justaguy23456 asked:


1. Since finishing his term as U.S. President, George Bush Senior has worked as an independent consultant for the American Petroleum Institute (API) the trade association representing the U.S. petroleum industry including exploration and production, transportation, refining, and marketing. He negotiates contracts for oil imports into the U.S. and is paid a commission based on profit margin.
2. George Bush Junior is U.S. President.
3. Gas is over $4 and quickly heading to $5 a gallon.
Are these three things related or is it all just an amazing coincidence.

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truthwillnotbesilenced asked:


Do people understand that oil wells have a 15-20 year life cycle, that most of the wells producing now were drilled 7-10 years ago? You make an investment decision based on the budgeted return and nobody 10 years ago anticipated that oil prices would be this high now. As a result fewer oil wells were drilled. And now the cost of drilling for oil and for gas has grown exponentially (which is why I told you people to buy BRNC two months ago - I did, and I’m up $2.75/share) - a cost that typically is shown on the cash flow statement - and if it isn’t that means that if you read the rest of the 10-K you’ll see that the E+P firm’s reserves are down, which is why E+P companies trade at such low P/Es).

If you think “big oil is raping us” then go buy some stock in an E+P company - you might wonder why Wall Street isn’t following your lead though.
BS the point is that to stay in business they have to maintain their reserves - profits are way up but so is the cost to drill, thus what goes in goes back out - the main reason big oil stocks have come up is that they HAVEN’T reinvested all the profits in new exploration, they’ve furthered their forward integration (Mobil does more marketing) and they’ve bought back stock (again XOM) - XOM’s performance adjusted for the stock buyback isn’t any better than the broader market.
Seriously - read a CASH FLOW statement.

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