>>>>>>>If every corn producer sells at exactly the same price and there is no semblance of competition, then yes, I'd call them a cartel too - especially if their prices just happened to change all at the same time.
>>>>>>
>>>>>>They do because their prices are dictated to the global commodity market which corn is traded on.
>>>>>>The same is true of gold. Here's a simple test you can do at home. Go to a jewelry supply store and price a specified weight of gold chain. Write down the closing price of gold on that day. Go back to the same store a month later and price the same weight of gold chain and look at the closing price of gold on the exchange. You should not be surprised by the results.
>>>>>
>>>>>Where in that are you implying that there is lack of competition? If the price of a 14k Gold chain at all jewellery stores in city x is exactly the same at all times, then maybe there is something to talk about. But is that the case? Unlikely. The prices may be similar, but due to competition between stores, the prices will vary.
>>>>
>>>>There are differences between chains depending on the weave, carat, circumference and length, but if you compare the same items you'll see the similarity.
>>>>
>>>>>This is not true of gas at the pumps. The prices at all stations (at least here in Toronto) are exactly the same - to the tenth of a cent. And they all change at the same time. Where is the competition that the free market is supposed to engender?
>>>>
>>>>I'm not sure of the situation in Canada but I'll give you the reasons in America. Refined gasoline throughout the US is essentially the same two blends (summer and non-summer) as mandated by federal regulations. In California there are stricter blending regulations and higher taxes which add to the price.
>>>>
>>>>The price of gas is the following formula:
>>>> Light sweet crude on the global market
>>>>+ Refining costs
>>>>+ Distribution
>>>>+ Taxes
>>>>+ Marketing
>>>>+ Station markup
>>>>
>>>>The last 2 are the only ones which are controlled by competition because everything else is regulated. Here in the US you'll see this difference reflected by about 10-15c. For example, Chevron advertises the addition of Techron(tm) and they charge around a 10c premium. Arco doesn't advertise nearly as much as the bigger companies and as such tends to be cheaper. Costco is the best bargain around here as they'll typically come in 3-5c cheaper than ARCO. In addition, if you get an American Express business card through Costco you'll get a 5% rebate on all gas purchases.
>>>>
>>>>Gas stations do not make much on their gasoline, they make the vast majority of their profits on the quick marts and service stations. The next time you're in a gas station just ask a station owner about the price. The ones I've met are happy to explain.
>>>
>>>I know that, but it doesn't change the fact that at least here in Canada there is essentially no competition. You say you see 10 to 15c differences in stations around your city? Believe me, there is nothing like that here. Canadian Tire, Esso, Shell, Petrocan, Sunoco, it doesn't matter, all the prices read (for example this morning) 134.9 - all of them.
>>
>>According to http://www.torontogasprices.com/ there are 2 stations at 129.9. Again, I'm not familiar with the regulatory environment in Canada so I cannot speak for the price. I can only accurately explain the costs in America and it has nothing to do with gouging or price fixing.
>
>I was dying to find out where those 2 stations are, but all I get when I click the link is an error page. On Sunday, the price was 134.9 too, and because of things I had to do, I drove pretty much across the top of the entire city, and found all the prices to be 134.9. When I drove home (a littel further south), again everything I saw was 134.9. I'm sure the formula is similar in Canada, and I find it remarkable that the markup, which seems to be the only real area of oil company control according to your formula, are the same for all companies. How do you define price fixing?

In America there is a disparity of gas prices around 10-15c within a locality and 66c nationwide.
http://www.gasbuddy.com/gb_gastemperaturemap.aspx

In Canada it appears to be 24.1.
http://www.gasbuddy.com/gb_can_gastemperaturemap.aspx

Once again we're talking about a commodity whose price is controlled by a global market. The same thing occurs with gold and corn.

>>>>>>>Trying to pretend that prices at the pump just coincidentally rise by the same amount at the same time for all the companies is simply laughable.
>>>>>>
>>>>>>I have explained this is in another post. Not understanding the price relationship for commodities is ignorance. Continuing to believe in a conspiracy theory which has been over-investigated by multiple countries and proven incorrect is laughable.
>>>>>>
>>>>>>>Cartels are illegal in the U.S. and Canada, and it is very disappointing that they are tolerated by our governments.
>>>>>>
>>>>>>Damn those corn and gold and silver and oj and pork belly cartels!
>>>>>>
>>>>>>>I know that speculators are getting a lot of return on their investments, but that is not a good argument for allowing this sort of activity.
>>>>>>
>>>>>>Speculators are making a lot of money because they pulled their cash from other disappointing sectors like financials, the dollar and real estate backed securities, where many have taken a bath. When one sector falls another will rise because of the nature of the market. This too will pass as other sectors become better investments. Already Bernake is hinting towards a rate increase by September. That little bit of info is shoring up the dollar. Remember, a great portion of the oil runup is based solely on the dollar's fall. As it strengthens, oil will fall.
>>>>>>
>>>>>>>>Cameras and shoes are not commodities. You'd do better to compare corn or gold. You'll find that the prices of those stay very close and rise and fall with the market. Similar outrage can be seen about the spike in corn prices. Are corn producers a cartel also?
>>>>>>>>
>>>>>>>>>Free market? What's "free market" about every oil company charging exactly the same prices at the pumps. Do you find that when you want to buy a camera, or shoes? They may not call themselves a cartel, but I certainly don't see anything that remotely resembles competition among them.
>>>>>>>>>
>>>>>>>>>>In 2007 Exxon Mobile had $334 billion in expenses and $404 billion in revenues. Subtract out a cool $30 billion in taxes and what's left is $40 billion which is an 8.3% return on investment.
>>>>>>>>>>
>>>>>>>>>>http://finance.google.ca/finance?fstype=ba&q=NYSE:XOM
>>>>>>>>>>
>>>>>>>>>>There are 5,382,000,000 shares outstanding, so that $40 billion equates to $7.43/share or 8% based on share price of $92.87 on Dec 31, 2007.
>>>>>>>>>>
>>>>>>>>>>I'd say that jives quite nicely.
>>>>>>>>>>
>>>>>>>>>>There is no need to revert to the lessons we already learned in the 70s. Taxes and regulation are not the answer. The free market is the answer. A few cases in point.
>>>>>>>>>>http://www.siouxcityjournal.com/articles/2008/06/04/news/top/4e608d46402d5adb8625745e00110beb.txt
>>>>>>>>>>http://www.columbiatribune.com/2008/Jun/20080609News002.asp
>>>>>>>>>>http://sunpost.net/content/view/1997/190/
>>>>>>>>>>http://www.industryweek.com/ReadArticle.aspx?ArticleID=16495- The irony of me linking this is purposeful
>>>>>>>>>>
>>>>>>>>>>How about this in your neck of the woods.
>>>>>>>>>>http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/09/afx5096008.html
>>>>>>>>>>
>>>>>>>>>>More energy, of all types, benefits us all. High oil prices are the perfect way to get the ball rolling.
>>>>>>>>>>
>>>>>>>>>>>How does that 8.3 percent jive with this:
>>>>>>>>>>>
>>>>>>>>>>>Exxon Mobil, the largest oil company, reported at the start of this month a record 2007 profit of $40.6 billion, earnings that trounced any other company. Royal Dutch Shell reported the largest earnings of any company in Britain, at about $31 billion.
>>>>>>>>>>>
>>>>>>>>>>>http://www.iht.com/articles/2008/02/17/business/rnrgoilcos.php
>>>>>>>>>>>
>>>>>>>>>>>I still think this is the culprit:
>>>>>>>>>>>
>>>>>>>>>>>With all the money Big Oil is making - the top five publicly traded firms pocketed over $120 billion in 2007 alone - and with an election on the horizon, it's easy to see why.
>>>>>>>>>>>
>>>>>>>>>>>http://money.cnn.com/2008/05/06/news/economy/oil_profits_tax/index.htm?postversion=2008050612
>>>>>>>>>>>
>>>>>>>>>>>And now this:
>>>>>>>>>>>
>>>>>>>>>>>http://www.nytimes.com/2008/05/14/business/14refine.html
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>>>>First off lets make the giant leap of faith and suggest that oil could be taken out of the free market.
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>Do you expect the oil companies to continue to pour their billions of profits into further research and development of resources?
>>>>>>>>>>>>>
>>>>>>>>>>>>>Yes. Absolutely. their record profits this year (big double digits) compounded over their record profits (big double digits) from last year compounded over their record profits (big double digits) from the year before. Yep.
>>>>>>>>>>>>
>>>>>>>>>>>>The oil companies have re-invested and distributed those profits already. Have a look at their research and development budgets and their dividend histories.
>>>>>>>>>>>>
>>>>>>>>>>>>>>Do you expect the supply to increase or decrease?
>>>>>>>>>>>>>
>>>>>>>>>>>>>Stay the same. Maybe decrease some. I bet they'll keep working on supply since they are still making absurd profits on a strategic industry for most of the planet.
>>>>>>>>>>>>
>>>>>>>>>>>>You've got to be kidding. Please point to a real world example where supply has not gone down when a previously free market item was taken off the free market.
>>>>>>>>>>>>
>>>>>>>>>>>>>>Do you expect demand to increase or decrease?
>>>>>>>>>>>>>
>>>>>>>>>>>>>Decrease in the US. Eventually some people will not be so stupid as to buy huge new SUVs.
>>>>>>>>>>>>
>>>>>>>>>>>>SUVs are a small part of the demand.
>>>>>>>>>>>>http://www.eldr.com/article/politics/products-made-oil
>>>>>>>>>>>>
>>>>>>>>>>>>Do you expect the American population to decline anytime soon?
>>>>>>>>>>>>
>>>>>>>>>>>>>>Exactly what would you hope to accomplish by taking oil off the market and can you justify attempting that effort, given the historical results when this type of measure has been attempted previously. Price caps do not work, in fact, they make matters much worse.
>>>>>>>>>>>>>
>>>>>>>>>>>>>If this were an industry that was slightly out of control, then minor regulation or jail terms for abusers might work. As this industry has moved into the twilight zone of extreme price gouging of a strategic resource (it isn't just the arabs folks), nationalization of the industry makes a lot more sense.
>>>>>>>>>>>>
>>>>>>>>>>>>There has been a substantive worldwide demand increase, piss poor resource management, a weakening dollar and massive speculation as money heads from other falling investments into oil. There are many forces at work and just like before the market will sort it out.
>>>>>>>>>>>>
>>>>>>>>>>>>Last year the oil industry returned profits of 8.3% which is right in line with expectations. If there was gouging involved then they're doing an awful job.
>>>>>>>>>>>>
>>>>>>>>>>>>>>>What's wrong with this picture?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>"This is unsustainable and counterproductive," Mr Hayward said. "All it means is that we have less money to invest in new production."
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>According to the BP boss, the oil industry faces the dual challenge of increasing production and climate change.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>Oil prices this morning fell from Friday's record high after Saudi Arabia's oil minister Ali al-Naimi said the rapid increase in prices was "unjustified". Opec, of which Saudi Arabia is a leading member, is insisting that the oil market remains well supplied despite the surge in prices.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>However, according to a forecast by Goldman Sachs, the price of crude oil could reach $150 a barrel this summer. "Prices will plateau, not collapse," Jeffrey Currie, the head of global commodities research, told the conference in Kuala Lumpur. "Demand keeps going up but supply can't keep up."
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/09/bcnbp109.xml
>>>>>>>>>>>>>>>http://www.reuters.com/article/topNews/idUSWAT00963020080609?feedType=RSS&feedName=topNews&rpc=22&sp=true
>>>>>>>>>>>>>>>http://www.breitbart.com/article.php?id=D916O20G4&show_article=1
>>>>>>>>>>>>>>>http://www.breitbart.com/article.php?id=080609171236.r6lvrx2s&show_article=11
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>Hmmmm....
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>Every time a market analyst forecasts rising oil prices, it happens. Amazing that they are never wrong. Yet there doesn't seem to be any more demand that a year ago. No less oil available than a year ago either. I'm with the oil minister on this one. Time to take oil off the market?