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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (339754)	6/7/2007 2:24:56 PM
From: TimF	Read Replies (1) \| Respond to of 1572630

After you pointed out that taxes were higher than subsidies for the oil companies, I just wanted to point out that they are not suffering. They just pass the cost along. My issue was not that they where suffering, but rather that they don't receive more money from the government then the government receives from them. It was a point of fact, not a plea for sympathy for "those poor oil companies". But just less than enough to meet demand, so that we get these price spikes. Don't you think that is a bit strange... it's not like they don't have the money. No, to the casual observer it might appear that they are colluding to keep the price high by limiting capacity. If the cost for such expansion was low, then even active collaboration could not keep it from happening for an extended period. If the cost was moderate, then collution might be enough. With the cost as high as it is, it might not be necessary. Investments in brand new refineries are such large "lumps", big all or nothing bets, that normal inertia, and the fact that the companies are making decent profits as is, might be enough to keep them from happening, esp when you add uncertainties in the long term oil market, both political uncertainties, and any possible concern about issues like peak oil, or alternative fuels. In any case new investment failing to keep up with demand is hardly remarkable. Mispredictions in demand are common, and when it takes billions of dollars, and and years (perhaps a decade or more when you include the planning and approval process) to bring a new facility on line. Remember that gasoline prices are only about the 1981 levels in real terms, and they where much lower in between then and now. Its not as if there has been sustained under capacity. Also the fact that federal and state laws require dozens of different blends of gasoline in the US has an impact. None of which is proof that there is no colluding going on, but nothing you've posted provides much of an argument for the idea that there is any significant amount of collusion.