Motor Oil Cartel ? Price is a Ripoff.

Not a very technical subject, I confess.

What the heck is up with motor oil prices ? Are they waiting for a bailout?

Come on, someone has the market cornered.

Where's the new guy, coming in and undercutting the competition ?????

Something is way wrong with the cheapest motor oil being $2.27 a quart (Walmart) when crude has been down, down, down, for months.

We're being screwed.

Same ripoff with antifreeze by the way. $9.50 for gallon. Get real !!

Reply to
Noveau67
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Then there is the super anti freeze rip off. You hardly ever used to see 50/50 premix but now the shelves are full of it. You get half the actual antifreeze and they charge 80% of the price of a straight gallon of antifreeze.

Reply to
Ashton Crusher

The price of ethylene oxide, the benchmark raw material for antifreeze, was up for a good part of last year. It has begun to come down this year.

But I think that the prices we are seeing are inflated, even considering the raw material prices.

Reply to
HLS

Yes, the oil industry is a cartel or monopoly. Think about it. If you take all companies in any industry, it is a monopoly.

What new guy in today's economy is going to risk the tremendous startup costs of starting a new company, especially in an industry that faces as many challenges as the oil industry. For one thing, they have to find a new major oil field.

Reply to
Don Stauffer

Big oil like big anything uses government regulation to keep new comers out of the game. The problem isn't so much the start up costs to make something but the costs of regulation and the political time tables and conditions. They could spend millions and never put shovel in the ground and fail in the political approval processes. Even if they win approval the market window could have long since closed.

Plus any new comer isn't likely to get license to foul other people's property and waterways like the existing companies.

Reply to
Brent

Don Stauffer wrote in news:498073cd$0$89386 $ snipped-for-privacy@news.qwest.net:

Fully 85% of all the world's oil is directly controlled and distributed by governments. Only about 7% is directly controlled and distributed by private companies. If oil is an oligopoly (not monopoly), you can blame government greed for its revenues.

ExxonMobil, just to select one, had a humdrum margin of about 8% prior to the big runup in prices last year. Those margins have since returned, as oil has fallen again.

I suspect motor oil is still high at least partially because much of that oil would have been purchased through futures contracts. Converters are thus locked into whatever contract they bought during the price runup, and it will take the expiration of those contracts before their buy price goes down. Motor oils also move more slowly through the markets than gasoline, so it may take a while before the high-priced stuff runs out.

Reply to
Tegger

I would think someone with access to a bottling plant, say, some guy who owns it, and is bottling x, y or z product would ( or could) switch over to, or temporarily expand into, making and bottling motor oil, and selling it for a huge profit. Buy cheap oil, add additives, put into quart bottles, sell at marked just under the inflated cartel prices.

Obviously something is keeping this from happening, probably regulations set up by the cartel itself. Licensing, etc. Maybe they have to pay a huge fee to some agency just to get a license, etc....

Reply to
Noveau67

snipped-for-privacy@aol.com wrote in news:b7a8ee2e-aba6-41f1-9b6e-ad3bc9598d74 @w35g2000yqm.googlegroups.com:

What a brilliant idea. Bet nobody's thought of that one yet.

That part was really difficult until very recently, you know. And not much oil trades hands on the spot market compared to forward contracts.

Or the various governments that control 85% of the world's oil supply...

EPA approval is a big hurdle all on its own. It's one of the reasons nobody's built a new refinery in the US since 1976.

Reply to
Tegger

To clarify your statement: You are talking about who controls the crude oil reserves which is not the same as who controls the type of "oil" on the shelves at Walmart that the OP asked about. And presumably what it is you are saying is that if it weren't for government greed and inefficiency we would be much much farther along in our efforts to completely remove all those crude oil reserves from the planet. This is probably true.

-jim

Reply to
jim

Kinda been that way since the advantages of oil firing of warships became apparent. Sort of the first stealth weapons. Coal fired warships could be spotted when they were well over the horizon, from the enormous clouds of smoke. The oil fired burners smoked much less. And, oil had higher density so more room for shell and powder :-)

The Prize- the Quest for Oil covers well the government involvement in the WW1 era as oil's importance became clear.

Reply to
Don Stauffer

jim wrote in news:PKudnbVsUb2kXRzUnZ2dnUVZ snipped-for-privacy@bright.net:

That's true, but pricing all the way down the line starts with the crude oil producer's costs and efficiency. Governments tend to be dismal for cost containment and for efficiency.

Pemex is the world's poster boy for lousy management, although Petroleos de Venezuela is catching up fast, from what I understand..

Probably. But given that we have approximately 200 years of proven and probable reserves at today's low prices, and maybe 500 year's worth at last year's prices, I'd say it's unlikely we'll actually be able to exhaust the world's petroleum supply anytime soon.

Oil's not doing anything useful under the ground, but it's doing plenty useful above it. The more the merrier, I say.

Reply to
Tegger

The question was why have fuel prices dropped but not the oil on the store shelves.

Yes you are right but most of that oil is mixed with so much gravel, sand and clay it will never be economical to extract it. An anology would be that there is much more gold dissolved in all the oceans of the world than has ever been dug out of the ground or ever will be dug from the ground. Despite its enormous value nobody is even trying to extract that gold from the ocean. The reason is you would go broke trying to get it. Just because something is there doesn't mean you can get it.

With that logic I might be inclined to feel that if money is just sitting in your pocket since it is not doing anything useful I should be entitled to it.

-jim

Reply to
jim

jim wrote in news:N_SdnXlYesPcxB_UnZ2dnUVZ snipped-for-privacy@bright.net:

We are quite comfortably extracting epic quantities of oil now that were either inaccessible or uneconomic just ten years ago. Never underestimate the power of technology.

Yeah, aluminum's like that too. It's the 4th most abundant compound on earth, but most of it is too thinly dispersed to be of any value.

The stuff that IS easy to get at is a doozy, though. Without those aluminum cans in your Blue Box, recycling would be an even worse money-loser than it currently is.

A more apt analogy would be you strolling down the street one day and finding twenty dollar bills blowing in the breeze. You scurry around and pick them up, but eventually there are no more to be found. If you want more twenty dollar bills, it gets a lot harder: you have to go to work and earn them while doing labor for somebody who owns twenty dollar bills. He then gives you some twenty dollars bills in exchange for your sweat.

Few people go broke trying to get to their jobs every day, and oil companies similarly don't go broke extracting oil from the ground simply because it takes more effort to get at it than it used to take.

Never underestimate the power of technology. If we were still using oil extraction technology from 1859, we'd have "run out" of oil long before the 20th century hit. In fact, if we were still using farming technology from 1859, most of us would have died of starvation by now.

Poor analogy. The money in my pocket explicitly belongs to me and not you. If you try to take it away from me without my permission, I will shoot you or call the cops.

The oil in the ground also belongs to somebody by virtue of ownership of the overlying land, or of the mineral rights attached to the resources underlying that land. Unless you're Hugo Chavez, you can't just swipe that oil without permission.

Mother Earth can neither grant nor deny permission, nor can she make use of the oil on her own. She can't even shoot you or call the cops. Until we came along, Mother Earth was content to let the oil sit there like a boil on her butt. Well, we're popping Mother's boil, to our great benefit. And that ungrateful harridan doesn't even have the grace to thank us.

Reply to
Tegger

Not really, you just have to change how you deal with quart oil. I use synthetic oil at $6 something a quart but I never change the oil, I only add makeup oil after changing my by pass filters and regular filter... About a quart...

You outta check into it. I have 160,000 on my 99 Chrysler 3.3 and it still purrs like a kitten uses no oil and the oil on the dipstick doesn't ever look dirty.

My oil servicing costs $12 for a quart of oil and 2 filters.

I'm not pushing this particular brand just giving you the link for reference..

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Check out the links to the left on that page about oil secrets the big oil companies don't want you to know.

Reply to
KMullins

Yup and 10 years ago we were extracting oil that was inaccessible or uneconomic 30 years prior, and 40 years ago we were extracting oil that was inaccessible or uneconomic 60 years prior to that. Does the word convergence mean anything to you?

Lots of things have become money losers in recent months - its called a recession. Reduction in demand drives prices down.

If prices go down at the same time that costs go up they can become money losers and they do go broke. In the US there are more wells that are closed down because they fit this description than there are wells that operate profitably.

OK so I hit you over the head while you aren't looking and then empty your pockets. The point was that claiming that oil in the ground has no value is exactly like claiming the money in your pocket has no value. Your the one whining about 90% of the oil is in the pocket of some government. What are you proposing to do about it? Hit them over the head and take it?

-jim

Reply to
jim

jim wrote in news:GKudnfAKmdufZB_UnZ2dnUVZ snipped-for-privacy@bright.net:

You're confusing value with ownership. Having no ownership is not at all the same thing as having no value.

If you hit me over the head and take my money, you are taking something I own, which is quite independent of any value it may have to you or me. The concept of "theft" is predicated on ownership, not value.

Something can have ownership, but no value, such as most of the stuff you see at garage sales. Other things can have substantial value, but only if somebody manages to obtain and use it. The water in the lakes in Canada's frozen Northwest is valueless to us in the southeast because we can't economically obtain it.

Oil under the ground IS valueless until it's extracted (or becomes known to be extractable). Only then does it become worth anything, even though it might be owned by somebody all along.

Or we could stop /them/ from hitting other people over the head and taking it, which is exactly what Hugo Chavez just did, and what Mexico did in the '30s, and what Russia did to Khodorkovsky, and, and...

Reply to
Tegger

No that would be false. If I am walking by your house and stoop down and pick a dandelion from your yard you are going to have a tough time convincing the police to arrest me. They may even arrest you if they perceive that you may be a danger to yourself or someone else. Even you clearly understand this concept whether you say so or not. You introduced the concept of oil not having value unless it is used purely as a prelude to a call for seizing it from those who now control it. That would be no different than the justification I made for smacking you over the head and taking your money.

-jim

Reply to
jim

jim wrote in news:M8KdnREhU70rgh7UnZ2dnUVZ snipped-for-privacy@bright.net:

There are, of course, varying grades of "theft". Make that dandelion worth a million dollars and the punitive situation changes dramatically, but is still /totally/ dependent on the fact that I own the dandelion. My original statement remains valid.

No, I said it had no value while it was unobtainable. Different.

What?? I said no such thing. I said oil did no good under the ground but plenty of good once extracted.

You're the one who mixed up ownership and value by dragging theft into the discussion.

How you conflate robbery with the idea of oil doing no good while under the ground is beyond me.

Reply to
Tegger

a snippet from a Yahoo article I found today regarding prices of Gasoline in US.

" Job numbers are in free fall, which has led to unprecedented declines in miles driven by Americans.

Motorists cut their driving by 12.9 billion miles in November, down

5.3 percent from the same month a year earlier, the largest such decline of any November since monthly data estimates began in 1971, the Federal Highway Administration said this month.

On the surface, that suggests retail gasoline prices should be falling, but refiners are reading the same headlines and have aggressively cut back production.

Refiner cutbacks and the threat of a strike pushed gasoline futures up throughout the week on the New York Mercantile Exchange. "

Snopsis of above :

" have aggressively cut back production. "

Reply to
Noveau67

snipped-for-privacy@aol.com wrote in news:3d7f1750-8870-46ef-bf25- snipped-for-privacy@n10g2000yqm.googlegroups.com:

Or simple self-preservation. Oil companies remember all too vividly when oil touched $10 per barrel in the '90s. There's no point in producing yourself to death.

Reply to
Tegger

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