Don2 (Don1 Revised)
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BP posts record 2022 earnings to join Big Oil profit bonanza
Oil major BP's record annual profits follow bumper earnings from energy giants Shell, Exxon Mobil and Chevron.
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BP posts record 2022 earnings to join Big Oil profit bonanza
- Thread starter Don2 (Don1 Revised)
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TV and credit cards
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How do they do it?
Don2 (Don1 Revised)
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I can't prove it, but it seems like when they have reason to raise prices, they raise it a little extra. Then, when there are reasons to lower, they lower very slightly, not really enough. I suppose the exaggerated reasons allow them to propagandize around issues of tax and whatever else. Probably adds a lot of economic angst when Democrats are in charge. Maybe citizens could start leaving notes at the pump on how much profit these guys are making.
southernhybrid
Contributor
I'm not an economist and I don't know much about BP per se, but isn't profit primarily based on supply and demand? When it comes to gasoline, big oil companies know that Americans are addicted to driving. Maybe if we would stop making so many unnecessary trips, stop using drive through lanes at fast food restaurants etc. and bought more fuel efficient cars, BP wouldn't be able to raise their prices whenever they wanted.
For example, there are two Chick-fila restaurants in my town. People usually wait in the drive through lines for 20 minutes or longer just for that not so great food. I rarely eat that food, but when I have in the past, I go inside and I'm out in 5 minutes, instead of wasting gas and time waiting in that drive through line. It's usually a lot of large SUVs that are waiting in line, wasting fuel. What's wrong with people? Maybe we should blame human behavior as the primary reason that companies like BP can make such large profits.
For example, there are two Chick-fila restaurants in my town. People usually wait in the drive through lines for 20 minutes or longer just for that not so great food. I rarely eat that food, but when I have in the past, I go inside and I'm out in 5 minutes, instead of wasting gas and time waiting in that drive through line. It's usually a lot of large SUVs that are waiting in line, wasting fuel. What's wrong with people? Maybe we should blame human behavior as the primary reason that companies like BP can make such large profits.
TV and credit cards
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They're all seeing record profits. I knew they would and I've said as much at the beginning of the $7 gas thread or some similar thread perhaps. A person born yesterday might think that during times of inflation a merchant might struggle to keep prices down for the consumer while their supply and labor costs go up. A old cynic might think they'd use inflation as a cover to increase prices to the point sales drop off and only then start to pull back. I'm the latter.
Some months back Biden made a comment about a windfall profit tax on big oil. I guess that went over about as well as an Ilhan Omar tweet about Israel because I ain't heard jack about it since.
And big oil? They know their quarterly earnings reports are all going to make the headlines and they couldn't give a tinker's dam.
Russia cut supplies. That drove prices up. For other oil companies to not raise prices would simply mean they sell out and don't make as much--why should they be expected to leave money on the table?? They're not the ones causing the issue.
Don2 (Don1 Revised)
Contributor
But how does that explain their record profits?
Hunter's laptop did this.
TV and credit cards
Contributor
Is this a justification for price gouging? I didn’t create the hurricane but to not triple my roof replacement price when people have little choice but to pay it would be me leaving money on the table.
Or is it, whatever the market will bear? And is it fair to charge whatever the market will bear when you are selling what is for all intents and purposes a necessity?
It’s just plain greed.
Not to stick up for oil companies or whatever, but companies making decisions isn't analogous to Bob deciding whether he's going to buy his friend a beer or not. If you're asking individuals within a company to make a political push to not make billions of dollars in profit, you'll be waiting a long time. This is organizational and social dynamics, not greed.
If we want oil companies to behave differently we need policy and regulation, not wishful thinking that they'll suddenly stop acting in their own interests.
This is basic economics. Supply drops, the price rises until demand has been suppressed enough to match the lower supply. This happens in any market. In the long run the market will react by increasing production, but that generally can't be done in the short run.
Raising the price brings in additional supply.
If you don't raise the price what do you do, hold a lottery to see who has to live without a roof?
The market will adjust to the market clearing price even if there are only a few players in the market.
Don2 (Don1 Revised)
Contributor
I kind of feel like the supply demand curve is based on some reasonable theories of competition in a free market but the factors of controlling supply by a cartel, worries about risk of windfall tax and war or revolution, and price-setting by very limited *polies make it just a little off. So when we talk about small changes such as net profit increases from fiscal year to fiscal year, appeal to general market forces and regular old consumer-producer paradigm could be misplaced.
Don2 (Don1 Revised)
Contributor
Updated Gas Price & Oil Price Differential Research PDF
^This seems to substantiate the observation that prices spike during the kinds of incidents and what follows is prices coming down slowly, not quickly. There are a myriad of reasons persons may come up with, but the observation is still there.
^This seems to substantiate the observation that prices spike during the kinds of incidents and what follows is prices coming down slowly, not quickly. There are a myriad of reasons persons may come up with, but the observation is still there.