Does big oil just throw a dart at a board to pick prices these days?!?

[dragonzim]

Quote:
Originally Posted by Darthtang AW http:///t/393493/does-big-oil-just-throw-a-dart-at-a-board-to-pick-prices-these-days#post_3501203
The average grocery bill for a family of four is 12,000 dollars a year.
That seems awfully high. Most estimates I've seen put it at around $150 a week, or $7800 a year.

 

[farsight32]

Quote:
Originally Posted by TheClemsonKid http:///t/393493/does-big-oil-just-throw-a-dart-at-a-board-to-pick-prices-these-days#post_3501042
And there is where the perils of capitalism are felt hardest... do you make as much money as possible while hurting the people of your country domestically? Or do you do the right thing and try to find a healthy balance that won't be quite as profit filled, but hey, at least the common folk in your country aren't suffering as much...
I would say remember that you always have to follow the entire chain of events in any decision. The short-term benefit of export will be high margin revenue for the owners of producing companies, which will not benefit most people. They will sell government decision makers on this plan because it will drive domestic prices back up.
By selling gas internationally, the market will equalize and prices will raise to normal levels. When prices are low drilling stops. When prices come back up, companies will begin to drill again and produce at full capacity. This will create more jobs and mean landowners will start to receive their royalties. The endgame to this plan is that it will lead to a point where normal citizens are getting a share of the profits.
If another plan is chosen, such as domestically consuming excess gas reserves, it will be hard to sell to decision makers. It would take a long time to domestically use the excess reserves, especially when you account for the fact that all U.S. oil wells produce gas too, and most royalty contracts have producers trapped into producing, even when we don't need it. While prices are low, companies will continue to cut back on drilling, and the trickle down money that is produced will cut off.
The problem with our economy is that every decision made will hurt somebody. I have found the best way to predict an outcome is to find who has the most power to make a decision, and what will benefit that person(s) most. Then, either find a way to put yourself in the chain to make money, or try to be optimistic. If you focus on the economy and focus on what hurts you, it is a very grim picture. I just try to focus on the bright side, and know it will improve.

 

[darthtang aw]

That seems awfully high.  Most estimates I've seen put it at around $150 a week, or $7800 a year. 
http://www.dailyfinance.com/2012/08/06/food-prices-rise-drought-money-saving-tips/

 

[dragonzim]

Quote:
Originally Posted by Darthtang AW http:///t/393493/does-big-oil-just-throw-a-dart-at-a-board-to-pick-prices-these-days/20#post_3501217
http://www.dailyfinance.com/2012/08/06/food-prices-rise-drought-money-saving-tips/
Granted, the last time this study was done was in 2010...
http://www.ehow.com/info_7945633_average-grocery-budget-americans.html
I know for my family of 4 we spend about $75-$100 a week right now. My boys are only 3 though, so I know that cost is going to rise as they get older but I just dont see it going up by a factor of 2.5.

 

[darthtang aw]

Granted, the last time this study was done was in 2010...
http://www.ehow.com/info_7945633_average-grocery-budget-americans.html
I know for my family of 4 we spend about $75-$100 a week right now.  My boys are only 3 though, so I know that cost is going to rise as they get older but I just dont see it going up by a factor of 2.5.
My bill runs about 250 a week. However, I don't skimp when it comes to food. Meat from butchers..vegetables from farmers markets (winter time farmer market type stores) Canned goods I do however price shop a bit more. I do buy a few exoctic spices and such as well which are "overpriced". We do buy ramen noodles and stuff of that ilk as well..but these are used by the kids and not used as "meals"....plus factor in school lunches...which you aren't at yet. Whether you bag or buy, school lunches increase your costs.

 

[mantisman51]

2 things, because I knew it would be brought up: 1) Sandy caused supply disruptions to the East Coast, which would cause a glut in the rest of the country, not tighten supplies. Since there are few refineries in the Tri-State area, it has 0 impact on the rest of the country, but to make an oversupply because product isn't able to be sent to gas stations there that are not functioning. 2) Relative to where gas has typically been priced, $85/barrel oitl should reflect about $2,25/gallon. When factored against the current average of about $3.40/gallon, it is clear there is inflation of the market. Having said that, after watching an interview with the ExxonMobil CEO last year, it is not "big oil" gouging. All of the major trading houses, GoldmanSachs, MorganStanley and others have been using oil/gas in there trading portfolios heavily. As the Exxon CEO said, oil is traded 30x while on the tankers headed for the U.S. and then bid up by 3 or 4x after processing on its way to the gas stations. So while there is no real price-fixing, it is being manipulated by traders. If congress would repeal the deregulation of oil/gas trading that Clinton and Congress passed in 1998 and only allow those who physically handle the product to trade in it, prices would drop by 30-40% immediately.