Why won't the gov. step in and stop the price fixing that is going on with the crude oil industry?

The market is too big for the government to control. There are many small independent companies that are willing to produce at market prices. The oil market is not fixed. The best thing that government could do to lower prices, would be to quit subsidizing certain companies and to quit taxing energy.Why won't the gov. step in and stop the price fixing that is going on with the crude oil industry?
why would they want to cut their own throats...its like the crack dealer offering a discount or insurance company actually paying for the ';protection'; you pay for...ain't gonna happen thanks to greed and Americans I guess aren't angry enough to do anything about it, just like all the rest of the crap that we don't do anything about...people in other parts of the world revolt, Americans just keep paying and complaining...we need our own version of Che...put the people back in charge leave the politicians to starve and go without health care....Why won't the gov. step in and stop the price fixing that is going on with the crude oil industry?
Because there isn't any.





Every time the Democrats trot this out, they have a big investigation, and nothing is ever found.





The Oil industry does not need to fix prices. Supply and demand alone is giving them $100 a barrel. Why would they need to fix prices?





Let me make this simple for you. Until about five years ago America was far and away the world's largest consumer of oil. Then India and China began to allow some economic freedom. Capitalisim worked, and people in India and China began to have money. With that money they buy things. Things that use oil, like cars. (Believe it or not people in China do not enjoy riding a bike to work in the rain and snow any more than people in New Hampshire do.)





China and India began to consume more oil, and buy more oil. Normally this would not be a problem. In the past, when demand increased oil companies simply went out and drilled more wells.





Problem is, thanks to the envoirnmentlaists, there are no places where you can drill new wells, certianly not in the United States. There is oil off of Florida and California, (the first off shore oil well was drilled off of a pier in California) and in ANWAR... but the enviornmentalists won't let anyone drill there. There are natural gas fields all over the Rocky Mountians that are off limits for drilling thanks to envornmentalists getting President Clinton to declare them national wilderness areas and such.





There is some deepwater drilling in the Gulf of Mexico (Chevron discovered a huge field there a few months back.) The tar sands of Alberta have lead to an absolute boom up there. Most of the international oil deposits though are in places where you don't want to drill, for political reasons. Nigeria and the Arab countries are politically unstable. Venezuela has a nutball in charge who is nationalizing everything so nobody is going to pour a couple of billion dollars into developing a field there just to have the Venezulian government steal it all. Same is true in Russia, they went and nationalized gas fields in Sibera that western oil companies had spent billions of their own money on. Nobody is going to throw good money after bad and try to develop oil there. There is no doubt a large amount of oil under Antartica, but the oil companies aren't even allowed to LOOK for oil there under the UN Antartic Treaty.





So, you have increased demand, and a fixed supply.





Simple economics dictates that the price will go up, and up, and up, and up.





The oil companies don't have to fix prices. They don't have to do anything illegal and risk jail time. They don't have to do a bloody thing. They are seeing prices go up, to levels higher than they had ever dreamed possible, thanks to the stunning economic ignorance of the enviornmentalists... the same enviornmentalists that have been trying to fight, vex, and frustrate the oil companies at every turn for over three decades. The oil companies are just sitting back, enjoying the irony, and laughing all the way to the bank.





If you want to blame someone when gas hits $5.00 a gallon, don't blame EXXON or Shell, go blame the Sierra Club and Greenpeace; not non-existant conspiracies full of unnamed people ';at the top';.





EDIT...The reason prices go up ';in case a hurricane hits the rigs in the Gulf'; IS supply and demand.


Oil is priced not by a conspiracy, but by the futures market. (NYMEX google it). (As an aside, you should be quite angry at your teachers for not telling you how futures and stocks and bonds work. How can they say they prepared you for the real world if they don't tell you how your own economy works? !! No wonder we have so many people who bought houses on stupid no doc, teaser rate, adjustable interest loans! This is a good book that will explain it to you in an easy to understand but accurate way. http://www.amazon.com/Street-Journal-Gui鈥?/a>





Simply, put a futures market is ';An auction market in which participants buy and sell commodity/future contracts for delivery on a specified future date. Trading is carried on through open yelling and hand signals in a trading pit. '; People agree to buy oil NOT today, but for future delivery...this is how companies can be sure that they will have the supplies they need. They buy the stuff AHEAD OF TIME (hence the name ';futures';). This is how they schedule deliveries, and lock in the price they are going to pay (or recieve) for what they are selling ahead of time. It is sound financial planning. Futures are traded months in advance, and the information is freely available.





Companies use this. Southwest Airlines used the futures market to lock in the price on gas for their jets on a long term contract a couple of years ago. This is one of the big reasons they are making money and other airlines are not, they locked in the price for their gas before it started to shoot up.





If a hurricane is heading towards an offshore oil field, that tells the traders that there is likely to be a shortage, so the price DOES go up, in anticipation of the possible shortage. That is exactly what the market is SUPPOSED to do. These guys look ahead and say ';Well if the hurricane takes those wells off line, that means there is going to be less oil out there for the next few months; and the price is going to be higher because of it.'; so the prices all go up in anticipation of the coming shortage.





Now I won't lie to you, there are a lot of people invested in the futures market for oil who are speculators right now. Most oil analysts think that the speculation has driven demand for oil futures to levels that are higher than the demand for oil itself is. This isn't a conspiracy, this is just people trying to make money playing the futures market. (A very dangerious thing for anyone who is not a professional investor to do.) Most people think that, if you took out the speculators, the oil price would be lower... how much lower nobody can say, but it is estimated anywhere from $10 to $30 a barrel lower.





Why does the price at your local gas station go up? Because your local gas station works on very thin margins (he makes very little profit on the gas he sells, he makes more off of candy, etc.). He uses the money you pay him TODAY to pay for the gas he is going to sell you tomorrow. (He doesn't get the gasoline he sells you for free. Stations are either franchises or independent, they have to buy the gas they sell you from the wholesaler... the big tanker truck that comes around and pumps it into his tanks.) If can't afford to not have gasoline to sell you, so if he anticipates a shortage coming, he can't afford to sell you gas for $2.50 on Tuesday when it is very likely he will have to pay $2.89 to his wholesaler on Friday to replace that gasoline.





Now there was a time when it didn't matter so much if an offshore field was taken off line for a few weeks, we used to have ';excess capacity'; built into the system. If there was a supply disruption in one place, you could increase production from somewhere else to cover the shortfall. However because of the continuing growth in demand, and the enviornmentalists fixing our supply, that excess capacity has vanished. EVERY source of supply is now critical, and EVERY source is producing a full capacity, (at $100 a barrel you think somebody is holding back on production?) so that is no longer possible. It IS supply and demand.





You might also be interested in this... it is a breakdown of gasoline taxes by state.


http://www.energy.ca.gov/gasoline/statis鈥?/a>





One last note... EXXON and the other companies generally don't own the oil fields anymore. 85% of the oil fields on Earth are owned by ';State Oil Companies';... i.e. the local government nationalized the oil fields. Pemex in Mexico, or PSDVA in Venezeula (they also own CITGO, bought it a few years ago) or SaudiARAMCO (Saudi Arabia). Most of the oil fields around the world were nationalized back in the 50s. The exceptions are ones in the USA, or offshore.
because those at the top are benefitting from it too.
Because the top guy (the president of the USA) is an oil man, you are funding his retirement. Keep filling it up. LOL
what does the govt. do? all i see on the news these days is how they can't manage funds and irresponsible spending of tax payer dollars
G has no control over international [mideast,uk, etc] corps , only US based. Also, an overwhelming preponderance of evidence would only prompt the G to take steps to bring about a claim of price fixing against a US based corp. that's a very serious charge in the business community. if established as true , it is indefensible [per se illegal] for the accused corp according to US laws.
The government (mainly the president) /does/ have a lot of investments in the oil industry. Why pay for the losses, when you're not the one suffering? -_-





I love our country, lol
Isnt that why we are in Iraq?