If demand exceeds supply, then how are the oil companies making record profits?

I would think they wouldn't be getting record profits, but only the same profits like prior to demand exceeding supply or even less profits.If demand exceeds supply, then how are the oil companies making record profits?
demand exceeds supply, therefore the price rises.If demand exceeds supply, then how are the oil companies making record profits?
That Econ 101 course was an 8:00 am class wasn't it?
Then, they can set the prices and be sure that cost of production and inventory will be far far later than the selling price at the pump.
If demand exceeds supply, customers are willing to spend more to outbid other potential customers.





Demand exceeding supply means there is more money trying to buy less product. This indicates higher prices for the raw materials to me. Higher prices are likely to cause more profits to be made by the seller, aren't they?
low supply equals high prices, like if a rare car is made like only 500 or so they are sold way above standard car prices i.e. low supply, high demand. plus the oil companies rip everyone off.
I suggest taking a course in economics.








Key phrase '; demand exceeds supply';








Boy that was tough








Thanks for the attempt at giving me an economic lesson. After reading it I stand by my statement that you need to go take a course on economics.








the reason for the profits is clear to see. Take away your biased view of the oil companies and you might for once see the truth.
I think oil is being sold on a futures market and when is Exxon-mobile going to pay windfall profit taxes in our country..? that alone should just about cover next year's war budget...heck we are fighting their war and our guys are dying to make the region ours...And now we have to worry about war in Iran!! will we vote a peace advocate to office or maybe a Ron Paul is best...If we don't have taxes to pay there can be no war and we can take care of our own local bridges and roads, schools(which are 90% funded locally already) so what else do we need government for? Oil company wars....?
That is the exact reason. It costs the same to get the oil and you get to raise your prices if you have more demand than supply. They would lose money if they do not have high demands because you lose money because you have oil going no were. It is a basic rule of economics
You need an economic lesson. When demand exceeds supplies, they raise prices to gain more profits. Businesses love it when demand exceeds supplies. That's when they make record profits.
You are correct--almost. The supply/demand curve presumes a free market. The oil industry is anything but Foreign oil is controlled by state institutions, not private enterprise--and those states openly operate as a cartel, and fix output levels as a routine practice. Our domestic supply is controlled by a half-dozen countries--all of whom are closely linked to those foreign governments (controlled outright, in the case of Citgo).





And the pricing/market structure is rigged--openly. There are a lot of factors-but here's the single biggest one:





When the market price of oil is raised,,, lets assume the oil companies raise the price of gas by the same amount (actually, they are raising it quite a bit mor--and I won't argue that. Just look at the numbers. Here's a hint: there are 55 gallons per barrel, so you can figure out how much extra the oil companies are paying. Add about 20% for tax add-ons. That accunts for about 1/2-2/3's of the increases we've seen).





BUT--in addition to the above--the oil companies only have to pay that higher price onabout half the oil they produce--that which they have to buy off the world market. They own all the domestic supply--and hence have zero increased cost on that part.





so--we've seen an increase over the last few years of between $1.50-2.00/gallon. Maybe 50 cents of that is due to the rise in world oil prices. The rest has been tacked on by the oil companies because they are totally unregulated and can get away with it.





And because we--as citizens and consumers--have been stupid enough to let them get away with it.





THAT'S why oil company profits are so high.
Since they have the same amount of supply, the price per capita (per barrel) has gone up. If someone has a product that increases its demand, but doesn't increase production on that product (supply), you will still make a bigger profit on the same amount of that product (oil), because its logical to set the price higher for a set amount of oil than before. Get it now?
they demand a higher price for their supply!!!








well actually the oil companies have explained that they need all that cash to explore and build more refineries to bring us more of their product , therefore lowering the prices for their product!!!





but there is some question about this because there hasn't been any new refineries built and the old ones are breaking down.!!





so there is a big mystery there that was just swept away and nothin else was done after congress supposedly got tough and questioned them!!!





me thinks, and so do a lot of other people that they are lying their a** off!!!





hey crabby blind guy!!!


FAR OUT FRIGGIN ANSWERE!!!


thats what i was trying to say, but i was home schooled!!!!