black gold
Why is oil so expensive? I wanted to know myself and I did the smallest amount of research possible to try to find out.
Its aparently pretty easy... Supply and Demand. The supply has not gone up, but due to china and india begining to use gas and oil, the demand does go up. High demand, low supply and bam! High prices. "But" you will say " Big oil has posted record profits across the board." Indeed they have. however, Profits and profit margins are not the same thing and yet, one is perhaps a more fair way to judge a buisness than the other.
For simplicity, we'll say profit = total revenue - total expense. In the case of the oil company conoco phillips they made $3.3 billion dollars in profit. However, their profit margins are only around 3.5%.
Profit margins, as the link will tell you, = revenue/cost. So lets do the math shall we? If conoco phillips made $3.3 billion in profit, and that represents 3.5% of their investment, then they invested...
$94 billion dollars.
Now, I don't really sympathize with them or anything, but I will say that I can make more than 3.5% on an investment... its called a SAVINGS ACCOUNT. (Which, by the way, if you want an ING account, just ask me and we can both make a few bucks) So if you are mad about oil companies, I suppose you are really only mad about them being so rich in the first place.
Now, I have been told that Oil Refineries which may or may not be controlled by Big Oil (so lets call the refineries "little oil") might be the culprits. Their profit margins might be closer to 20 or 25%.
anyway, im too tired to research anymore. You do it.