Posted by Dinah on August 16, 2006, at 10:32:07
In reply to Re: only in the oil business, posted by Jost on August 15, 2006, at 20:10:35
I don't see they're any different from other companies.
There are environmental accidents from time to time, but I don't know the companies are negligent. The oil rigs are hotbeds of sea life. If you go deep sea fishing, the first place you head is the rigs.
We have a tremendous demand for oil. They attempt to fill a demand.
I suppose if I had my wish, it would be that oil prices weren't set by the same gambling instinct that drives the stock market. Rumors and the price shoots up. And of course, it is noted what the market will bear, I guess.
But like drug companies, oil companies take pretty big risks. Drilling is getting deeper and deeper all the time. Drilling is expensive. Dry holes aren't uncommon. There are risks in weather, the price of oil, environmental costs, etc. And as Mel pointed out, the reward as a percent of sales really isn't huge. And that's how businesses determine profitability. Not earnings, per se, but earnings expressed as a return on investment, or a percent of gross sales.
Gas sure is expensive now. I hate having to fill my tank. My brother has to travel to his job, and his weekly gas costs take up a pretty big percentage of his net pay. I feel sorry for him.
But I recall visiting the UK in the nineties and thinking the same thing about gas prices there.
poster:Dinah
thread:675260
URL: http://www.dr-bob.org/babble/poli/20060809/msgs/677051.html