Why Is Gas Cheaper In OKC?

[Oil Capital]

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:

Yes I know all about the super-majors.  But a few points, if I may:  (1)  six competitors does not a monopoly make.  (2) These six are far from the only companies producing oil and they are far from the only companies refining oil.  In fact, I beleive the largest refiner in America is not on the list of super-majors. (See, e.g., Valero, Sunoco, Tesoro, Frontier, Lyondell) (3) Indeed, the companies on my list were ALL retailers.  They do not however, all have to buy their product from one of the super-majors.  There are plenty of other producers, both state-owned (such as Citgo) and publicly-held (Anadarko, Apache, Amerada Hess, Oxy, just to name a few off the top of my head.  And, as mentioned above, there are plenty of non-"major" refnining companies out there as well.

No, it's not a monopoly; it's a oligopoly, which is not perfect competition.  Anadarko, Amereda Hess, etc... are not large enough to supply oil to a great extent to large retail chains.  56% of oil production in the U.S. comes from six producers.  All those refining companies without a oil exploration arm have to buy oil from the large oil companies.  Big Oil has a known cartel, OPEC.  Cartels are explicitly created when you have oligopic conditions, though cartels are against U.S. law (though how do you prove when large corporations are acting in concert with each other?).  I never claimed it was a monopoly, but if you have problems with the term "near monopoly", then oligopoly is actually a more definitive term.

Indeed that would be more definitive.  And I do have a problem with the use of the "term" "near monopoly" when you were clearly attempting to imply something that was not the case.  If you meant oligopoly, perhaps you should have said oligopoly.  As to an oligopoly, I think it is very debatable whether a group of 6 companies collectively controlling only 56% percent of the market really constitutes an oligopoly.  (And by the way, OPEC does not consist of the six super-major oil companies; it is the Organization of Petroleum Exporting Countries)

Further on the 56% number you quoted.  I'm not sure the percentage of oil production in the U.S. that comes from the six producers is even relevant to the market we are discussing.  As you surely know, a large portion of the oil used in America is not from American production.  The relevant percentage we should be looking at is: what percentage of the feed stock used to produce the gasoline consumed in America was produced by one of the super-majors?  I have not been able to find that number.  If you have a source, I'd love to see it.

Here's some more on your 56% number.  It appears you may have made an error.  The source I was able to find says that as of 2004, 56% of total US oil production came from TEN, not six companies.  http://www.gravmag.com/oil2.html#producers

I stand corrected, ten companies supply more than 50% of US oil production, and I would argue that is very significant.  OPEC is a cartel that controls a significant portion of the oil in the World so my statement that there is not perfect competition in the marketplace is true; the price of oil would drop if not for OPEC and the controlling of how much oil is produced in a day.  And with ten corporations controlling a majority of the oil in the U.S., then it's a very good argument that there is most likely collusion occurring.  

So my point is still valid, there is not perfect competition in the marketplace so there is a difference between the oil industry and the services that 'Ze Artist offers.  (And I'd still argue that oil is a necessity whereas beautiful murals are more of a luxury).

http://www.huffingtonpost.com/raymond-j-learsy/taxing-oils-monopoly-pro_b_17262.html?view=print

You still seem to be confusing US oil prouction (which is what the 10 companies control more than 50% of) with U.S. oil consumption, for which I have not found and you have not shown any numbers.  But, you've also made it quite clear that your position does not rely on persnickety little things like facts.

I'm well aware of the difference of US oil production and US oil consumption and I'm not sure where I ever talked of consumption, but hey whatever you see.  If you think that the oil industry is a open competitive market, then power to you.  I don't know why you feel the need to attack me, but do your best and keep thinking 7-11 and Valero is going to keep your gas price low, but I'm not interested in explaining or clarifying any longer.

Then please explain to me why they (the few who "control" the market) don't keep prices consistently high.

[Oil Capital]

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:Originally posted by okiebybirth

quote:Originally posted by Oil Capital

quote:

Yes I know all about the super-majors.  But a few points, if I may:  (1)  six competitors does not a monopoly make.  (2) These six are far from the only companies producing oil and they are far from the only companies refining oil.  In fact, I beleive the largest refiner in America is not on the list of super-majors. (See, e.g., Valero, Sunoco, Tesoro, Frontier, Lyondell) (3) Indeed, the companies on my list were ALL retailers.  They do not however, all have to buy their product from one of the super-majors.  There are plenty of other producers, both state-owned (such as Citgo) and publicly-held (Anadarko, Apache, Amerada Hess, Oxy, just to name a few off the top of my head.  And, as mentioned above, there are plenty of non-"major" refnining companies out there as well.

No, it's not a monopoly; it's a oligopoly, which is not perfect competition.  Anadarko, Amereda Hess, etc... are not large enough to supply oil to a great extent to large retail chains.  56% of oil production in the U.S. comes from six producers.  All those refining companies without a oil exploration arm have to buy oil from the large oil companies.  Big Oil has a known cartel, OPEC.  Cartels are explicitly created when you have oligopic conditions, though cartels are against U.S. law (though how do you prove when large corporations are acting in concert with each other?).  I never claimed it was a monopoly, but if you have problems with the term "near monopoly", then oligopoly is actually a more definitive term.

Indeed that would be more definitive.  And I do have a problem with the use of the "term" "near monopoly" when you were clearly attempting to imply something that was not the case.  If you meant oligopoly, perhaps you should have said oligopoly.  As to an oligopoly, I think it is very debatable whether a group of 6 companies collectively controlling only 56% percent of the market really constitutes an oligopoly.  (And by the way, OPEC does not consist of the six super-major oil companies; it is the Organization of Petroleum Exporting Countries)

Further on the 56% number you quoted.  I'm not sure the percentage of oil production in the U.S. that comes from the six producers is even relevant to the market we are discussing.  As you surely know, a large portion of the oil used in America is not from American production.  The relevant percentage we should be looking at is: what percentage of the feed stock used to produce the gasoline consumed in America was produced by one of the super-majors?  I have not been able to find that number.  If you have a source, I'd love to see it.

Here's some more on your 56% number.  It appears you may have made an error.  The source I was able to find says that as of 2004, 56% of total US oil production came from TEN, not six companies.  http://www.gravmag.com/oil2.html#producers

I stand corrected, ten companies supply more than 50% of US oil production, and I would argue that is very significant.  OPEC is a cartel that controls a significant portion of the oil in the World so my statement that there is not perfect competition in the marketplace is true; the price of oil would drop if not for OPEC and the controlling of how much oil is produced in a day.  And with ten corporations controlling a majority of the oil in the U.S., then it's a very good argument that there is most likely collusion occurring.  

So my point is still valid, there is not perfect competition in the marketplace so there is a difference between the oil industry and the services that 'Ze Artist offers.  (And I'd still argue that oil is a necessity whereas beautiful murals are more of a luxury).

http://www.huffingtonpost.com/raymond-j-learsy/taxing-oils-monopoly-pro_b_17262.html?view=print

You still seem to be confusing US oil prouction (which is what the 10 companies control more than 50% of) with U.S. oil consumption, for which I have not found and you have not shown any numbers.  But, you've also made it quite clear that your position does not rely on persnickety little things like facts.

I'm well aware of the difference of US oil production and US oil consumption and I'm not sure where I ever talked of consumption, but hey whatever you see.  If you think that the oil industry is a open competitive market, then power to you.  I don't know why you feel the need to attack me, but do your best and keep thinking 7-11 and Valero is going to keep your gas price low, but I'm not interested in explaining or clarifying any longer.

Or, perhaps you'd like to take a shot at this one:  Why have gasoline prices failed to keep pace with inflation?  If the oil companies (or some other nefarious, undefined "they") indeed orchestrate prices, they seem to be singularly inept at it.