[OT] Gas companies report record profits (old energy thread)

Doran L. Barton fozz at iodynamics.com
Mon Jan 30 10:37:39 MST 2006


Grant Shipley wrote:
> After much discussion back in August (on this list) over why gas was
> so expensive......
> 
> I think we have the answer now.

Oil companies don't set the price of oil- the market does that. Market 
forces such as terrorism fears, natural disasters (e.g. hurricanes), and 
politics all play into that. 2005 contained an unusualliy high number of 
these factors and consequently, the oil companies profited big time from the 
market-driven price increases.

Think of it this way: If you make 10% profit on a candybar that retails for 
$1.00 and demand for that candy bar pushes the price to $1.50, your profits 
are going to go up 50% as well. The oil companies aren't taking a bigger 
slice of the piece, their slice is just worth more money.


-- 
fozz at iodynamics.com is Doran L. Barton, president, Iodynamics LLC
Iodynamics: Linux solutions - Web development - Business connectivity
  "Sight-seeing toilet ahead"
     -- Seen on a sign at a tourist spot in Japan



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