CHESSNOID

I really can’t fathom that oil will hit $200 a barrel. It seems impossible, but back when oil was only $30 a barrel the idea of $100 a barrel seemed unthinkable. And here we are now creeping up to $124 a barrel. I guess if it was just gas for the car, then we would all just start walking or taking the bus to work. However, it is the effect of oil on the prices of other goods and services which is making it more challenging to live within our means. In a CNN.Money article:

“High fuel costs affect everything - everything in this room came on a truck at least once,” said president of the National Association of Small Trucking Companies David Owen in testimony.

“Consumers have several choices: they can buy smaller cars, drive less, cut back on trips or carpool, but truckers don’t have those options - they’re stuck between a rock and a hard place,” Owen added.

Gas station owners have been the target of suspicion of gas gouging, but in fact their profits have been squeezed too as they try to keep prices low as possible to remain competitive.

“When you look at oil companies’ earnings reports, remember that retailers aren’t sharing in any of that profit,” testified Bill Douglass, chief executive of gas retailer distributor Douglass Distributing Co. “Fuel prices must be as competitive as possible, because consumers will drive 10 minutes to save 3 cents a gallon.”

Douglass also noted that credit card companies collect 9 cents per gallon of gas sold, leaving many retailers with no profit from the gas they sell.

“Many retailers cannot survive on these small margins,” said Douglass. “Many convenience stores are going bankrupt and are being forced out of business.”

Refiners have also found turning a profit more difficult lately because the price they pay for oil has risen much faster than the price at which they can sell the gas they produce.

Right now someone is making a killing in the oil business, if not these guys. That money has to come from somewhere which is basically the entire base of American consumers who drive any kind of vehicle. Then all this money is funneled into the BIG OIL companies who still get tax incentives to maximize their profits. I really don’t know why Congress and the White House support this. I think if we follow the money trail it is easy to see the collusion occurring in front of our eyes.

Much of consumers’ and politicians’ anger has also been pointed in the direction of oil companies. While rising oil prices have contributed to higher food costs; lower trucking, refining, automaker and airline profits; and a change in Americans’ driving habits, Big Oil has enjoyed record profits in the past few quarters.

Exxon Mobil (XOM, Fortune 500) reported the second-highest corporate profit in U.S. history for the first-quarter, bested only by its fourth-quarter profit of $11.66 billion. Chevron (CVX, Fortune 500) also reported record profit for 2007.

“The matter that this committee oversees are at the heart of the problem: Anti-competitive consumer practices,” said director of research of public interest group Consumer Federation of America Mark Cooper in testimony.

Cooper said oil companies and the Organization of the Petroleum Exporting Countries are in collusion to maximize profits, noting production costs make up only $20 of oil’s price.

How can oil companies make the biggest profit of all time and claim they have nothing to do with the prices going up. This is like the cat trying to look innocent but caught with the bird in his mouth with feathers sticking out. I am hoping this will come full circle and when they get into trouble we don’t bail them out. When BEAR STEARNS finished stealing all that money from investors and finally had come full circle in its misdeeds and basically on the brink of bankruptcy, they got bailed out by our government using tax money. Why does our government allow the Enrons, Worldcoms, Bear Stearns, and Countrywides to get away with crime and not let the economic market forces bankrupt these companies and let our justice system prosecute these criminals. The lies oil companies telling us the cost of oil is going up while their profits go up faster just doesn’t make any economic sense.