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Help me to understand this...first of all, the elections are 8 months away so we really aren't "around election time" and I don't understand what it is that would make the prices go down. Do the elections make the refining process cheaper? Do foreign oil companies predicate their price on our election cycle? Do US companies sacrifice profits? If so why? Do the pharmacuetical companies lower their prices around election time? What about insurance companies? Do cars get cheaper as well?
I'm sorry, I just don't get the logic here.
For those who beleive... Wink, as I do, gas is the one product that affects everyone, we use it everyday, each and every single one of us (except for people who do not own a vehicle). I have always believed and still believe that energy prices are manipulated by governments, commodity markets, traders etc. Historically gas prices have eroded prior to a Presidential Election.

I also believe our government hides many things from the general public Freedom of Information Act:

Scope
The act explicitly applies only to federal government agencies. These agencies are under several mandates to comply with public solicitation of information. Along with making public and accessible all bureaucratic and technical procedures for applying for documents from that agency, agencies are also subject to penalties for hindering the process of a petition for information. If “agency personnel acted arbitrarily or capriciously with respect to the withholding, [a] Special Counsel shall promptly initiate a proceeding to determine whether disciplinary action is warranted against the officer or employee who was primarily responsible for the withholding.” [2] In this way, there is recourse for one seeking information to go to a Federal court if suspicion of illegal tampering or delayed sending of records exists. However, there are nine exemptions, ranging from a withholding “specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy” and “trade secrets” to “clearly unwarranted invasion of personal privacy.” [2] Thus, in all cases, the President has unlimited power in declaring something off-limits or necessarily classified in the concern of national safety.
quote:
Originally posted by Old Glory:
Do US companies sacrifice profits? If so why?


The Theory in general is that the large U.S. Companies sacrifice their profits (which can be determined by looking at the price of a barrel of crude vs. the price of a gallon of gas) around elections when they are wanting the existing party to stay in power.

The price of crude may also fall some, but the amount that the price of gas at the pump drops is significantly higher than can be attributed to the slight decline in crude.

As far as it being "near the election" I'd say it is very near the election in some states, such as Wisconsin, who has their primary today. In Wisconsin, you can vote for any candidate regardless of your party affiliation. so this is probably the day people in Wisconsin think about who they will vote for the most of any day this year besides election day.

http://www.lewrockwell.com/orig7/stojan1.html

http://www.consumeraffairs.com/news04/2006/09/big_oil.html

http://www.consumeraffairs.com/news04/2006/11/gas_prices112.html

We'll know if this theory checks out again in November. Here's my prediction. Gas climbs back up over 3.00 soon after the primaries are over. It hangs there thru the summer, then (as always happens during the fall) prices begin to decline. The trick will be to measure the ratio of gas vs. crude to see if the U.S. companies are taking less profit per barrel and to compare it to the ratio of last year when there was no election.

If gas is over 3.00 on Election day, I'll eat my hat Smile
I still don't understand why. I assume you believe that it is the out-going administration (I beleive they call them lame-ducks for a reason) that is manipulating the price of oil? What do they have to gain? Assuming you are right and gas always goes down the year of an election, what did Clinton gain from each of his two terms. Improved Legacy??? I don't think the price of oil did anything to change his legacy. Can anyone give me a why?
Sorry Jason, I responded to Art before reading your response to me. It is somewhat comforting to know that there is other intelligent life besides you two that believe this. Thanks for giving the answer to my "why" question. However, it still seems illogical to me. Those same profits that are "given up" in the name of encumbancy would yield a far better result if invested in advertising for the encumbant party. Do you really think that big oil thinks that 10% off the pump price will equate to more votes for the encumbant party than billions of dollars donated to the encumbant party? 527 orgainizations can except unlimited donations and speak to any cause as long as it doesn't support a particular candidate by name. Spend those billions on a cleverly crafted message and the impact would be 100's of times greater than temporary relief at the pump.
quote:
Originally posted by Old Glory:
It is somewhat comforting to know that there is other intelligent life besides you two that believe this.


First, that was pretty insulting.

Second, let me clear up my person beliefs on this subject. I believe that gas prices fall around the time of an election.

That's it.

As far as the why and how of it, I don't know and I provided that information in response to your question.

I think some of the confusion you have is in finding a motive for a price drop. The motive is that higher prices mean more anger at the incumbent. The incumbents in the elections we are looking at are the Republicans (notice I am not and have never suggested that the politicians have anything to do with this, they are just the alleged beneficiaries). During the Clinton era, it was the Republican congress, and since then it has been President Bush.

I think everyone would have to agree that having Republicans in control would be better for the oil companies than having Democrats in control. Democrats have specifically stated that they would like to impose windfall taxes on the oil companies. Since Exxon-mobil made $40 billion in 2006, I think losing even 10% of that to a new tax would far outweigh any advertising they might do (in 2007, they spent $40 million on advertising, that's 1/1000th of their profit).

Here's what an Economist had to say:

“As an economist, I cannot speculate on the politics that may be involved, but my recent research suggests that the recent drop cannot be explained by the drop in crude prices or the change in inventories alone. From an economic standpoint, therefore, it certainly raises questions in my mind as to whether the high prices we saw this summer were in any way justified by market fundamentals. I do not believe that they were."
I really did not mean that as an insult. I just have never heard the theory before and truly thought that it was specualtion only on the part of the two of you. I only meant that the fact that it is a theory held by more than just you, adds credibility to it.
Because no one stated it as a Republican or Democrat issue, I assumed that it was neither. To present it as a Republican Conspiracy clears up alot of my confusion.
By the way, oil always goes up in the winter months, election year or not, because the demand is higher. Be sure to make your comparisons to the same period of time during non-election years.
$3.19 a gallon this morning in NorthCentral Indiana.
Now don't take this for gospel but I have heard from local officials that this most recent rise in gas costs are not for political reasons but instead a recent fad starting in England and sweeping Europe and Asia as the greased back look of the 50's is back and the oil once used for gasoline production is now being sent for the making of Brillcreme and Vitalis.
quote:
Originally posted by Old Glory:
I really did not mean that as an insult.


Thanks, I guess I read it wrong, no worries
Smile

And remember, The conspiracy theorists think this isn't so much a "Republican" conspiracy (ok, well some of them do but hey) as a "Big Business" conspiracy with the Oil Companies looking out for their best interests by keeping the people most likely to leave them alone in power.

$2.87 a Gallon for regular here in Middle TN.
I agree with the conspiracy theory moreso than the Democrat/Republican theory, because BIG OIL knows that if they can throw enough $$ into the game, then they can do whatever they want, and they will. BIG OIL does not want to build any new refineries here in the US because they would not be able to control their profits the way they are now. Everyone has their hand in each gallon of gas that is bought. State taxes, Federal taxes, Local taxes, Exise taxes, everyone gets a piece of the pie. And lets not forget the billions upon billions of profits BIG OIL gets each month.
We all have theories, complaints, and points of view on the gasoline wars, but the one thing we can all agree on is that we are paying too much! I bought gas today in Morganfield Kentucky for $3.09 per gallon, but I hear you can buy a gallon in Saudi Arabia for $.25.
The oil business is very complex. It's much like the stock market.

Let's say you own a gas station. You buy a 1000 gallons of gas at $1.00 per gallon. You sell it for $2.00 per gallon. Your make a nice profit Smile

BUT, you call to order another 1000 gallons and it's now selling for $2.00 per gallon. There go your profits.
You must raise your price to meet the new wholesale price. While your $2.00 gas is in the ground the price drops to $1.00 per gallon. What do you do?

Refinery issues, pipline problems, political pressures, weather, and other issues affect the price of oil.

Oil is traded on the futures market (i.e gambling that it will go up or down. Mostly upSmile

The cost of getting the oil out of the ground and refining it into gas is pretty much static. The price that oil is sold at is dynamic.

The oil companies can't help but not making profits if the oil price goes up. Just think if toner was sold the same way.

There are some underlining issues that affect the price, but it's not a big conspiracy. IMO. It's just business.

The only thing you can do is invest in oil.
I have just begn a new business venture. With more and more cars becoming available in the Orient, China specifically, I have acquired 1,000 used rickshaws and will be deploying them in large metropolitan areas of the United States. I am now looking for workers to man them but you must have a green card or provide proof of citizenship.(unless of course Americans find this job below them,which at that time green cards will be optional)

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