ewrbasedpilot

Today oil shot up $4 a bbl and briefly crossed the $100 mark again. This is going to KILL aviation unless something is done to curtail this insanity. When oil companies are raking in $40 BILLION in profits for a quarter, something is definitely wrong with the picture. At CAL, every $1 increase is another $44 MILLION off the bottom line, or over $176 MILLION off the bottom line just today!!! I hope the oil companies/speculators, and Saudi's are happy with what they're doing to everyone. I just wish our government would grow some balls (even tiny ones would help) and say enough is enough and start going after the speculators who look for every little nuance to push the price ever higher. But, since we're beholden to the middle-east and special interest groups, that will never happen and the consumer will be blamed for using too much. My guess is that "recession" will be a mild word for what's going to really be the end result. The average american can't afford to fill up their gas tank much more if this keeps up. I guess those poor people getting an "economy stimulus rebate check" are salivating while waiting for a few more dollars to fill their tank. Meanwhile, the oil people are laughing their way to the bank................. Flame away..............

hjs1971

Yup, this oil thing sucks...what was the price per barrel 10 yrs. ago? What has happened since then (non-speculative)?

Spaceman Spliff

Oil companies are not the only ones to blame. Congress will not permit how many billions of barrels of oil to be recovered from ANWR, that might relieve some of the hemorrhaging.

I think the high price of oil can be partially explained by the collapse of the dollar. Since oil is priced in dollars, and dollars don't buy as much as they used to internationally, the OPEC fat cats need to raise the price to be able to buy their A380s in Euros.

jungle

Oil companies, speculators, Saudis, special interest groups and the government. Can you think of anyone else to blame for a free market in which the demand has increased with supply remaining steady?

None of the entities you mentioned control oil prices. Demand and supply do.
The oil companies are about mid-pack in the corporate world in terms of profit margin. The US government confiscates two to three times what the the oil companies do on every gallon of fuel sold.

Tax the corporations more,you say? The consumer will pay those taxes with every gallon of gas sold.

CPOonfinal

Oil companies only make 10% profit on thier product. You'll be hard pressed to find another business that is successful and remains successful making only a 10% profit. The government makes more on a gallon of gas than the "Big Oil" companies. BTW, there have been several congressional investigations into the profits of oil companies and the price of oil and they've never found anything. I want lower priced oil too but I think you're pointing the blame in the wrong direction. Just a recommendation, keep your emotions out of it.

Let's ask ourselves why oil prices have shot up in the last couple of weeks. Do a little research and you'll find the answer resides in South America.....and goes by the name of Chavez.

Spaceman Spliff

Let me guess..you're voting for Ron Paul?

FliFast

Capt,

I agree with almost all of your post.

My post is not aviation related, maybe more food for thought.

It is an interesting comparison to see where the price of oil was in 1999 and where it is today. A simple statement, without political or conspiracy innuendos, but the Bush family and the Cheney family have ties to the oil industry.

This may sound a little silly, but the other day waiting at a traffic light I counted how many of the vehicles passing through the intersection were SUVs, pickups, Soccer Mom vans, and the like and approx. 8 out of 10 were in the large gas guzzling category. I can understand why everyone needs an SUV for those harsh Winters we have in Tampa. Essentially, our appetite is a large variable on price.

Inflation from the energy sector ripples through everything else...food prices, price to deliver gasoline to the pump, cab fares, ticket prices, etc. The resulting higher prices has caused the average Joe to have less discretionary income in his pocket resulting in recessed spending. The Fed in turn sees the higher prices and sounds the inflation alarm and raises the cost to borrow money (interest rates) and whoops-a-daisy, the housing market starts to falter since housing purchases are sensitive to interest rates. And guess what, there goes the value of the dollar which unfortunately is the monetary unit used for trading black gold.

Furthermore, as mentioned above, some of the OPEC names (Chavez and Ahmadinejad of Iran) also know that they can issue a statement and raise the cost of oil a dollar or two. Just imagine what happens everytime Iran runs a military excercise in the Strait of Hormuz, it creates tension that speculators use as an air pump for oil prices.

EWR, I disagree with your statement that the govt should grow some balls. They have plenty of cahonies, and even bigger wallets.
But in summary Capt, I agree more can be done from the top down to create layers of resistence for oil speculation.

Let me be clear in closing, this isn't a government conspiracy...the number of variables are intricate and numerous. However, it's just my humble opinion that some of these economic variables do reside in politics, whether it orignates in comments made in Iran, or our National Weather service issuing statements that it will be a cold Winter followed by 75 Atlantic Hurricanes in the Summer. I'm not saying our Gov't lies to us, I just think (like any other accounting practice) that you can present any empirical data in a subjective manner to achieve the desired result.

Just suffering at the pump like the rest of ya,

FF

the turtle

Airbus sells their A380's in dollars, not euros

jungle

Let me guess, you've never studied economics?
The politicos cannot control the markets and neither can wishing things weren't the way they are now.

Radials Rule

I seem to remember that OPEC regulates production among its members. That would have an effect on the supply/demand ratio you speak of....I think.