Why have The Evil Oil Companies and The Evil George Bush and The Evil d**k Cheney lowered the price of oil?

Question

Why would they do that; I THOUGHT they were evil.

Hugs 'n Kisses!!! '08

Answer 1

"They" did not lower or raise the price of oil. The cost of anything is determined by the "Law of Supply and Demand".

Answer 2

They are not evil.  They have policies and beliefs that are different from yours.  They do not control the price of oil.  Do you remember a few weeks ago when Bush went to Saudi Arabia and met with the princes and asked them to please increase production so prices would come down? Do you remember what he was told?  If he had the power to control oil prices, why would he do that?  (see first citation below)

There are a few factors at play here.  One is the law of supply and demand - the more there is of a commodity, the more readily available it is from a variety of sources, and competition among those sources forces the prices down.  The less there is, the more the prices go up.

Do you remember when Katrina hit New Orleans?  There was a major spike in gas prices at that same time.  (see citation below) Why?  Because drilling platforms and refineries in the gulf were evacuated and taken off line.  The supply was going to be limited - no one knew if there was going to be major long term damage or not, but our supply of readily available refined gasoline was compromised.  Even if there was no damage, it takes a long time to bring a refinery back on-line and producing at full capacity.  Supply went down, demand stayed the same, prices skyrocketed.  After the hurricane passed, Bush put a bandaid on the situation by releasing some of our strategic oil reserve (which is supposed to be used in the event of a national disaster) and additionally there was no real long-term damage to the platforms, drilling commenced again, the refineries were back on-line and prices came down again.  Unbelievably, people said Bush had raised the prices so he could lower them again in the fall to influence the mid-term Congressional elections.   (Those were the elections that saw Democratic victories in both the House and the Senate, btw - some influence!)

Another factor is speculation - there are people and companies betting on the future price of oil - they watch the world markets, the political situation around the world and human behavior, and invest in the rises and falls of the oil market.  This has a major effect on what you pay at the pump as well.

The constant and consistent rise in oil prices (I'm talking over 30 years here) is because the US has done nothing to curb our dependence on foreign oil, or on oil in general.  We have, for political reasons that I don't entirely understand, banned the construction of new refineries, banned domestic drilling in areas where we know there are huge reserves, banned the construction of nuclear energy plants, banned the construction of offshore wind energy plants, invested heavily in corn ethanol even though we know without question that it takes more energy in its production and transportation than it is able to produce, and on and on and on.  There has been a major new-home construction boom all over the country, yet very few of these homes use solar or geothermal energy.  This goes back a lot farther than Bush or Cheney.  

As far as the oil companies are concerned, do not forget that it is we, the American People, who own these companies.  Exxon-Mobil, Hess, BP - all of them are public companies, traded on the stock exchange.  These stocks are owned by individuals, mutual funds, pension plans, annuities, IRA's - they are part of what is giving Americans security for retirement, beyond what pittance we are able to glean from the near-bankrupt Social Security Administration.  It's not just the rich investors - don't make that mistake.  Check the source below, and check out your own pension or 401-K or retirement annuity - I am a teacher at a University and my 401-K includes choices from Vanguard, T-Rowe Price, and Fidelity - all large institutional owners of Exxon Mobil.  Frankly, my wife, my kids, and my mortgage company all hope Exxon Mobil continues to do well.  If you call me rich, I will laugh in your face.

Those who want to blame the oil companies are quick to point out that they are "Gouging Us With Obscene Profits" - citing the 11 billion in profits that Exxon-Mobil made last quarter.  They fail to point out that the profit MARGIN (return on investment and business activities) was only about 9 percent- they paid more than three times that amount in taxes, and their profit pales in comparison to companies like Microsoft, which has profit margins in the 20 - 30 percent range.  The government has made far more "windfall profits" on Exxon-Mobil's activities than Exxon-Mobil, or you or I in our pension plans.  What do they do with these windfalls?  Hand out pork to constituents, so they can get votes.  Those are called "Earmarks".  

The reason that prices came down recently is very complex, but conceptually very simple.  As gas prices go up, Americans bite the bullet and pay at the pump - up to a point.  At some point, it becomes too much to bear, and it affects our behavior.  We curtail vacations, choose not to fly, car-pool more, take public transportation - in short, we mount a grass-roots protest.  Demand goes down.  Speculators, who have purchased large amounts of crude, oil futures, and refined gasoline in expectation of high summer demand for fuel, are stuck trying to get rid of inventory.  Supply is high, demand is low, price goes down.

There's another, longer term factor in play here also.  As the House of Representatives session began winding down for the summer, the Democrats (led by Nancy Pelosi) showed signs of not wanting to listen to or vote on any energy policy, no matter how comprehensive or inclusive, that would include drilling.  Whether drilling is right or wrong, whether it should or shouldn't be part of a comprehensive plan is beside the point right now - there was a huge public outcry of "Drill Here, Drill Now".  This was spearheaded by Newt Gingrich, a private citizen.  The support for this is huge - 70 percent of Americans believe we should drill.  The conventional wisdom is that the Bakken reserves, the offshore reserves and the ANWR reserves contain enough oil to make us the number one producer of crude in the world; again, whether or not this is true is not as important as the fact that the speculators, the oil companies, the investors, and those involved in the WORLD market (Canada, Venezuela, Mexico, Saudi Arabia, others) foresee a huge glut in the production of crude within the next five to ten years.  They see supply increasing, easing demand, which drives down prices.  

Beyond that, the American public is in general fed-up with high oil prices and our dependence on the commodity at all.  Most people believe that in addition to drilling SOMEWHERE to increase supply, we will begin to invest more aggressively in alternative fuel sources, this time with more purpose, which will also ease demand.

Too many people take the easy (but incorrect) way out, and blame Bush or Cheney or the Evil Oil Companies, as though they were "puppetmasters" pulling strings just for the fun of watching Americans squirm, or enriching some unseen "cronies".  You can hate them all you want - they certainly deserve it in a lot of ways, but to blame them for this is just wrong.  It is also dangerous and damaging - it takes focus off the real problem.  

My point of view is neither Liberal nor Conservative - it is based on the workings of simple and also very complex economics.  It is not just Bush, Cheney and/or the Big Oil Companies - it is the power-plays by Nancy Pelosi and the Democrat house, it is Wall Street, it is human behavior, it is the weather, it is the Saudis, it is many things.  

One bizarre offshoot of this is that the "Evil Bush/Evil Oil Companies" attitude is being promoted by the Democrat presidential campaign; Barack Obama wants to put a windfall profits tax on the oil companies to punish them for making too much money, then give $1,000 to some people to help offset the cost of gas (see citation below).  What do you think will happen then?  If you had a business selling widgets, and the government increased your cost of doing business, how would you compensate for that?  By increasing the cost of widgets!  Increasing the tax on oil companies' profits will cascade downward right to the price of gas at the pump.  Further, it will impact the stock price of the companies, which will affect the performance of all those pensions and retirement funds, and affect the investors' decisions to buy or hold the stock, which will drive the price of the stock down which will hurt me and my family, and on and on and on.  

This position is known as a "Populist" position - regardless of whether or not public sentiment is right or wrong, Obama senses the tide and is appealing to that sentiment.  Same thing happened during the Spanish American War.  

Do not be fooled, do not let yourself be talked into name-calling, joining band-wagons, or playing the "blame-game".  The world is more complex than that - do your research; read both Conservative AND Liberal blogs, newspapers - listen to Fox and CNN and NPR and Air America - use your brain, think for yourself.  

Answer 3

Current lower prices are not a result of Bush administration policy. Oil prices have fallen because people are using less.

Answer 4

I think they're just playing with our collective heads.  People were getting serious about alternative fuels and the demand that more funds be made available to fund the research...then, bam the price of gas goes down.

And, I don't for one minute believe that there's any oil off our shores that can be immediately put to use.  Not in years either.  I think the whole gas problem and the possibility of oil off shore is a fabrication willingly eaten up by the public in the US.

We have the most idiotic populice in the world to believe everything the right wing of the Republican Party throws out for consumption.  And then there's the media which are to lazy to research a story and put the real details out... oh, well

thanks

Answer 5

One step at a time.

The policies of Commander-In-Thief Dubya Gump and his keeper, Darth Cheney, have allowed for the kind of de-regulation that permits oil companies like Exxon-Mobile and Chevron to raise prices at their whim. They did this very dramatically this year, even in the face of OPEC officials indicating that there was no shortage in supply.

The price of gasoline is lower now than it was in July, but dramatically higher than 1 year ago. This has caused hyper-inflation in other markets, such as in food and transportation.

Every sector of the US economy is showing ghastly figures except the oil industries. At long last, perhaps, they have shown that they DO have some shame and stopped sticking the US consumer in the chops.

But several factors also have affected the situation.

-- Dramatically reduced usage of gasoline by the American consumer.

-- The National Boycott on Exxon-Mobile (see link).

-- The sudden upsurge in discussion of nationalizing OUR oil and taking it away from the corporatists.

-- The refusal of Congress to buckle under and lift the ban on drilling in sensitive areas -- this drilling would not get us even one drop of oil for at least 11 years, and even then the oil would not go to "American consumers" but instead be sold on the international market for the going rate per barrel, just like Chevron and Exxon-Mobile has ALWAYS done with oil drilled in the U.S.

-- Increased talk of removing the obscene tax breaks that Gump and Darth bestowed upon them. If the oil compainies are the ONLY corporations making humongous profits, why should they also be getting billions of our money in tax breaks???

-- The approach of the Dem & Repub National conventions. The crooks always knew that the price gouging was going to be temporary, just to be done during Gump's last year in office and only until a few weeks before the Conventions. See, they want us all to forget how they screwed us royally by the time of the election. They want the fruits of their crookery and the election too, so that McSame can provide them with even more tax cuts.

Wake up people. Vote the crooks out. Nationalize our oil.

Answer 6

anyone who says oil companies are evil is a communist, seriously they are businesses just like every other one, and they are trying to make a little bit of money.  That is the american dream.

Answer 7

You call todays prices low.......?????????????

Answer 8

Prices actually went down because people are driving less.

"Americans Drove 1.4 Billion Fewer Highway Miles in April of 2008 than in April 2007 While Fuel Prices and Transit Ridership Are Both on the Rise"

As you can imagine the 1.4 Billion fewer highway miles figure has increased greatly over this summer, as well, and this lower demand has finally caught up with the supply-- basic economics, really. Gas prices are still pretty high, though. But you probably won't pick this answer, even though it's right--I bet 25 dollars on that.

http://www.dot.gov/affairs/dot8408.htm

Answer 9

haha bush is just an idiot tool...cheney is evil...the kind of evil that arises from a self-righteous sense of duty to control world resources...along with a healthy dose of money lust....cheney and bush are internationalists...after their terms they will peddle influence in the middle east and China just like all the rest of our recent presidents...(yes even clinton..did you guess i was a democrat)

Answer 10

And look! They didn't even have to drill offshore or in National Parks! Amazing how that works isn't it?

Answer 11

Because they've gotten people desperate to drill in nationally protected wildlife reserves.

Answer 12

According to liberals, Its only Bush's fault if the price goes up. If the price goes down, it must be because the democratic congress did something.

Maybe now that we all inflated our tires we have reduced demand.