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We want lower prices, NOT more taxes!!:nuts::nuts:

Taxing oil profits: Proceed with caution

Politicians are dying to get at more of Big Oil's billions, but analysts are torn about what that will do to prices or future energy sources.

By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: May 6, 2008: 9:56 AM EDT


scissors_money_cut.jc.03.jpg
Politicans want a windfall profits oil tax, but analysts are split over the effects.

NEW YORK (CNNMoney.com) -- Politicians are eying oil profits like a fat juicy glazed ham.

With all the money Big Oil is making - the top five publicly traded firms pocketed over $120 billion in 2007 alone - and with an election on the horizon, it's easy to see why.
The leading Democratic presidential candidates want a windfall profits tax to do various things, and although their plans differ slightly they generally want to use the money to give Americans a break from skyrocketing energy prices and jumpstart research into renewable energy.
House Democrats have also warned of punitive measures if these massive profits continue at the expense of American consumers.
But while the politicians present their plans, analysts are far less sanguine about whether or not a windfall profits tax would actually help soothe steadily rising energy prices and spur R&D for alternative energy sources.
A consumer rights group says that windfall taxes could actually raise gas prices as oil companies might attempt to squeeze refinery production to recoup their lost profit.
"It would have a fairly easy passthrough" to motorists, said Judy Dugan, research director Consumer Watchdog.
Oil industry: Hands off our cash. [more]
http://money.cnn.com/2008/05/06/news/economy/oil_profits_tax/index.htm?postversion=2008050609
 
I disagree. I say tax the hell out of them - a windfall profits tax is the best way. It should be tied to the price of oil just like the royalty relief program. They have dictated policy to this administration for the past 8 years and managed to get away with billions belonging to taxpayers due to the error in the royalty relief program. Tax them, put price caps on them, and regulate them. All this started with deregulation, it allowed price fixing and speculation. Today's prices have nothing to do with supply and demand, it's all about corporate greed and what the public is willing to pay - or rather what politicians are willing to let them charge for it. There is NO OIL SHORTAGE. Listen to OPEC, they aren't lying.

My paranoia tells me this is all a last-ditch effort by industry to make hay while the sun shines. Speculate, push prices up till consumers scream "do something" and the government and media manage to convince consumers that getting more oil on the market is the answer. How to do that? DRILL, DRILL, DRILL! Takes the focus off alternative energy research and development and opens up those restriced areas like ANWR. Forward-looking companies would be putting their money into alternative energy, not into more fossil fuels. And NOT into turning food into fuel. That's just WRONG. How about using cellulose...there's billions of tons of kudzu available.
 
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luv2read said:
I disagree. I say tax the hell out of them - a windfall profits tax is the best way. It should be tied to the price of oil just like the royalty relief program. They have dictated policy to this administration for the past 8 years and managed to get away with billions belonging to taxpayers due to the error in the royalty relief program.
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Do you have more information on this error? Are they exempt from a program that other industries are subject to? If so, fixing the error is better than putting a tax on a single industry. Is the windfall profits tax the tax the oil companies are exempted to?:confused: Sorry, the energy industry is not my strong point.
 
Silverbird said:
Do you have more information on this error? Are they exempt from a program that other industries are subject to? If so, fixing the error is better than putting a tax on a single industry. Is the windfall profits tax the tax the oil companies are exempted to?:confused: Sorry, the energy industry is not my strong point.
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Here's one link:

http://www.pbs.org/now/shows/224/royalty-relief.html

Information is readily available if you Google "royalty relief". The error was all over the news when it was "discovered" and admitted to by the government. The Secretary of DOI lost her job over it (she "retired" to spend more time with her family), as did the Director of MMS, the DOI agency that regulates the oil industry. Government and the oil industry are currently suing each other over it - it's not so easy to fix since it involves leases which are legal contracts, even though the leases violate the law. The royalty relief program was developed to encourage deepwater oil drilling during a period of depressed prices. Companies were exempt from paying full royalties...it's a complicated formula and was supposed to be based on barrels of oil drilled and the price per barrel of oil. Once the price of oil reached that target, royalties were supposed to kick in. A glitch in the lease contracts for a few years left that particular pricing clause out and the oil companies didn't have to pay royalties even though the price exceeded the target. Now they are making profits that far exceed their costs or what any reasonable profit should be and still not paying appropriate royalties.
The Government Accountability Office (GAO) has estimated that, depending on the outcome of a lawsuit by the Kerr-McGee Corporation, the government could lose a total of $80 billion over the next 25 years.
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There is no windfall profits tax. That's what is needed to recoup the money lost through the error in the royalty relief program, and to fairly tax the obscene profits on the current price windfall. If there was a windfall profits tax ...say if oil is above $100 a barrel they pay more taxes, you can bet prices would come down. Think it would be passed on to consumers? Think again. This is all being driven by speculation. Of course industry would try to pass it on. That's why price caps and regulation are needed, at least in the short term.
 
They pay more TAX, they pass it on to the consumer, just like over seas in Europe!!
Beyond that!!!:o

FUTURES MOVERS
Crude futures touch $122 as dollar weakens
Oil up a third day at an all-time high; analyst raises prospect of $200 oil

By Myra P. Saefong & Polya Lesova, MarketWatch
Last update: 10:55 a.m. EDT May 6, 2008

SAN FRANCISCO (MarketWatch) -- Crude futures reached a fresh record of $122 a barrel Tuesday as weakness in the U.S. dollar and global supply concerns fueled gains in oil prices for a third trading session.

Crude oil for June delivery traded as high as $122 a barrel on the New York Mercantile Exchange. It was last up $1.68, or 1.7%, at $121.65. Crude's new record followed the previous session's record closing of $119.97 a barrel.
The causes of the relentless climb in oil prices "have been chronicled repeatedly here -- demand from China and India, the falling dollar making oil an inflation hedge, speculation, OPEC supply restraints, supply threats in Iran, Iraq and Nigeria, and refinery bottlenecks in the U.S.," said John Kilduff, an analyst at MF Global, in a note to clients.
'Adjusted for inflation, oil is now above the $101.70 peak hit in April 1980, the year after the Iranian revolution.'
— John Kilduff, MF Global
On the currency markets Tuesday, the U.S. dollar traded lower against most of its major rivals. The dollar index fell 0.4% to 72.77. A weak dollar makes oil more attractive as an investment alternative.
"Adjusted for inflation, oil is now above the $101.70 peak hit in April 1980, the year after the Iranian revolution," said Kilduff. [more]
http://www.marketwatch.com/News/Story/Story.aspx?column=Futures+Movers
 
that's why it needs to be a combination of windfall profits tax, price controls and regulatory enforcement. At least for the short term. They need to be slapped, and slapped hard, just like they slapped us.
 
luv2read said:
that's why it needs to be a combination of windfall profits tax, price controls and regulatory enforcement. At least for the short term. They need to be slapped, and slapped hard, just like they slapped us.
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That sounds good, and could work if they don't cut production and drive the price higher. We arn't the only ones paying over $120 a barrel for oil, world wide price controls would be hard to implement. The Oil companies and OPEC have been down this road before. Let's do what Chavez did, that would work!!:D
 
nnuut said:
That sounds good, and could work if they don't cut production and drive the price higher. We arn't the only ones paying over $120 a barrel for oil, world wide price controls would be hard to implement. The Oil companies and OPEC have been down this road before. Let's do what Chavez did, that would work!!:D
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Just thinking out loud, Norm. With price controls, they couldn't drive prices higher. It worked before. The government lifted the price controls - deregulated. That was supposed to encourage competition and lower prices. Whoever believes deregulation leads to lower prices needs their heads examined. In every case, it's led to monopolies and higher prices. Cable TV, telephone, oil (how many majors now that they've merged?) are the main ones that come to mind. Sure they broke up ATT and created baby bells and some independents got in on the action. What do we have now? It took 20 years, but ATT got all the bells back, the independents can't compete and prices are higher. CATV monopolies in every city or suburb, no competition, they've got the market all divvied up and prices keep going up with no corresponding increase in service. Why am I paying almost $60 a month for 60 channels and I don't want or watch 18 of them? Why don't I have carte blanc channels for that price? As far as oil, you're right, international price controls wouldn't work. US price controls would, but what's needed is price controls on refined products such as gasoline. Then the price of oil would come under control. That's where to start. If they can't raise prices to keep that profit margin up, they're going to have to refine more of it to make it up. The oil supply drops, then the law of supply and demand comes into play in pricing, as it should. But the first step is price caps.
 
nnuut said:
Crude:
11:43.................$122.23.........+2.26 OPPS!!!:mad:
http://www.nymex.com/lsco_fut_condet.aspx?product=CL&month=June&cmonth=M&year=8&currPrev=C
This OIL Slick is getting really SLIPPERY NOW!! Maybe I should be in the "G"? Oh well!:worried:
NEW RECORD!!!!
Hey, Markets seem to be on the rise, something happened, what can it be?:confused:
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MASSIVE OIL COMPANY PROFITS and the fed propping up the market, that's what. Remove those.....see what you get.

As long as oil goes up, the market will be ok.....
 
With Oil hitting new highs there is a possibility that some are selling Oil stocks high (profit taking), then what do they do with the money? Could they be buying stocks? Nothing else out there to explain the little jump up today beside financials and that isn't that good. Just amazed me that with all the bad news the market was on the rise. Don't worry, it has cooled its heals a little.:cool:
 
Gas prices rebound after 5-day slide:(

Retail prices at the pump move back toward all-time high, according to AAA.

May 7, 2008: 6:49 AM EDT


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Rising gas prices have been pinching consumers.

NEW YORK (CNNMoney.com) -- Retail gasoline prices rebounded after falling for five straight days, auto group AAA's Web site showed Wednesday.
The national average price for a gallon of regular unleaded gasoline rose to $3.618, up eight-tenths of a cent from the previous day.
Gas prices have been marching steadily higher since the start of the year. The price at the pump rose to an all-time high of $3.623 a gallon May 1.
Drivers are now paying 19% more than what they were last year, when a gallon of gas cost on average $3.035.
The price of gas has been pushed up by the record crude prices. Crude futures hit a record trading high of $122.73 a barrel in electronic trading on Tuesday.
http://money.cnn.com/2008/05/07/news/economy/gas_prices/index.htm
 
Norm, as a investor hoping for the market to take the next step to bigger
and better numbers, what should I be hoping for concerning the price of
oil. My question may sound a little odd, but I hear conflicting stories about
the effect of oil prices on our economy. And lastly, what do you think will
ultimately bring the price per barrell down?
:confused:
 
squalebear said:
Norm, as a investor hoping for the market to take the next step to bigger
and better numbers, what should I be hoping for concerning the price of
oil. My question may sound a little odd, but I hear conflicting stories about
the effect of oil prices on our economy. And lastly, what do you think will
ultimately bring the price per barrell down?
:confused:
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SB this is good!!
BREAKING
NEWS
Oil prices fall on surprisingly strong crude and gasoline supplies. More soon.
http://money.cnn.com/?cnn=yes

Supply and demand, they say. Oil is a double edged sword. Sometimes a rise in Oil Stocks will stimulate the Market because there are commodities, and other times a rise in the price of Oil will crash the market for obivious reasons. Right now the price of oil needs to drop to stimulate the markets. This can happen because of excess inventories, lower consumption or the most controlling the value of the dollar. Most oil in the world is purchased with dollars, in other words countries need to buy dollars to buy oil, although some countries are trying to switch to the EURO due th the fall in the dollar this is the general policy when buying oil. When the value of the dollar drops the price of Oil in the USA goes up this is the main contributer to high oil now sense we haven't had a GLUT in years.
Today the Dollar is on the rise, I expect this to effect the price of Oil we shall see. As far as i'm conserned cheaper is always better for our economy!!
Here is an old clip from 2005 that is a good example of how the price of oil can effect Stocks:

Oil prices depress stocks
Deseret News (Salt Lake City), Jan 22, 2005 by Michael J. Martinez Associated Press
NEW YORK -- A surge in oil prices sent the major stock indexes to their lowest levels of the year Friday as investors overlooked a strong earnings report and a bullish outlook from General Electric Co. All three indexes fell for the third straight week.
Frigid weather in the Northeast and concerns over possible OPEC production cuts pushed crude futures substantially higher. A barrel of light crude settled at $48.53, up $1.22, on the New York Mercantile Exchange.
http://findarticles.com/p/articles/mi_qn4188/is_20050122/ai_n11502201
 
LOL! Looks like the exact opposite is happening this year. High oil prices are supporting the stock market now despite bad reports.
nnuut said:
Here is an old clip from 2005 that is a good example of how the price of oil can effect Stocks:

Oil prices depress stocks
Deseret News (Salt Lake City), Jan 22, 2005 by Michael J. Martinez Associated Press
NEW YORK -- A surge in oil prices sent the major stock indexes to their lowest levels of the year Friday as investors overlooked a strong earnings report and a bullish outlook from General Electric Co. All three indexes fell for the third straight week.
Frigid weather in the Northeast and concerns over possible OPEC production cuts pushed crude futures substantially higher. A barrel of light crude settled at $48.53, up $1.22, on the New York Mercantile Exchange.
http://findarticles.com/p/articles/mi_qn4188/is_20050122/ai_n11502201http://findarticles.com/p/articles/mi_qn4188/is_20050122/ai_n11502201http://findarticles.com/p/articles/mi_qn4188/is_20050122/ai_n11502201
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I wouldn't go quite that far, I think we are ignoring the price of Oil to a point, but a drop in price would really send the markets up, inflation low, prices of everything would drop and I'm waiting!:cool:
 
Oil takes a dip on surprising strong supplies

Futures for the June contract fall after a government report shows that crude inventories jump more than expected and gasoline stockpile grows.

May 7, 2008: 10:39 AM EDT

oil_barrels.ce.03.jpg
The government reported today on the supply of crude oil, gasoline and distillates.
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NEW YORK (CNNMoney.com) -- Oil prices fell Wednesday after a government report said crude and gasoline supplies were stronger than expected last week.
http://money.cnn.com/2008/05/07/markets/oil_eia/index.htm

Note: NYMEX site seems to be Out of Commission, I'll get an update ASAP!:confused:
 
Oil hits new record despite supply growth

After initial dip, futures for the June contract sets new mark of $122.81. Government report shows that crude inventories jump more than expected and gasoline stockpile grows.

Last Updated: May 7, 2008: 11:02 AM EDT

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NEW YORK (CNNMoney.com) -- Oil prices touched a new record Wednesday, spiking after an initial decline on a government report said crude and gasoline supplies were stronger than expected last week.

At 11 a.m. ET, U.S. light sweet crude for June delivery was down 4 cents to $121.80 a barrel after reaching a milestone of $122.81, 8 cents above the previous mark.
Just before the Energy Information Administration released its report, oil was up 21 cents at $122.05, then retreated as low as $120.54 before rebounding.
Crude oil inventories climbed by 5.7 million barrels from the week ended May 2. Analysts forecast a gain of 1.5 million barrels according a survey from Platts, an energy research firm.
At 325.6 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year.
Total motor gasoline inventories rose by 800,000 barrels last week, and are in the upper half of the average range. Gasoline inventories were expected to fall 500,000 barrels.
Distillate fuel - used to make heating oil and diesel fuel - dropped by 100,000barrels last week, and are in the lower half of the average range for this time of year. The research firm reported that distillates were expected to rise by 1.3 million barrels.
Refineries operated at 85% of their operable capacity in the week ended May 2, a slight decline from the previous week. This is less than the usual 90% capacity for this time of year.[more]
http://money.cnn.com/2008/05/07/markets/oil_eia/index.htm?postversion=2008050711
 
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