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SQUEEKY2's avatar

Are the oil companies really hurting financially?

Asked by SQUEEKY2 (20191points) August 14th, 2015

Ok, the price of crude oil is way down, that’s a fact and the oil companies are crying, but the price at the pump is still sky high just hit a $1.35 a litre here in B.C that’s $5.10 a gallon for my US friends (price and demand) are they doing as bad as they claim when they are still screwing us at the pump?

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11 Answers

stanleybmanly's avatar

They’re doing just fine. The people working for them,the contractors servicing them, and all the folks formerly chasing the boom are hurtin.

SQUEEKY2's avatar

That’s what I kinda figured the wealthy screaming they are so hard done by, kinda makes ya want to chuck your breakfast.

zenvelo's avatar

Gas prices in the Chicago area jumped $1 a gallon since Monday, because of a refinery fire in Indiana which took a major mid-western supplier off-line.

Funny how lack of supply can drive the price up so quickly, but an abundance of supply takes months for prices to drop.

Oil companies are not hurting, except maybe BP, which had some bad financials because of all the fines and liabilities for their evil ways.

thorninmud's avatar

The shutdown of the Indiana refinery @zenvelo mentioned is also driving up your gas prices, @SQUEEKY2 . It’s a big supplier to western Canada. Also, the Canadian dollar has slipped significantly against the U.S. dollar, which also drives up the price for you. Sorry.

zenvelo's avatar

The oil companies are making a ton as they sell gasoline at a huge premium over the cost of the oil.

See this story from Dow Jones News today:

Retail Gasoline Prices Soar In US
Retail gasoline prices have soared this week as a series of refinery outages forces drivers to pay more at the pump even as it helps push oil prices further down on their historic collapse.

Bulk-market gasoline prices at regional hubs are trading up across the country this week, rising as much as 57% in the Chicago area to hit its highest prices in almost a year, according to the Oil Price Information Service. Prices have soared above $5 a gallon in parts of California.

Some prices, including gasoline futures, have retreated in the past two days, but at times this week drivers in places like Chicago and Los Angeles have had to fill up at prices the equivalent of more than $110 a barrel for crude, even as U.S. crude prices have fallen below $43 and set new six-year lows. The spread between gasoline and oil prices have been double and sometimes as much as sixfold higher than what would have been expected, said Tom Kloza, co-founder of OPIS.

“This is the most extreme summer that I’ve ever witnessed,” he added.

The unexpected turn saps some of the benefits U.S. consumers had started reaping from a global glut of oil. Drivers have flocked to the road this year and refiners have been running near capacity as both take advantage of oil prices that have fallen about 60% from last year’s highs.

josie's avatar

Given the cost of discovery and harvest, the oil industry’s margins are pretty tight.
Having said it, they control the most valuable natural resource ever controlled by mankind, so it is understandable that the potential for making money is incredible.
Try living your life without the oil.
What would you do if the oil companies would become disgusted with your attitude and close shop. You would not like the result.

zenvelo's avatar

@josie Hawaii is getting close to there, and so is California as evidenced by the number of hybrid and electric cars keeps growing. Just ask Elon Musk.

Aster's avatar

I know half a dozen present and former oil company workers and all of them are scared to death , one has had his pay check cut in half since most of the orders to build new oil rigs were canceled and their wives are selling cupcakes or clothes in flea markets. His wife is so scared he’ll be laid off.
Gasoline in Texas has gone down quite a bit.

Adirondackwannabe's avatar

Falling commodity prices hurt the value of your inventories. But it doesn’t affect cash flows.

LuckyGuy's avatar

They are doing just fine. When the CEO’s annual salary and benefits drop below $1,000,000 per year you can start to worry a bit.

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