Why would oil companies purposely drill more to lower oil prices and the profits they make?

After all, Exxon posted the highest profit ever made by an American company in the last quarter.





http://www.time.com/time/business/articl鈥?/a>





When oil companies are making record profits as a result of current gas prices, why would they voluntarily go out of their way to drill and put more oil on the market just to lower gas prices???





If you were a company, would you go out of your way to lower your profit margin???





Or maybe you are being bamboozled by oil companies so they can use the current crisis to grab more land leases? Hmm?? Please, think about it.Why would oil companies purposely drill more to lower oil prices and the profits they make?
I don't know what makes people think these oil companies will drill and refine for the US alone. There's money to be made around the world, China and India would quite happily buy up US oil.Why would oil companies purposely drill more to lower oil prices and the profits they make?
The oil companies made record profits, because gas prices are high. But they still only make 7 cents for every dollar in sales. So if gas is $2.00 a gallon they make 14 cents profit. If gas is $ 4.00 a gallon they make 28 cents profit. So the dollar figure is larger, but their profit margin is the same and their taxes are also larger. If they buy the oil to refine into gas, their costs are greater. Again, Congress is trying to deceive us. Pharmacuetical companies average 14 cents per dollar of sales and Internet service providers average 20 cents per dollar of sales in profits, but you don't see Congress complaining about that.
You would normally think that competition would drive prices down, but because there are so few oil companies - and it takes a large amount to start an oil company that can compete with them, it makes sense for oil companies to act strategically. And, in fact, they have, they are already sitting on some 35,000 oil permits granted to them by the Bush administration. Also, there is no excess capacity at the refinery level - they have built few if no new refineries, and there would simply be no way to refine oil in the US even if they drilled for it here.
Because the high prices are forcing people to change their consumption habits. Oil companies don't want high prices to drive people to electric cars, severe conservation etc. Sure they like high prices, but at some point those prices will permanently damage the level of demand.





Other reasons may be they want to get it before another oil company gets it.
For the same reason that farmers try to grow more tomatoes. If they sell more oil they make more money. You don't understand economics and should take a real economics course in a real school instead of believing whatever lies you have been fed by liberals who hate America. Start by learning the difference between a profit and a profit margin. It's also possible that you already know better but are lying...
That's why you don't see oil companies drilling in areas that have already been approved and set aside for drilling.
They are losing access to oil all around the world!! Open your eyes instead of your mouth.
I don't think it's as simple or Machiavellian as you state, but if anyone thinks the oil companies have the US's best interests at heart...
If you wish, study USA history, congress has betrayed the people often.
Because they don't have to pay for it to be brought from a far away land.
Ummmm,well,the surged work,and now Iraq is safer then ever before .
You do know that all but $2.3B of Exxons profits were made in other countries from oil they wells that they drill in other countries because they can't drill in the USA.





So why would the oil companies drill in the USA??





Less costs, less risk factors, more stable government to deal with.





Do you really think oil companies would rather drill in Nigeria, Nuigini, Kazistan with all the instabilities in those countries, if they could just drill here in the USA.





Oil compnaies drilling and refinery costs would be much lower and risk factors would be greatly reduced.





Travel costs would be reduced, labor costs would be reduced... oil companies have rotating staff to their overseas refineries every 4-6 weeks and workers get paid according to the risk factors ranging from 1 to 10 for which country they go to work in.





So yes, oil companies have a more natural incentive to drill and in USA and get out of risky operations, much like they are doing since Chavez become leader in Venezula















Yes they would and for good reason, even though theyare making good money now they want to continue to make it in the future. It's like if you were a teacher just because you made a lot more money would you quit your job? (NO) you would want to make more. If we don't drill and we don't build nuke power plants we are done for. in the 70's they tried or did build a Nuke plant in sacremento Ca. and they shut it down even though they needed it so guess what Arizona which has nuke plants sold power to california the Lawers in Ca. said you can only charge so much per kilowatt of power the law was in california but arizona did not have that law so when they could sell it for more in there own home state californa law would not allow the utilites company to sell it for what arizona wanted for it. Guess what california almost went bankrupt and companies moved out cause they could not have reliable power sourse's. so Just like the oil companies they want to continue to make money in the future, they want a future paycheck. Just like the rest of us. The profits are not nothing, if they start drilling it will cost at least a million dollars a well to drill then where does there profit go? into building the future. And if they start building refineries it costs billions of dollars so say good by to all the profets, but if they could invest in the future to make more money of course they are going to do it. Then their profits ain't squat, got it??
No it is not in their best interest to drill and lower prices but the whole reason the price of anything goes up is because more people want it. If you were selling something and overnight the amount of people wanting to buy it doubled then wouldn't you sell it to the highest bidder at that point and wouldn't each bidder be trying to out bid themselves. This is how the price of things go up. Now imagine someone else down the street was selling the exact same item and it pulled away those bidders from you. Now the bids are getting pushed down because there are less people buying from you. Its an old economic theory called ';supply and demand';.
Think it through and you'll come to the conclusion that it's in their interest to find more oil. Which is why they wish to access offshore fields around America and in ANWAR. It will ALWAYS be in their interest to do that.





Like I said, think it through 'cause it's pretty clear that you haven't. You've come to a ridiculous conclusion that tells me you're very young or you have yet to encounter economic life in the modern economy in a realistic way.





Why does this matter? It matters because it makes you susceptible to the lies and demagoguery spooned out by certain politicians for gullible citizens to lap up. There's too many of these folks already. Don't be one of them.
Don't forget that the government got half that profit and didn't have to invest in searching for and extracting that oil from the ground.





Also note that selling more oil will lower the price because they still make a profit by selling more and charging less. People buy more when it costs less.





With high prices, people are buying less and that lowers profits as well as tax revenue.





The democrat run congress is already planning to raise gas taxes because they aren't making as much money when people use less gas. It's kind of a Catch 22 of sorts. The democrats won't less us drill to save money and make us safer at home, but they want us to use more gas to give them more money.





Oil is used in just about everything we use today from computers to clothing. We're never going to quit using it, so let's get it while we can. At the same time we can still continue to look for alternatives.