Where the highest oil profits really coming from?
Alternative energy resources have become a large capital generator and every year are gaining more market share in many countries and profits for the many investors involved in renewable markets are increasing rapidly even thought the cost of producing renewable still been many times higher than the current most of the widely used methods for energy in the world. All the increase in capital gain in a emerging new market of renewable are been created because the world is been told that fossil fuels are getting day by day more “in short supply” and every time is more difficult to pump out petroleum, and the sales price of the scare energy source have increased rampantly.
When it is the cost of producing a product rises in any market?
The cost of producing a product rises when the elemental principal components to produce are costing you more. Also the sales price for that good or product should be increased, that way the marginal profits are not lost, and you can stay in business, simple common sense economy analysis.
Even thought, oil companies and many country leaders are making us believe that production and supplies are short and that is what is driving the highest cost in history of the most widely used form of energy, most of the world’s leading oil companies are posting records high PROFITS to their shareholders. How it is that possible? Some pieces of the story do not seem to follow a logical pattern.
When certain organization reports records highs in profits?
Sometimes it is by selling more products than the previous year. Other times profits are improved, introducing a new niche product that many rapidly adopt and sales sore. But when the profits for a product that has not been improved, and keep unchanged for many sales cycles are increase it just means, that you have found a way to lower the cost of producing the product, or that you elemental principal constituents components for that product are cheaper to get now. But how can you lower the cost of producing when your materials are scare? When something is scare, it tends to be more costly to get, isn’t?
Conclusion
Where the highest oil profits really coming from?
When an organization is reporting records high profits, the organization has lowered the cost of making its products somewhere, meaning in this case, that is very plausible that in reality at hand there are in fact a plethora of oil sources from where the oil companies are pumping out inexpensively all this time and we are all presently been fooled. Paying higher and higher energy prices for the world’s most widely used energy source, because it is that niche product that many rapidly adopted for the past hundred years and it is what actually still drives the world economy today. We use it for nearly everything, from transportation, electricity production to the plastics we used every day.
The money matters impact on the rampant increase in inflation has driven the world economy to the wreck it is today for the reasons energy (oil) prices have increased, while increasing the oil companies profits to record highs? When you stop and get to analyze the variables on the table, it seems that most of the increment in cost to the consumers sale price for oil, it just because the producers just stopped and said, hey this still a niche product, let’s just ask more for it. Getting more profits from the same old, unimproved product offerings, and still producing it at a very low cost in comparison to the current market sales price is where the highest oil profits coming from.
Resources:
http://www.nytimes.com/2008/02/01/business/01cnd-exxon.html?_r=2&hp&oref=slogin&oref=slogin
http://www.bloomberg.com/apps/news?pid=20601085&sid=a.dc7LpFWnek&refer=europe
www.cnn.com/2008/BUSINESS/02/01/exxon.profits.ap/index.html
news.bbc.co.uk/1/hi/business/7222414.stm
http://www.msnbc.msn.com/id/22949325/
http://news.bbc.co.uk/1/hi/business/7222414.stm
www.iht.com/articles/2008/04/29/business/29bp.php
www.guardian.co.uk/business/2008/jan/31/royaldutchshell.oil1
www.guardian.co.uk/environment/2007/feb/01/energy.oilandpetrol
