Posted by Keith on Thursday, April 13, 2006 at 7:01PM :
In Reply to: Re: Drop Gas Prices posted by Kaegi on Thursday, April 13, 2006 at 6:01PM :
News and speculation is not the reason we have sustained high oil prices, it is supply and demand as Bruce says. The sustained and growing surge in demand by China alone has caused much of the current seller's market which allows OPEC to keep the price high. In the US our inventory of refined petroleum products is paper-thin; it almost exactly meets consumption, thanks in large part to our failure to add refining capacity as domestic demand has continued to rise.
The notion that boycotting Exxon could cut the price of gasoline in the US by 50%, or any noticeable amount, is based on same sheer ignorance about the oil industry as is the uproar over that industry's recent profits. For example, as a percentage of revenue, Exxon is making around 10 cents on every dollar, while the banking industry makes about 16 cents, cigarettes about 22 cents, and pharmaceuticals over 25 cents. Does anyone really think that if we all stop smoking Marlboros that the price of tobacco will drop by 50%? Give me a break!
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