Did You Hear What Happened and What Didn't Happen?

Hi Everyone:

Well it finally happened about 10 days ago. The price for a barrel of crude oil dropped 15% to below $95. The price of oil has been on the rise for the past 9 or 10 months, hitting about $109 per barrel at its highest. Last week, the CEO's from the biggest oil companies were in DC to answer Senators questions as to why the prices were so high and why they should still receive the billions of dollars in subsidies, when the companies earn some $10 billion of profits each in the first quarter of 2011.

So what didn't happen? The price of gas has not dropped one cent. It has actually increased around where I live! How can that be? When we hear about a price increase in a barrel of oil, the price of gas increases immediately. But when the price of a barrel of oil drops, it takes weeks for the price of gas to drop a few cents. What's up with that? What else didn't happen? The CEO's didn't tell the truth. The CEO's of the oil companies blamed the gas price increases on anything and everything but the truth. The truth is that the demand for gas has decreased and that speculators are responsible for the increases in prices. Supply and demand economics mean nothing to them! In addition, back in 2004 0r 2005, the CEO's stated that they no longer needed the subsidies, due to the fact the a barrel of oil was selling for $55. But now when the price hovers around $100, the big oil companies say they need the subsidies to help them for more oil exploration.

Give me a break!!! If they didn't need the subsidies when oil was at $55/barrel, they certainly don't need it at almost double the price now. You would think that a company that earns $10 billion in profits in the first quarter, would use its own money for exploration. But nooooooo, they are so damn greedy that they will squeeze every drop of blood that they can get for as long as they can.

The bottom line here is that it makes no common sense to continue giving big oil companies any additional taxpayer money, period! It also makes no common sense as to why the price of gas doesn't drop when the price of crude drops. Don't believe them when they say it is a time lag factor of the oil not reaching our shores for up to 2 weeks before the price drops. If that was true, there would also have to be a time lag when prices of crude goes up. Again the correlation only works in their favor when the prices go up.

Til next week.

Peter