US boom in oil production.

[Think4Yourself]

Originally Posted by thecoalman

Why would they be sitting on profit if there wasn't a reason?

The price is going up but if they produce more than they have refinery capacity for then they'll have to sell just the crude to a different refiner which means lost profits (because they're not also getting the refinery profits). They want to produce just enough to max out their refineries and then let the rest sit as it continues to go up in value. That means they can continue to assure they get the maximium utilization of existing assets without having local prices go down due to a glut.

Essentially, there just isn't enough competition, the industry is over consolidated, because if a company tried to do this in the 1950's others would have jumped in but now when just four companies control most of the oil supply in this country we have an oligopoly market structure with very little competition.

[Mayiask]

The most oil is produced when the market is high and demand is up. As soon as there is a glut in the market the amount of oil produced will go down until the prices go back up again.

[thecoalman]

Originally Posted by Think4Yourself

The price is going up but if they produce more than they have refinery capacity for then they'll have to sell just the crude to a different refiner which means lost profits (because they're not also getting the refinery profits). They want to produce just enough to max out their refineries and then let the rest sit as it continues to go up in value. That means they can continue to assure they get the maximium utilization of existing assets without having local prices go down due to a glut.

Essentially, there just isn't enough competition, the industry is over consolidated, because if a company tried to do this in the 1950's others would have jumped in but now when just four companies control most of the oil supply in this country we have an oligopoly market structure with very little competition.

Then why do we have a boom on private and state property?

[TrapperJohn]

Originally Posted by Think4Yourself

Prices are set globally and there are about 2.5 billion more people consuming gasoline than there were 25 years ago. Supply will never be able to keep up with this level of demand growth. This is something any halfway intelligent analyst has been telling everyone for at least the last decade. It's not going to go down either with billions of 3rd worlders getting their first cars and motorcycles too.

Everybody except the Democrats on the Hill who wanted to investigate Bush and his big oil cronies in 2008...

[totsuka]

China will suck up a huge amount of oil so Canada will always have a customer.