Oil price question

[tonyvid]

Probably a dumb question but where does the money from increased oil prices go to - the pumping and refining costs are probably similar now as they were 6 months ago(hurricanes not taken into account) so is it all extra profit to the oily companies, the oily countries or what?

[r988]

Into large bank accounts.

Its supply and demand that affects the price.

[MILF]

I agree, mostly to Gordon Brown though since Petrol in this Country is taxed to the hilt.

On a slightly different angle, how many gallons in a standard "barrel" of oil ?

[vixpy1]

The increase in Oil price goes to

a) the traders who own the oil that is being traded

b) The Oil companies

c) The Produceing nations


Errr, I think

[dieseljohn]

Is it possible to invest in oil, surely the way prices are going it would be a good idea?

[timmy30]

tonyvid said:

Probably a dumb question but where does the money from increased oil prices go to - the pumping and refining costs are probably similar now as they were 6 months ago(hurricanes not taken into account) so is it all extra profit to the oily companies, the oily countries or what?

Upstream ( the bit that gets the oil out of the ground ) makes lots of money.

Downstream ( the bit that refines and sells petrol ) gets less money

Government gets more money through $ per barrel licenses and of course taxation.

[driftwood]

MILF said:

I agree, mostly to Gordon Brown though since Petrol in this Country is taxed to the hilt. On a slightly different angle, how many gallons in a standard "barrel" of oil ?

One barrel of oil is the same as:

159 litres (about 80 large fizzy drink bottle)
35 gallons (enough to fit in the petrol tanks of about 4 cars)
280 pints (a lot of bottles of milk)

according to this site:- www.schoolscience.co.uk/content/4/chemistry/petroleum/knowl/4/2index.htm?oilcost.html



>> Edited by driftwood on Friday 23 September 16:48

[timmy30]

dieseljohn said:

Is it possible to invest in oil, surely the way prices are going it would be a good idea?

Yes Golmans Sachs are launching an ETF ( exchange traded fund ) that offers exposure to oil prices.

[tonyvid]

MILF said:

On a slightly different angle, how many gallons in a standard "barrel" of oil ?

42 us gallions I think was mentioned on the radio yesterday.

[MILF]

So on average there are 35 gallons in a typical barrel, which at the best part of £5 per gallon in the UK equates to £175.

And the crude unrefined stuff sells for $60, which is roughly £40 !! (Ok, I know thats a bit of an over simplification & they have to pump it, refine it & transport the stuff.....but you get my drift).

No wonder the Sultan of Brunai can afford 3 McLaren F1's !!

[timmy30]

MILF said:

So on average there are 35 gallons in a typical barrel, which at the best part of £5 per gallon in the UK equates to £175. And the crude unrefined stuff sells for $60, which is roughly £40 !! (Ok, I know thats a bit of an over simplification & they have to pump it, refine it & transport the stuff.....but you get my drift). No wonder the Sultan of Brunai can afford 3 McLaren F1's !!

Hmmm given that 75% of that £5 per gallon is tax, i.e. £1.25 per gallon pre tax, that's £43.75 per barrel, just £3.75 more than the crude price.

.....no wonder Gordon Brown can afford to p*ss it all away on welfare and warfare.