So....when is the oil market bubble going to pop?

[XDConvert9mm]

Originally Posted by Brickboy240

When will it "pop?"

Well, Hillary and Obama plan on taxing the oil company's profits. So...seeing that most oil companies already pay more in taxes than they do their shareholders in dividends and more than that on maintenance and infrastructure to keep their refineries running...I'd say it will all "pop" when gas runs about 10-12 bucks a gallon, due to their meddling and nobody can afford to get to work.

LOL

- brickboy240

PS: doubt my math on the taxes and profits? Look up Shells profits and taxation for last year...its public record!

A little prespective on this:

Exxon's Q1 Income Taxes Set Record : $9.32 Billion - Seeking Alpha

Exxon profit disappoints even with record oil: Financial News - Yahoo! Finance

Oil falls for third day on stronger dollar - MarketWatch

The above shows, IMO, who's making the most money on Oil and a couple of the reasons it's so high priced right now.

[Brickboy240]

Profits don't mean much unless you consider the margins and taxes paid. Margins on oil are anything but stellar. Check your investments..chances are, if you have mutual funds in your 410k, you have oil stocks. it is still in your best interest that they do good.

Nobody said "boo" when gas was under 2 bucks a gallon and Exxon had wider profit margins...did they?

Do we want big oil to no make a profit? Hell,Exxon is one of the only US based companies that is still making a profit. Don't worry, though..there has been rumblings that Exxon might move their corporate office overseas because of (drim roll please) impending profits taxes! Many well paying jobs will just go away.

Explain to me how Exxon leaving US shores will benefit us all..I can't get there from here.

- Brickboy240

[XDConvert9mm]

Originally Posted by Brickboy240

Profits don't mean much unless you consider the margins and taxes paid. Margins on oil are anything but stellar. Check your investments..chances are, if you have mutual funds in your 410k, you have oil stocks. it is still in your best interest that they do good.

Nobody said "boo" when gas was under 2 bucks a gallon and Exxon had wider profit margins...did they?

Do we want big oil to no make a profit? Hell,Exxon is one of the only US based companies that is still making a profit. Don't worry, though..there has been rumblings that Exxon might move their corporate office overseas because of (drim roll please) impending profits taxes! Many well paying jobs will just go away.

Explain to me how Exxon leaving US shores will benefit us all..I can't get there from here.

- Brickboy240

BB, if this was addressed at my post, I was supporting your assertions above, not disputing in any way. If not, sorry for the confusion.

[longtalltechsan]

Originally Posted by Brickboy240

PS: doubt my math on the taxes and profits? Look up Shells profits and taxation for last year...its public record!

Correct me if I am wrong, but I believe I heard and read that Shell's profit was $10 billion. BUT, they paid $29.7 billion in taxes. Seems pretty harsh to me.

[rimfire]

Originally Posted by DanTheEldest

Go park the Super Duty and buy a motorcycle. Less demand = more supply and lower prices. We really do have a measure of control over this, but most folks don't want to give up their big toys. No matter what new domestic resources we tap (assuming we can shove the greenies in the closet long enough to get it done), IMO cheap gas is a thing of the past, and even though I like my V8's, it's time to start adjusting.

Mostly agree that the price will not drop much because of supply/demand, but there has been some recent evidence that the futures markets have been driving prices of oil and other commodities (wheat, rice, corn, metals, etc.). Google "Commodity Fund Inflows", there has been 1+ billion/ month inflows over the past year, and in March was running 2+ billion. These funds have to invest in futures so they buy, driving up futures prices. Hedge fund inflows have been huge 30+ billion/month - this money has to find a home and people are moving from equities & bonds to commodities. You have to separate real consumption and demand, which are not the same.

With all that said, only higher prices will reduce real consumption (which is why suspending the gas tax wont matter). Gas in the EU runs around $8/gal. In the past decade, US consumption has increased 20%+, while the UK has remained even and France is down 17%.

I'm a big believer that CAFE is a big failure and exists because the government has no balls to make the hard decisions. The first thing you learn in economics is that you cannot legislate the supply side - consumers will buy what they want so why penalize companies that fulfill those requirements. CAFE reduces customer choice, and increases vehicle prices - it is an indirect tax but gas was still cheap. You have to reduce demand, and the way to do that is raising prices (taxes - gas, displacement, weight, etc.) and use that money to encourage more energy efficient technologies. Of course you can let the market drive the price, but then you end up where we are now - on the wrong side of the curve trying to play catch-up.

[rimfire]

Dont forget to do the math.

Switching from a full size SUV (14/19 MPG) to a Honda Civic (25/36 MPG) will save you about $1200/yr (12,000mi/yr @ current prices). If you're inverted on your SUV loan, you might never break even on gas alone (although your payments might be cheaper). A motorcycle would probably make that around $1800/yr so the payback is 50% better, and they are easily 33-50% the cost of a car (even less used).

[afmo]

its got to come down eventually...like i've said in other threads, i think a large portion of the rise recently is due to oils stability. with the doom and gloom market outlook investors have become fiscal hermit crabs and put their money into things they KNOW will have value, like oil and gold. Thats why both of these things have seen HUGE increases in price lately. Gold at 1k + per oz, and oil at 120+ per barrel. Here's the thing though...people invest money so they can MAKE money. They aren't going to invest a bunch of capital into speculating on oil prices just to leave it in there indefinitely. They are going to have to sell sooner or later to get their profits. When the speculators start selling off their investments, the price will come down...

[DanTheEldest]

Originally Posted by Ride the Lightning

Easier said than done for many of us.

I hear ya. I've got friends who are contractors or are otherwise engaged in the skilled trades, and their big trucks are their livelihoods. My statement was more just a summary of my sentiment on the matter when I see people using gi-normous SUV's and trucks as single-person commute vehicles, then griping about the cost of gas. Everybody's situation is different, though, so take it with a grain of salt.

[kannibul]

Originally Posted by DanTheEldest

Go park the Super Duty and buy a motorcycle. Less demand = more supply and lower prices. We really do have a measure of control over this, but most folks don't want to give up their big toys. No matter what new domestic resources we tap (assuming we can shove the greenies in the closet long enough to get it done), IMO cheap gas is a thing of the past, and even though I like my V8's, it's time to start adjusting.

I think my friends firebird gets better gas mileage than my ranger.

His firebird: V8 6-speed manual
My Ranger: I4 5-speed manual

That said, I have a motorcycle, and it gets about 40MPG (cruiser-type)...but, given the line of work I do (IT), I'm supposed to maintain a professional image. It's kinda hard to do so with bugs on your clothing. Change clothes at work - right? OK, how do you do that without having to iron them, because you certainly can't pack them and have them come out wrinkle free!

Friday's, I can ride, and do on occasion - but there are a MULTITUDE of idiots on the road who wouldn't see a Duece-and-a-half, let alone a bike. I've had plenty of close calls while riding to work (and home)

Bike on the open highway - great!
Bike in traffic - not so great!

Then, there's also weather considerations.

Riding a bike on snow/ice = suicide.
Riding a bike in wet conditions = misery/pain (like riding behind a sand truck, but wet!)
Riding a bike in windy conditions (common in Oklahoma) = like stepping in a ring with a boxer at times!

[kannibul]

Originally Posted by Harry_Ballzack

Don't hold your breath...

One start would be to make all energy speculators and oil traders ,actually pay cash on the barrell head for there "purchases" rather than let them fleece the rest of us for almost no risk. they get away with legalized robbery and no one bats an eyelash...reminds me of the Old Chicago Merchantile.

Then again...if it crashes they can always look forward to a golden parachute/bail out in the vein of the U.S. government/taxpayer backing the bonds in JP Morgan's buyout of Bear Stearns.

How's that for free markets and market driven forces correcting the imbalances all by themselves?

Nothing like the Fed...

"We're putting the "Free" in Free Market"