that supply and demand does not control prices? Could there be other contributing factors, such as world demand rising at the same time as prices and production increasing as well? Not telling the whole story is just as bad as lying.
I think the article specifically states that, Larry.
And that's the key. It's a world market, economists say.
Unlike natural gas or electricity, the United States alone does not have the power to change the supply-and-demand equation in the world oil market, said Christopher Knittel, a professor of energy economics at MIT. American oil production is about 11 percent of the world's output, so even if the U.S. were to increase its oil production by 50 percent — that is more than drilling in the Arctic, increased public-lands and offshore drilling, and the Canadian pipeline would provide — it would at most cut gas prices by 10 percent.
I don't believe any of that. We have more oil, gas and coal than any other country in the world. If we increased our production, then the imported stuff would go elsewhere and we could become energy independent. I think that should be the goal, not to have to depend on any foreign governemnt, friendly or otherwise, for our energy needs. We have it within our capabilities to be the worl's largest producer of cheap energy, we just don't have the government that wants to do that.
You want the government to do this? Obviously the CEO's of our large US oil companies are not going to sacrifice their profits so that we can save money at the pump. Even at this price, demand is inelastic – for every nickle that the price of oil goes up, the oil companies make more money, hence, why they're setting RECORD profits! Why would a CEO of an oil company, who's main function is to maximize the wealth of their shareholders, want to produce so much oil as to push down the price on a brl of oil, hence, reducing their revenue? The answer is they wouldn't. Besides as one of the posts already stated, the US oil companies don't really control the price of oil nor do they want to. OPEC is the main price setter and US oil companies like Exxon love OPEC — someone to blame for high oil prices.
In addition, the cost of retrieving oil is not the same for every find. There is a reason why we are seeing a lot more small wells coming on line and the Bakkens, that is, it now makes sense economically to do so given the going rate for a brl of oil. When the price of oil falls, some of these wells and other finds will shut down thereby reducing supply. This will not reverse itself until prices start rising again – it's a cycle.
Finally, even if what you say is true, the US government would have to get involved – that is, they would have to demand that our US oil producers produce more, a lot more because they're not going to do this on their own. If you still don't by this, pretend you're the CEO of an oil company, what would you do to maximize your shareholders wealth?
So they are saying that supply and demand does not control prices? Could there be other contributing factors, such as world demand rising at the same time as prices and production increasing as well? Not telling the whole story is just as bad as lying.
I think the article specifically states that, Larry.
And that's the key. It's a world market, economists say.
Unlike natural gas or electricity, the United States alone does not have the power to change the supply-and-demand equation in the world oil market, said Christopher Knittel, a professor of energy economics at MIT. American oil production is about 11 percent of the world's output, so even if the U.S. were to increase its oil production by 50 percent — that is more than drilling in the Arctic, increased public-lands and offshore drilling, and the Canadian pipeline would provide — it would at most cut gas prices by 10 percent.
I don't believe any of that. We have more oil, gas and coal than any other country in the world. If we increased our production, then the imported stuff would go elsewhere and we could become energy independent. I think that should be the goal, not to have to depend on any foreign governemnt, friendly or otherwise, for our energy needs. We have it within our capabilities to be the worl's largest producer of cheap energy, we just don't have the government that wants to do that.
You want the government to do this? Obviously the CEO's of our large US oil companies are not going to sacrifice their profits so that we can save money at the pump. Even at this price, demand is inelastic – for every nickle that the price of oil goes up, the oil companies make more money, hence, why they're setting RECORD profits! Why would a CEO of an oil company, who's main function is to maximize the wealth of their shareholders, want to produce so much oil as to push down the price on a brl of oil, hence, reducing their revenue? The answer is they wouldn't. Besides as one of the posts already stated, the US oil companies don't really control the price of oil nor do they want to. OPEC is the main price setter and US oil companies like Exxon love OPEC — someone to blame for high oil prices.
In addition, the cost of retrieving oil is not the same for every find. There is a reason why we are seeing a lot more small wells coming on line and the Bakkens, that is, it now makes sense economically to do so given the going rate for a brl of oil. When the price of oil falls, some of these wells and other finds will shut down thereby reducing supply. This will not reverse itself until prices start rising again – it's a cycle.
Finally, even if what you say is true, the US government would have to get involved – that is, they would have to demand that our US oil producers produce more, a lot more because they're not going to do this on their own. If you still don't by this, pretend you're the CEO of an oil company, what would you do to maximize your shareholders wealth?