What Do You Do If You Are An Oil Company?

[ThomWV]

What do you do if you are an oil company in these troubled times? Well let's say conservatively that if you are one of the majors you certainly aren't buying your oil on the spot market, that you have long term contracts in place for your crude supply and between them on average from one day to the next you are paying about $50 a barrel. I actually recally seeing that number mentioned in a newscast last week as the average price being paid. You don't give a tinker's dam what's going on with the speculators on the spot market except for this one thing. That daily price is being paid by some of your smaller competitors and it is their marginal cost of production that drives your product's price. So as they drive the price at the pump up you get to trail along and reap the profits and if you're a real privateer you'll also reduce your refining capacity while you're at it. Why strangle the goose that keeps on laying those golden eggs?

[Vincardog]

1. Being a Good Old Pig I would boost my prices to maximize my profit. Then use the increased money to

buy my competitors refineries and close them.

[gateley]

2. God Bless America! nt

[dkf]

3. Sometimes I wonder if people on DU have read up on

peak oil and its implications for the world.

It is really scary stuff. After I researched it I was in a deep funk for months.

In my mind, the only thing that will save us is expensive oil which will force us to move to do the research and development necessary to save us. If we don't get a move on it we are in BIG BIG TROUBLE.

I wish the government had enough guts to increase taxes on oil and gas but you and I know they won't.

Therefore, the only way to get oil expensive enough to move our butts is if the market price increases a lot.

Look at Al Gore and global warming. We're destroying our planet, and we know it yet we can't even get our population to change to CFLs. Most people don't give a damn. All they care about is the here and now.

[baldguy]

4. These are not troubled times for oil companies.

"Troubled times" is for little people, not oil companies.

[dkf]

6. "Troubled Times" are going to be for ALL of us unless

we can get our act together and find another way to power our lives.

[Kip Humphrey]

5. As Greg Palast correctly points out, restrain the supply to maintain high prices

[IDemo]

7. Palast is utterly clueless about Peak Oil

Even calling it the point when we will have used up "every last drop of crude oil on the planet..."???

No one even vaguely familiar with the topic has defined it that way. It's called "peak" oil for a reason.

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