Quote :

"Pretty soon, the American price is the world price."

While the logic is sound that is not exactly true. The price for oil differs around the world. The NYMX quote is for Light Sweet Crude for delivery to Oklahoma.

Most Western Hemisphere oil prices are quoted as +/- NYMX. Just as many interest rates are quoted as +/- prime.

Quote :

"but here's something I don't understand. If the oil companies in the US purchasing the crude are having to pay a higher price for the oil, then how are they raking in the dough like this?"

Refining oil is basically a zero-profit industry. Oil profits come from owning oil feilds not from making gas. Basically they just make the gas to drive up demand for crude.

7/29/2005 4:13:01 PM

kwsmith2, yes of course. I left out transportation costs and oportunity costs (the oil is currently in NY, not Texas, so I can't sell it in Texas).

Quote :

"Oil profits come from owning oil feilds not from making gas. Basically they just make the gas to drive up demand for crude."

Which is what I've been saying. The only twist is that some companies which own oil wells also own refineries.

7/29/2005 6:03:06 PM