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Oil in Australia, Oil Companies are Altruistic !!

If you believe the Oil companies in Australia – I can only speak of Australia – they are truly altruistic organisations whereby they buy the oil, the ship it here in bulk, import, store it, refine it, then cart it by road, rail and sea to a large number of outlets all for about 1-2 cents per litre profit.

For those people who don’t know what Altruism means (mainly for the oil companies, just in case)  here is the definition of Altruism

Now if I was a shareholder in these companies – I would sack the board and all of the C level executives  – who can make a profit and stay in business operating on such a small profit – however as usual this spin has little foundation in fact or reality – thats why it called Market Communication Strategy – or in the old days Public Relations or PR.

Look staying in business and making a healthy profit are normal – its what drives our society – well in the business sense – somehow the Oil companies have got all sensitive about it and feel they have to justify their profit somehow – or some fiction as to reality. Exxon the worlds biggest Publicly trade oil company made a quarterly profit of USD$10 billion on sales of $100 billion – it’s not just Exxon Mobil that’s raking it in. Royal Dutch Shell reported net income up 68% to $9 billion. Earlier, BP (BP) reported a $6.5 billion third-quarter profit and Conoco Phillips (COP) a $3.8 billion profit. Chevron-Texaco (CVX) is expected to post 53% higher earnings of $3.9 billion. See here for verification of Exxon Corporation 2007 full years profit – before the current scarcity speculation – Exxon Mobil Corp. on Friday, Feb. 1, 2008 posted the largest annual profit by a U.S. company, $40.6 billion as the world’s biggest publicly traded oil company benefited from historic crude prices at year’s end. Now from my previous entry here we see that there maybe as much as $30-$60 a barrel is made up of speculation on the price of oil – then suddenly it goes higher as soon as someone even hints or starts talking about scarcity – this truly is the absolutely worst ethics –  even though almost anything goes in business there should be such a thing as ethics – or am I just naive?  Yes David you are naive.

My dear old Dad – God bless him – used to work for the multi-national oil companies in Asia – he told me of an scenario whereby products where shipped from point A-B – say Singapore to Sydney a case in point –  but on the books of the transaction – the products went through every possible country division between the two points – each one making a profit on the way through!  Now could it be possible that a multi-national oil companies might do the same and make only less than 1% profit on the refining of the oil into many kinds of fuel, diesel, aviation jet fuel, and a myriad of petro-chemical products in Australia

The note here is in Australia – however the real money is made outside of Australia – now what if these oil companies selling back and forth between their various country divisions – worldwide and soon hey presto the price of oil on the Singapore markets is said to be $30-$60 more than it should be.

Now I know that this may not only happen to oil – so they are not alone here.

It comes back to scarcity by manipulation – from all accounts we have enough oil at today’s levels – confirmed by no less than the Secretary General of OPEC for at least 30+ years.  So in the meantime until the oil companies can find something else to monopolise – they make hay whilst we live in ignorance and fear.

Then you get the following from the ABC – who are they working for here, are they a PR organisation for the Oil companies ?  Softening us up – again fear, speculation and scarcity are at the forefront.

Now this brings us to another point – the price of oil in Singapore or wherever else it is benchmarked suddenly lifts by – let’s say $5 a barrel – then without taking a breath the price of petrol when it hits the pumps jumps accordingly – my concern here that the terms of trade for most companies is that all shipments bought before that $5 rise – which many may still be on the water – for the next 15-30 days – the profit for these shipments still on the water has now jumped $5 more a barrel. However when the price of crude goes down – it seems to take forever for the oil companies to come into a parity ratio?  Do you think they might be hoping against for the price to go back up and revalued all their shipments en-route again? – You can’t have it both ways guys – mind you the normal terms of trade is that the price should not go up until the next shipment is paid for from the oil fields.

This is not how normal companies buy products – it seems peculiar just to the oil companies – it is brazen scarcity manipulation of the price.

Now as we are seeing at the moment – the price of oil is reducing – perhaps because there is a lot of interest in the speculation and manipulation of the markets by the big players – who is bigger than the oil companies themselves – these oil companies are huge multi-national conglomerates – larger than many countries GDP – with loyalty only to money – no loyalty to anybody or any country – their only loyalty is to maximise return to their shareholders via increasing financial returns – ethics – what do you think?

They are not as bad – just on a grander scale and for a much longer time than the recent “creators” of the toilet paper – that is called Sub-Prime – they have just being doing it longer – over the years they have made and continue to make huge profits – underwriting the scarcity principle – we all live in fear – what if there isn’t any more oil so I can go out to work, to drop the kids off, to go to the mall to go to …..

OK one day there won’t be – but before that time – long before that time – we will have alternatives – cars powered by electricity, Hydrogen fuel cells maybe even solar charge, and various other sources of energy I cannot even conceive of . But once that happens the Oil companies will have lost their scarcity control – it will be transferred before that time probably to the power companies instead – we know that speculation on the price of power was one of the main reasons for the power crisis in California – OH dear – there’s another mess we are about to get ourselves into.

We not even taking into account what Carbon trading will do the price of almost every service and product, imported, exported and made / supplied in Australia – that’s a whole another issue to examine.

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