OK, this is my theory.  These daily jumps in prices are being managed - no surprises there.  However, I am convinced (talk about your basic conspiracy theory), that the current administration is creating this issue - let’s face it, who better with all their ties to the industry - simply because their ratings are down the tubes.  So, what better way than to create this situation, then HE can charge in on his white horse, rattle a lot of cages and before you know it, prices drop down to a more manageable level.  I mean really--how can Exxon-Mobil sit there with a straight face and declare a PROFIT OF $8.4 BILLION - and that is all they are reporting so you have to know it is probably way higher than that.......gee I wonder how much of that is now in the pockets of certain people in DC?  Hmmmmm

Anyway, the pseudo cowboy comes out of it looking like some kind of modern hero and his ratings stop plummeting cause, after all, who loves a hero more than the electorate??

That’s my theory and I am sticking to it!!

(when I can’t sleep at night, I amuse myself by thinking about this sort of thing...maybe amuse is the wrong word??)

With regard to ExxonMobil’s profits...think of it this way. Assume it costs about $25 to extract each barrel of oil out of an already developed oilfield. When oil sold at $35 per barrel (the price is set by commodities markets, not the oil companies), net profit dollar amounts were a bit on the lean side and no one complained.

Now that oil is selling in the $70 range, profits on each barrel of oil have increased dramatically. The profit dollars are large and they seem indecent and we complain. We’re paying more and they’re getting rich off us. They didn’t cause it, but I’m sure they don’t mind a bit. Nor do their shareholders. That may start to change some—the cost of drilling has tripled in the past several months. The profit margins on newer oilfields will be less, especially deep water ones, at least until the price of oil surges again.

Here is an excellent breakdown of how gasoline prices are set and who does the setting. Oil companies have much less control than you think.

Prices are going to be volatile for the foreseeable future. They’ll spike, recede, and spike higher, and recede, and spike higher than the last two spikes as demand for oil increases (and as international ‘incidents’ impact oil production/distribution), while oil production doesn’t increase enough to meet the demands. Saudi Arabia used to be the swing producer who could fix spot shortages. They’re not swinging much these days. There is only so much oil in the ground and we’ve used most of the easily available and best oil up. It’s never going to be the way it was.

We’re competing with the rest of the world for supplies that aren’t keeping up with world demand. Many of the oil exporting countries have seen their internal demand increase and, as a result, they aren’t exporting as much as they did. That represents an additional decline in what’s available for the rest of us. Competition will be fierce in the coming years and we’re going to pay through the nose for whatever we can get. This is just the beginning.

The current administration doesn’t help with their ‘conservation is a nice personal value’ attitude, but probably are getting a crash course in trying to deal with the problem on their doorstep...which arrived rather earlier than anticipated. If you think Iraq wasn’t part of their awareness program, think again. But we knew that, didn’t we? Unfortunately, they’ve screwed that up probably beyond repair. And I’ll bet the Big Oil companies weren’t innocently watching from the sidelines, either. They have *plenty* to answer for, but high gasoline prices isn’t one of them.

Politicians don’t want to tell us that we’re in trouble and prices aren’t ever going to go back to cheap levels. Politicians don’t get elected when they are the bearer of bad news. Democrats are apparently no better in this regard (See Chuck Schumer). No one wants to be the messenger because we’ll kill ‘em in the voting booths. Because we don’t really want to know the bad news—we’re the problem, not the oil companies.

Frankly, I don’t know how any policy maker is going to deal with it, without causing fear (panic) and anger. But someone’s gotta start trying. I do think Al Gore would have been far better at it than the current jerks in the White House. It’s easier to grasp and sell common sense policy when you’re not a greedy, war profiteering, corrupt gasbag who thinks war is the answer for everything.

There’s my partisan dig for the day.

Incidentally, did you know that the approximately $2 billion in oil company handouts the Prez announced that he’s erasing (out of the $14 billion passed in the energy bill) was actually earmarked for a Tom DeLay pork project? I find that immensely humorous.

Hey, didja hear about the REPUBLICAN SEX SCANDAL that’s breaking? Heh.