# News Distrust the oil companies!

1. Nov 22, 2005

### Blahness

http://money.cnn.com/2005/10/27/news/fortune500/exxon.reut/

So, oil companies make record profits, and gas prices hit record highs. Coincidence?

And for reference, how many people have seen prices go down more then 20 cents in the past month?

2. Nov 22, 2005

### Staff: Mentor

Of course it isn't a coincidence, it's economics 101 - but why are you saying that should be a reason to distrust oil companies?

edit: let me explain the math of that:

If you have a fixed profit margin of 20% and you sell gas for $1 a gallon, your profit is$0.20 per gallon. If prices rise, for whatever reason, to $2 a gallon, then your net profit is$0.40 - double what it was before.
Gas prices in my area are down something like 90 cents from their post-Katrina peak and below (due to seasonal forces) what they were right before Katrina.

HERE is the national average for the past year. A year ago the average was at $1.95, just before Katrina, it was$2.47, the post-Katrina peak was $3.06, and now the average is$2.20.

Last edited: Nov 22, 2005
3. Nov 22, 2005

### Blahness

Meh, that sucks.

Then again, taking advantage of peoples' fear of a natural disaster is perfectly legal, so... yea.

4. Nov 22, 2005

### Staff: Mentor

Actually, it has more to do with commodity traders in New York, Chicago and most other major cities around the world where contracts for commodities are bought and sold. The commodities traders work for the themselves and their companies, not the oil companies.