"Chuck Gould" wrote in message
ups.com...
On May 17, 11:00 pm, "Calif Bill" wrote:


Where is the new company going to get their crude?- Hide quoted text -

- Show quoted text -

That's *why* there's no competition. :-)

A handful of companies control most of the world's crude oil. Even
where wells have been nationalized (like the mideast) BIGOIL still
owns 49% in many cases. Since everybody is able to sell as much as
they want at whatever price they care to charge, (as long as there is
no consideration for the human misery that results), the incentive is
to help your competitors push prices higher rather than take advantage
of a competitor's high pricing to increase your own market share.



Big oil put really big bucks into developing the fields. The price started
escalating in the early 1970's. Remember that time? The good old boys oil
companies were ignoring the fact that the "Rag Heads" were sending their
best and brightest to Wharton and Stanford business schools. Those Arabs
decided they wanted more than the $0.25 a barrel they were receiving. Since
the Saudi and Kuwaiti oil is the cheapest to produce, they could make lots
of money. Their oil is the cheapest as there is huge amounts of gas
pressure on top of the oil pool, and they can drill a hole with a 12" line
and no pumps are required to get it out of the ground. Just a pump or two
to send it on it's way to the ship terminal. Both OPEC and the oil
companies are trying to maximize profit, but keep it low enough that it
does not trip the world into a depression. Which came close in 1975 era.
The non Wharton Arabs saw how much more money they could get and got greedy.