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Originally Posted by Edward64
Warhammer. From what I've read, oil prices is increasing not because of anticipated supply and demand 20-30 years from now, but because oil production capacity is (or close to) maxed out.
The temporary Katrina effect notwithstanding (ex. when it was $3+), the sellers can demand a higher price (currently at $2+).
I feel like you do that the oil companies are gouging us. However, I temper that with the thought that if the oil companies were losing money, we would say "tough luck, you've got too much expenses and should trim the fat". It doesn't seem as if the oil companies can win in this current environment, we criticize them either way.
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True, production capacity is close to maxed out. However, I disagree with a few statements, I do not believe that the oil companies are gouging us. They only make 8.5-10% return on investment which is extremely low. The people that make a killing are the speculators in the stock market. They are the ones who cause the price fluctuations in the price of oil based upon demand.
Also, our refinery capacity is not any different than it was 5 or 6 years ago. In many ways it is better due to process improvements refineries have made the last few years.