Do you believe oil companies were just testing the waters?

Question

Do you think big oil companies were just "testing the waters" to see how high they can rise fuel prices to a point where people start complaining and cutting down on purchasing the product? In economics, it's called "price elasticity" - basically finding the sweet spot where people will still buy the product even though the price goes up (or down). I think the $4/gallon price point is where people start complaining ALOT. Notice how it kind of went to the $4/gal price point and is now creeping downwards?

http://en.wikipedia.org/wiki/Price_elasticity_of_demand

Answer 1

In a way yes I do think that.

Answer 2

No, because the demand is inelastic in the short term. Any tightness in supplies due to refinery shutdown or oil-well production interruptions reduces the available supplies that buyers must have to keep the show going. Tightness of supplies and growing demand boosts prices sky-high.Oil industry and car companies knew this day was coming but they preferred to "milk us like cows" (Look it up, IT's a Harvard Business School Business Strategy) rather than expand into alternative sources of energy.  In addition the OPEC Cartel and the greed-driven, anti-social-till-you-the-consumers scream "OILCO's are irresponsible Price Gougers" can afford to ignore the whiners while they bank the goodies that cost you suckers/oil addicts a fortune. I believe consumers need to wise up and tell the Gov't that you've had enough. While the Gov't bails out one set of rich guys(Bankers and real estate industry) when they cheat and lose,another set of rich guys( OILCO's and rest of OIL Industry), who cheat and win, proceed to clean up your clocks. All the self-righteous business cheaters should give back their ill-gotten gains and we should stop bailing them out after they had a great time at our expense and everything goes bad! There is no magic here, just really smart & greedy people, who I know could care less about our stupid financial/economic personal problems! OILCO's and OPEC together are in reality behaving like the old OIL Trusts did in back in 1912 which led to federal antitrust laws being put in place and which your Republican superstars BUSH43 & Cheney, both oilmen, refuse to enforce! Many Congress people, on both sides of the party aisle, helped put in the screws too! This is predatory capitalism at its worst!

Answer 3

They were just checking to see what they could get away with. It comes from greed and the people let them do it. The government didn't care because it made them money also.

Answer 4

Oil Companies don't dictate the price of oil. Markets do. Oil companies (the majority) buy the oil from countries who have it, refine it into gasoline/diesel/etc and sell it to you. Only Exxon plays both sides of the fence. But overall, Countries and their state run oil firms control the oil supply and world markets pay the market price depending on supply and demand.

There is no board room meeting where some Oil Exec decides on today's oil price.

Answer 5

Not really, other than how normal movements back to equilibrium naturally occur.    Supply concerns, and rising demand in Asia drove the price up.  The stock market fell at the same time, due to other factors as well, and the result was a transfer of investment dollars from stocks into oil and other commodities.  The ability to buy on the margin exacerbated the problem, and that's how we got $60 worth of oil selling at $140.   It will come back down as cooler heads prevail.

Consumer sentiment is for fuel efficient cars at the moment.  We'll see if it lasts as the price of gas falls.  If it does, that will be a good thing on many fronts.

Answer 6

Part of it is due to the speculators and to the widespread development of other countries around the world.  I do believe that they are seeing what the market can bare as well.  Another company that is a widespread general merchandise store chain does this and then uses it as a marketing campaign.  They mark up the price then do a "rollback" to see at what price most people will buy from them.

Answer 7

I believe oil companies want to lower the prices next week so we can all do better.They want to share.We should remain as how we have cut back and conserve the resources.Waisting is a bad thing.

Answer 8

Oh yeah. Cost of petroleum had nothing to do with it.

Answer 9

probably, b******s