Exxon says oil barrel should be in $60-$70 range Damn yall hear this
Options
politicalthug202
Members Posts: 3,098 ✭✭✭✭
The exxon mobile CEO just admitted gas is way over price based on demand.
Exxon says oil barrel should be in $60-$70 range
he just said this ? on TV
Email
Print
Reuters – Exxon Mobil CEO and Chairman Rex Tillerson speaks as he and other top oil and gas industry executives …
R
– Thu May 12, 11:43 am ET
WASHINGTON (Reuters) – The head of Exxon Mobil (XOM.N) stopped short of blaming speculators for the run-up in oil prices, but he told Congress on Thursday that based only on the fundamentals of supply and demand, the price of oil should be in the range of $60 to $70 a barrel.
"When we look at it, it's going to be somewhere in the $60 to $70 range if you said: 'If I had access to the next marketable barrel, what would it cost?" Exxon's CEO and Chairman Rex Tillerson told the Senate Finance Committee in response to a question about the influence of speculators on high oil prices.
Exxon says oil barrel should be in $60-$70 range
he just said this ? on TV
Reuters – Exxon Mobil CEO and Chairman Rex Tillerson speaks as he and other top oil and gas industry executives …
R
– Thu May 12, 11:43 am ET
WASHINGTON (Reuters) – The head of Exxon Mobil (XOM.N) stopped short of blaming speculators for the run-up in oil prices, but he told Congress on Thursday that based only on the fundamentals of supply and demand, the price of oil should be in the range of $60 to $70 a barrel.
"When we look at it, it's going to be somewhere in the $60 to $70 range if you said: 'If I had access to the next marketable barrel, what would it cost?" Exxon's CEO and Chairman Rex Tillerson told the Senate Finance Committee in response to a question about the influence of speculators on high oil prices.
Comments
-
/shrugs
i hope u recorded it cause the oil companies gonna make sure that doesnt get any burn -
Exxon cleared 11 billion in profits for the 1st quarter of course they know that ? overpriced
-
this dude gonna get offed if he speaks up like this
-
So can someone explain to me why the prices should be lower, but aren't? I'm not well versed in economics.
-
So can someone explain to me why the prices should be lower, but aren't? I'm not well versed in economics.
you want the democratic answer
the republican answer
or the truth??? -
you want the democratic answer
the republican answer
or the truth???
Preferably all of them if you have time lol. But most importantly the truth. -
Preferably all of them if you have time lol. But most importantly the truth.
basically ppl are afraid of a future shortage of a supply of oil. so they are buying future oil contracts at higher prices
now and thats inflating the price of oil.
the price was a 113 a barrel last week,but there was an increase of oil reserves on wedsday
and barack obama raised the requirments for how much money you gotta put up to buy oil contracts
for wallstreet traders on tuesday and then oil dropped to about 98$ a barrel. but now some oil refineries
might go off line as a result of the floods so oil is gonna stay in the 95-105 $ range for awhile. -
___________$60-$70 a barrel for oil is still a very very lucrative price for oil & incentive for oil companies. A lot of ppl think that if oil is high oil companies will always profit - thats a NOT true, many oil companies that are large & integrated like ExxonMob have a much higher costs wen oil soars b/c their downstream oil operations (refining, gas stations) have a hard time with increased costs. An upstream oil co. wants higher oil prices b/c all an upstream oil co. does is take the raw oil out of the ground to sell, but that oil still needs to be refined tho, a mid stream oil co. is anCOSIGN THATS WHY I RIDE A BIKE TO THE MARKET NOW oil driller, transporter or pipeline - all they do is transfer the oil for them higher or lower oil prices dont matter so long as oil companies are producing (unless ur a midstream co. that supplies to the little guys in that case high oil prices might mean theres no hope for ur company...) a downstream oil co. is a refiner or gas station, they have to buy their oil from the upstream (or in some cases mid stream) oil guys & then they refine it & sell it. If the price of oil is high downstream oil co.s feel it the worst then their job becomes much harder & much more expensive thus crippling profits (for example Conocophillips, b/c they have many many downstream operations in 08 they lost 15 billion dollars wen the price of oil peaked b/c their costs were so excessive as a result) as a downstream oil co. u want oil prices lower.
For ExxonMobil it doesnt really matter if oil is high or low, they are so well structured that they can churn over the highest profits of any company on earth (rivaled SION DA GOATonly by Walmart & GE) b/c they have the largest reserves of any oil corporation. For Exxon tho, given their advantage with oil distribution, if the price of oil falls they can & will make more money b/c then everybody else can also buy oil & use it.
$60-$70 dollar oil is a very good price.
The price of oil is higher b/c of the demand for oil & the hardship in the middle east with the war & everything. I think however that the recent drops in oil are coming from the response to Osama's death cuz now i think the market believes that the U.S. will be leaving the middle east cuz they "got what they came for". -
smh @ me being able to buy a barrel of oil with the amount of money it takes me to fill my tank.
-
Preferably all of them if you have time lol. But most importantly the truth.
The politics of the pump
A rhetorical blowout
America’s politicians cannot control the price of petrol—but they still try
May 12th 2011 | WASHINGTON, DC | from the print edition
*
*
THE last time the price of petrol (gasoline) was at its current level, Barack Obama observed in March, “you had all kinds of slogans and gimmicks and outraged politicians…The truth is, none of these gimmicks, none of these slogans made a bit of difference.” Yet as the petrol price again nears the fearsome threshold of $4 a gallon, America’s politicians, including Mr Obama, are at it again, resorting to exactly the same sort of theatrics, with equally meagre results.
The reflex is understandable. According to this week’s Economist/YouGov poll, 80% of Americans consider the increase in the price of petrol a very or somewhat serious problem. Fully 68% claimed to be driving less as a result; 43% said they were cutting back on other spending to pay for petrol. Some pundits reckon the re-election prospects of Mr Obama and many members of Congress hinge on the pump price, as much or more than they do on the unemployment rate. Mr Obama himself implied as much at a recent fund-raising dinner in California, when he said that rising prices were weighing down his approval rating.
No wonder, then, that the Republicans who run the House of Representatives have dusted off one of the slogans the president was complaining about: “Drill, baby, drill”. They claim, quite inaccurately, that the dollar-a-gallon rise in prices over the past year is somehow a result of the administration’s caution in approving drilling permits and opening new territory for exploration following the massive oil spill in the Gulf of Mexico last year. (The real culprits are the strong global growth rate and turmoil in the Middle East.) In an attempt to force the president’s hand, the House has passed a series of bills setting an accelerated timetable for new lease sales and speeding up the process of applying for drilling permits.
Related topics
* Accidents and disasters
* Gulf Coast oil spill
* Oil spills
* United States
* Barack Obama
It is true, although hardly surprising, that the government is issuing permits to drill in deep water at a much slower pace than before the spill. It is also true that there is significant scope to expand America’s output of oil and natural gas: by the equivalent of 4m barrels of oil a day—roughly a fifth—by 2025, according to a study commissioned by the American Petroleum Institute, a lobby group. But America’s oil output is already growing, for the first time in decades, despite Mr Obama’s supposedly ruinous policies. Moreover, as API’s study suggests, it will take a decade or more of exploration and development to bring new offshore basins into production. Anyway, as Mr Obama keeps pointing out, even in the rosiest of scenarios, America will still be consuming far more oil than it produces (it currently produces 8m a day and uses 18m). Drilling, in short, is neither an immediate nor an adequate cure for America’s addiction to oil.
But the Democrats’ preferred remedies are even less effective. They propose stripping oil firms of various tax breaks—something that could not possibly lower the price of petrol, but might make angry motorists feel better nonetheless. Happily, the changes they have in mind are too inconsequential to deter much investment either, given the high price of oil, although they could dent spending on natural gas. Mr Obama, meanwhile, has set his sights on speculators, a habitual if elusive scapegoat, creating a special new task-force to hunt them down.
Yet as Paul Bledsoe of the Bipartisan Policy Centre, a think-tank, points out, the most effective step to protect Americans from rising petrol prices has already been taken. In 2007, as the oil price climbed towards its previous peak, Congress agreed to raise fuel-efficiency standards for cars for the first time in a generation. Last year the Obama administration tightened them further. By 2016 cars made in America should average 39 miles to the gallon, compared with 27.5 last year. That will save 1.8 billion barrels of oil, the government calculates, over the lifetime of the vehicles sold between now and then.
In September the administration will propose fuel-efficiency standards for the nine years from 2017. It is debating whether they should increase by 3% or 6% a year, which would translate into an average rating of 47 or 62 miles to the gallon by 2025. Mr Obama tends to talk more about flashier schemes to reduce America’s oil imports, from promoting electric and natural-gas-fuelled cars to developing high-tech new biofuels. But, mundane as it sounds, the best hope for America’s irate drivers is more of the same.
http://www.economist.com/node/18682298 -
Preferably all of them if you have time lol. But most importantly the truth.
Are Speculators Gouging Us at the Pump?
by Jerry Taylor and Peter Van Doren
Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.
Added to cato.org on April 20, 2011
This article appeared on Forbes.com on April 19, 2011.
PRINT PAGE
CITE THIS
Sans Serif
Serif
Share with your friends:
ShareThis
With gasoline selling at around $4 per gallon, the political hunt is on to track down the ne're-do-wells responsible. The primary suspects seem to be Wall Street speculators who, we're told, are gaming the crude oil futures market to create price increases out of thin air. It is a tale, however, told by an idiot, full of sound and fury, signifying ignorance.
The only way to intelligently navigate this discussion is to know a bit about how futures markets work. The least you need to know is that in futures markets one buys the right to purchase oil at a future date at a specific price from someone who is selling that guarantee. Most futures contracts are for one to three months in advance but are settled daily after purchase.
For example, assume that we buy a futures contract from you today for 1,000 barrels of oil maturing in August 2011 at $100 per barrel. If tomorrow the same August 2011 contract settles in the market at a price of $100.40, you will owe me $400. If the day after that, August 2011 oil settles at $99.60, I will owe you $400.
Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.
More by Jerry TaylorMore by Peter Van Doren
We will exchange money in this manner on a daily basis until the contract is up or until someone (perhaps even you) buys the other party out. At the end of August 2011 when final settlement takes place, contracts will either be settled in cash and retired or rolled over into another futures contract. Only 2% of futures contracts result in actual delivery of oil.
How do bets about the future price of oil affect current oil prices? They can do so if and only if those bets increase or decrease oil supply in the here-and-now through changes in inventory or production.
If the price for crude oil tomorrow — thanks to the speculators — is higher than the cost of crude oil today plus the cost of storage, then everyone (investors, refineries, your Uncle Phil) could make money by buying crude in the spot market, storing it somewhere, and guaranteeing its higher selling price through the purchase of a futures contract. This would reduce current supply and increase current price while increasing future supply and decreasing future price.
If this is going on we would expect to see some sort of inventory buildup. While crude inventories in the U.S. are increasing, they always increase at this time of year, and this year's increase is well within the normal range. More important, gasoline inventories are decreasing and decreasing much more rapidly than normal. Hence, there's no evidence that speculators are reducing the supply of crude or gasoline through increased storage.
Producers, however, could react in the same way to higher futures prices by decreasing current production to allow more future production at higher prices. Alas, we see no evidence of suspicious reductions in producer output that might give this story credence.
More formal statistical tests (known as "Granger-causality tests" to economists) examine the impact of traders' behavior on prices within futures markets. Do futures prices follow the bets taken by market participants or do those bets follow prices? A federal interagency task force undertook one such econometric analysis in 2008 and found that futures price changes from January 2000 to June 2008 preceded net position changes by any group of traders. An updated and more rigorous econometric study by economists Bahattin Buyuksahin and Jeffrey Harris found the same thing for July 2000-March 2009.
These findings undermine the claim that speculators' behavior increases gasoline prices. "The lack of even Granger-causality (let alone true causality) between positions and prices undermines the prospect that speculative trading has driven recent dramatic price swings in the crude oil futures market," concludes Buyuksahin and Harris. "Rather, we believe it more likely that both prices and positions react to the same factors, such as global demand and supply."
There is no need to repair to conspiracy to answer the question about why gasoline prices are going up. The loss of Libyan crude — about 2% of global supply — has reduced the amount of oil available in the market and gasoline prices track global crude oil prices.
Prices must necessarily rise to reduce global oil consumption because we can't consume what isn't there. How much do prices need to rise to reduce oil consumption by 2%? It takes a big increase in gasoline prices to get us to drive even a little less. Economists estimate that prices must rise anywhere from 10 to 20 times the percentage reduction in quantity to reduce demand enough to equal the lower supply. Thus for a 2% supply reduction, prices must rise between 20% and 40%. Average gasoline prices have risen 20% since early February, on the low end of what economists predict.
So put away the torches and pitchforks.
http://www.cato.org/pub_display.php?pub_id=13039 -
Preferably all of them if you have time lol. But most importantly the truth.
Eliminating Oil Subsidies: Two Cheers for President Obama
by Jerry Taylor and Peter Van Doren
Last week President Barack Obama responded to rising public anger over soaring gasoline prices by banging the drums for the elimination of various tax breaks enjoyed by the oil and gas industry. Although House Speaker John Boehner, R-Ohio, initially suggested that he might be open to President Obama's proposal, the House GOP leadership chose to answer the president's weekly radio address — which advocated elimination of those tax breaks — with freshman Tea Party Congressman James Lankford, R-Okla., who charged that the plan was about "hiking taxes by billions of dollars."
"The president may think he's punishing CEOs of big companies," said Lankford, "but his plan will hurt the everyday consumer of energy and imperil the jobs of millions of hardworking people in American-based companies."
First of all, let the record show that President Obama is right and the GOP is wrong about these tax breaks. They make the economy less — not more — efficient and do nothing to reduce prices at the pump.
Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.
More by Jerry TaylorMore by Peter Van Doren
Although the president hopes to eliminate eight specific tax breaks — which cost the Treasury $43.6 billion over 10 years — only three, accounting for $31.9 billion of that total, are particularly important. Conservatives have no business defending any of them.
The largest tax break at issue is a tax credit passed in 2005, which is available to all U.S. manufacturers. Oil and gas companies qualify for that credit, so they will likely deduct somewhere in the neighborhood of $18.3 billion from their tax bill over the next 10 years. Note that this isn't really an "oil subsidy"; it's a manufacturing subsidy that oil and gas companies — along with many other companies — enjoy.
Rigging the tax code to make investments in manufacturing artificially more attractive than investments in something else is an enterprise designed to harm non-manufacturers for the benefit of ... manufacturers. Conservatives who want government to leave markets alone have no business throwing their political bodies in front of this tax break. If their political rhetoric means anything, they would see the president's bid and raise him by calling for total repeal of this tax break for everyone, not just for oil and gas companies.
Another significant tax break allows companies to accelerate the deductions of the costs of labor and various other inputs associated with drilling oil or gas wells. Now, there's nothing wrong with deducting the cost of doing business from one's tax bill. In other industries these expenses would be capitalized and deducted over time as income is earned. But in the oil and gas sector, the tax code allows oil and gas firms to deduct 70% of these expenses in the very first year of a well's operation and the remainder over the next five years. These accelerated deductions are far more valuable to small producers than they are to large producers because the Alternative Minimum Tax for vertically integrated oil companies usually prevents "Big Oil" from using this tax break to its advantage. Still, it will likely cost the treasury $12.4 billion over the next 10 years.
Finally, small oil companies (not, incidentally, "Big Oil" companies) are allowed to deduct a specified percentage of their gross income from the taxes due from producing fields rather than simply deduct the actual costs of the capital investment over time. The subsidy arises when the deductions exceed the actual investment costs. This aspect of the tax code will cost the treasury $11.2 billion over 10 years.
There is no good economic argument for either of these tax breaks. They are simply statements that "we won't tax you for the cost of doing business like we would if you were in any other industry because ... we like you!"
Many conservatives argue that the elimination of these energy tax provisions and others like them for other sectors are tax increases. They are correct in a narrow sense. But in a larger sense they are incorrect because the elimination of such tax provisions makes the tax code more neutral and a more neutral tax code is a more conservative tax code.
Whether you call them "subsidies" or "purple roses," what's going on here is the elimination of a favor not provided to other tax-paying businesses. Such favors direct private investment to the favored businesses and away from the unfavored as market actors chase the artificially higher profits in the favored sector. And such favors are as much a part of big government as explicit appropriated spending. Tax breaks like this constitute big government on the sly. The size of government is best measured by its total effect on the allocation of resources — not by some crude and incomplete accounting of the government's tax bite.
The Republican charge that eliminating these tax preferences will increase prices at the pump is for the most part nonsense. Given stable demand, oil prices are determined by whatever factors increase or decrease production anywhere in the world. So the relevant question is whether elimination of these tax provisions — i.e. decreasing the profits of those producers who enjoy these tax deductions — will decrease production.
One possibility is that the composition of producers changes rather than the volume of production. Remember that these tax provisions apply mostly to small, non-vertically integrated companies. So eliminating these preferences reduces the relative advantage of being a small rather than a large producer, and mergers and acquisitions — not changes in output — will follow.
A second possibility is that the elimination of the tax provisions reduces excess profits in the oil and gas sector but not output because none of the marginal wells in the world oil market are located in the U.S. That is, given the large gulf between the market price for crude and the production cost of crude for the recipients of these tax breaks, all that will change is the value of mineral rights in the U. S.
A third possibility is that some wells in the U.S. have high enough costs that even with a price above $100 a barrel, investors won't bear the risk of production without the tax provisions. Now while this is a theoretical possibility, it is quite unlikely. In 2003, when oil prices were less than $30 a barrel, the tax preferences were worth just over 2% of domestic oil and gas production according to the GAO. Tufts economist Gilbert Metcalf calculates that even if domestic production subsidies were worth 10% of the current price of oil — far above what they are at present — the increased production that might result would only reduce oil prices by about 0.4%.
But oil and gas companies have a point when they cry foul. After all, about 41% of the net income earned by the oil and gas industry is already paid out in federal taxes compared to 26.5% for the rest of the businesses in the S&P 500. To be sure, this result stems, in part, from the narrowing of the income base because of the tax preferences. Regardless, the appropriate answer to Boehner's statement that oil companies "ought to be paying their fair share" is they already more than do so.
Defending and expanding tax breaks to remedy high taxes is a poor way to deal with this problem. The economic insight of the 1986 tax reform — widely credited by economists as one of the best pieces of legislation ever to come down the pike — is that eliminating deductions and reducing rates is better than leaving rates high but littering the tax code with inefficient tax breaks because the economic distortions caused by the latter are far greater than are those caused by the former.
In a perfect world, of course, there would be no corporate income taxes because they represent double taxation (once when the profits are earned and once again when those profits are distributed to real, live, taxpaying individuals). This unfairly punishes income earned by corporations relatively to income earned by non-corporate actors and introduces economic inefficiencies that reduce growth. But if zeroing-out corporate taxes is too much for the GOP to swallow, the least it can do is to ensure that oil companies are treated no differently for tax purposes than any other companies and to reform corporate tax codes accordingly.
So while Obama has the better of this debate in a narrow sense, he only earns two rather than three cheers for four reasons. First, there's the demagogic suggestion that oil companies are getting a relative free ride when it comes to their federal tax bill, which they most certainly are not. Second, he offers this tax loophole-elimination program as an answer to high gasoline prices despite the fact that eliminating these tax breaks will do nothing to reduce fuel prices. Third, by leaving the manufacturing tax credit in place and just narrowing its scope, he arguably increases — not decreases — the economic inefficiencies that follow. Fourth, he links elimination of oil and gas tax breaks with an expansion of the tax credits associated with renewable energy, which does nothing on balance to make energy markets work more efficiently (indeed, it probably makes matters worse). Even left-of-center energy activists like Amory Lovins of the Rocky Mountain Institute, Carl Pope, executive chairman of the Sierra Club, and green energy investor Jeffrey Leonard, chairman of the Global Environment Fund, think the time is ripe to eliminate all energy subsidies in the tax code and let the best fuel win.
If the left can entertain this idea seriously, why can't Tea Party Republicans? -
the hypocrisy is heavy in the world of politics
-
I told yall 6 months ago oil was going to sky rocket as soon as Ben Bernanke came out with QE2.
http://community.allhiphop.com/showthread.php?80024-Anybody-on-here-checking-for-QE2&p=2582366#post2582366
From november
It has little to do with speculators, greedy CEO's, the middle east or demand. When yo u monetize debt and create money out of thin air, prices go up, starting with food and energy. He will never admit to it because his job is to be the dollar cheerleader.
