On Oil and Taxes

[mFFL03]

yesterday an OPEC official said oil per barrel for the US will go up to 170 in the next 6 months....

reasons?

future political bouts in the US
the declining US dollar

he states supply is not a problem, even Libya might cut back production because they believe Oil is over supplied right now.


this is a farcry what we were told in the beginning about supply and demand fundamentals....

speculation man, speculation..too many hands in the cookie jar

[scott]

They offer a choice of this option, or $6,000 cash.

From a budget standpoint these incentives must be calculated as being equal to each other.

Meaning that the gasoline incentive must equal to them about $4,000.

My guess would be that the two incentives are not designed to be equal to one another. I don't know how auto companies come up with their incentives, but given an "or cash", the "or cash" option seems to always beat the alternative fairly significantly (lower interest rate vs. cash being the most common). Also factor in how many people will take this option and either a) trade in their car without using the full benefit or b) just fail to use it for whatever reason (forgot to use their card, didn't drive 12,000 miles, etc).

In any event, I get pretty close to a $4000 NPV using your assumptions with $4 gas in year 1, $5 in year 2 and $6 in year 3.

[RandomGuy]

The logic is valid except for this.

Argentina = non producer of oil.
Mexico = large producer of oil.

It does not need to be subsidised because of the price they can bring it to market. They are not buying oil at market price. Argentina must.

You have ten apples. Each apple can be sold for profit at the farmers market for a dollar each.

You sell 8 of them at the market for $8, and the other two to your brother for 20 cents each.

You have essentially given him the $1.60 difference. Your brother has benefitted and got to eat two apples that he couldn't/wouldn't have otherwise.

This is no different than if you had directly given him the $1.60 and he went down to the farmers market with his 40 cents and bought two apples for $2.00

[ElNono]

I guess only a lawyer would try to skew the meaning of a word. I'll give you a break because this is a form of art you use without thinking twice.

OK. You say it's a subsidy. Who is being paid? A break in cost is not a subsidy. The customer getting gas at below market value is not a subsidy. Everyone involved on the business end is still making a profit. Just not a free market profit. Is the government of Mexico paying anyone to sell cheaper?

Obviously in this case the consumer is getting paid. They're the ones pocketing the difference between paying market value vs sub-market value.
And since Mexico does export part of their Oil production, selling at sub-market value definitely has a cost that Pemex is willing to absorb in the local market. Further, it makes Pemex less compe ive in the global market against other Oil companies that sell their entire inventory at market value.
Even if they're making a profit, their company is at a disadvantage because they just can't improve their earnings.

Think about it. If we could drill all our own oil at under $50 per barrel, and was mandated that only excess production beyond our nations needs could be sold at market value, we could have far cheaper gas today.

Mandated is the keyword there. If you're creating an artificial barrier (subsidies and price control are also artificial barriers) then you're automatically making your company to be at a disadvantage vs other Oil companies. These kind of distortions prevent, among other things, growth of the company. When Oil investors are looking to put money on a company, do you think they'll take the one with one or more barriers on their sales, or the ones that maximize their profits? Basic economy 101 here.

And, BTW, we can discuss semantics all day, but I'm NOT the one calling this a subsidy, Mexicans are:

Eliminación subsidio gasolina llevaría inflación México a 6 pct
Subsidio del 40 % a la gasolina que se vende a estadunidenses en la frontera
SHCP descarta eliminar el subsidio a la gasolina
Pide OCDE a México eliminar subsidio a gasolina

[scott]

I'm sorry, but I get pissy about some words being incorrectly used. Political pundits misuse the word subsidy and its various forms all the time.

I'm sorry, but I get pissy when people are obviously wrong, but continue down a path of re ation claiming they are right. The Mexican Government covers part of the cost of the fuel. It's a subsidy. You're wrong. Get over it.

[scott]

Also, Mexico imports anywhere from 250 to 400 thousand barrels a day of gasoline, almost all of it from the United States (among OECD nations, Mexico is the third largest importer of gasoline in the world, behind the US and The Netherlands). Do you think they are getting some kind of a discount so they can sell it for cheap?

Country level gasoline imports as of June 2008: http://omrpublic.iea.org/trade/Ct_gs_2y.pdf

[Spur-Addict]

The Income Tax is illegal, it isn't apportioned.

[Anti.Hero]

Government is trying to kill the middle class.

The funny thing is, most middle class kill themselves.

[RandomGuy]

The Income Tax is illegal, it isn't apportioned.

Would you like some crackers with your cool-aid?

The income tax is perfectly legal.


http://evans-legal.com/dan/tpfaq.html



An excerpt from this page:

THE TAX PROTESTER FAQ
Created by Daniel B. Evans

Copyright © 2002-2007. All rights reserved. Not legal advice.

Last updated: 7/19/2007.

Like most things on the Internet, this is a work in progress. Not all citations and quotations have been confirmed, and there are additional cases and arguments that may be added in the future.
Table of Contents

*

Introduction
o

What is the purpose of this FAQ?
o

What is a “tax protester”?
*

Cons utional Fallacies
o

The federal income tax is uncons utional because it is a “direct tax” that must be apportioned among the states in accordance with the census.
o

The income tax cannot apply to individual citizens, because that would be a “direct tax” prohibited by the Cons ution.
o

The income tax is a “direct tax” because it is collected from individuals who cannot shift the burden to others.
o

The income tax cannot apply to wages, because that would be a “direct tax” that must be apportioned in accordance with the Cons ution.
o

Wages cannot be taxed because our labor is our property, and so a tax on labor would be a tax on property and a “direct tax” within the meaning of the Cons ution.
o

Income taxes are not “Duties, Imposts, or Excises” and so must be “direct taxes” that must be apportioned.
o

Wages cannot be taxed because the exercise of a fundamental right cannot be taxed and the right to work is a fundamental right reserved to the citizens of the United States by the 10th Amendment to the Cons ution.
o

The authors of the Cons ution (aka, the “Founding Fathers”) never intended to give Congress the power to tax incomes from labor.
o

Congress can only tax the exercise of “privileges” or the income from “revenue taxable activities.”
o

Congress can only tax income arising out of activities that Congress can regulate, such as alcohol, tobacco, or firearms, or from interstate commerce.
o

The income tax cannot apply to individual citizens because Congress has power only over states and not over individual citizens.
o

Income cannot be taxed unless the source of the income is first determined.
o

The 16th Amendment is ineffective because it does not expressly repeal any provision of Article I of the Cons ution.
o

The 16th Amendment gave Congress no new power to tax.
o

The 16th Amendment was not properly ratified.
o

The 16th Amendment is ineffective because the word “income” is not defined.
o

The income tax cannot apply to citizens outside of the District of Columbia, the territories of the United States, and the forts and military bases of the United States, because the federal government has no jurisdiction outside of those “federal areas.”
o

The income tax cannot apply to natural-born “sovereign state citizens” because they are not “citizens” within the meaning of the 14th Amendment.
o

The federal income tax cannot apply to wages, because forcing people to share the fruits of their labors would be the same as slavery or “involuntary servitude” prohibited by the Thirteenth Amendment.
o

The federal income tax amounts to a deprivation of property without due process and without just compensation, which is contrary to the 5th Amendment to the cons ution.
o

Any assessment or collection of any tax without a court order is a violation of the due process clause of the 5th Amendment to the Cons ution.
o

Withholding of income tax from wages without consent and without any court order is a deprivation of property without due process contrary to the 5th Amendment to the Cons ution.
o

Any assessment or collection of any tax without a trial by jury is a violation of the 7th Amendment.
o

You cannot be required to file an income tax return because a tax return is a form of testimony and the 5th Amendment guarantees that you cannot be compelled to testify against yourself.
o

The IRS cannot require anyone to file an income tax return because that would be a violation of our 4th Amendment rights against unreasonable searches and seizures.
o

Receipt of Federal Reserve Notes is not “income” because Federal Reserve Notes are not lawful money (“coins in gold or silver”) within the meaning of the Cons ution.
o

The establishment of a “Pure Trust” can protect income and earnings from income tax, because a trust is a form of contract and is therefore protected from impairment by the contract clause to the Cons ution.
o

Under the 1st Amendment, there is a right to withhold taxes from the government until the government has answered a “pe ion for the redress of grievances.”
*

Statutory Fallacies
o

The Internal Revenue Code is not a law.
o

The Internal Revenue Code does not define “income.”
o

The Internal Revenue Code cannot define “income” because it is a term used in the Cons ution and Congress cannot modify the Cons ution by statute.
o

Wages are not income.
o

Wages are not “income” because wages represent an equal exchange of labor (a form of “property”) for money (another form of property), so there is no gain and no income.
o

Even if my wages are income, I can deduct deduct the ordinary costs of living in order to calculate the “gain” from my labor.
o

Even if my wages are gross income, I can deduct the full amount of the wages as a “claim of right” and not have any taxable income.
o

Wages are not income, but only a “source” of income (Section 61 of the Internal Revenue Code lists only sources of income), so wages are not taxable.
o

Wages paid within the United States are not a “source” of income defined by section 861 of the Internal Revenue Code, and so are not taxable.
o

The income tax does not apply to citizens outside of the District of Columbia and territories of the United States because the way “United States” is defined in the Internal Revenue Code does not include the states of the United States.
o

The income tax only applies to the domestic income of nonresident aliens.
o

Nothing in the Internal Revenue Code makes an ordinary citizen liable for the income tax.
o

Nothing in the Internal Revenue Code requires an ordinary citizen to file a return.
o

The requirement to file a return is based on the receipt of income in excess of the exemption amount, but the exemption amount is not specified by the statute and so there is no enforceable obligation to file a return.
o

The income tax is voluntary.
o

The income tax is only binding on people who have entered into contracts with the government, such as by applying for a Social Security number, driver’s license, or other governmental benefit or privilege.
o

Form W-4 (i.e., the federal withholding certificate) is an agreement to be liable for the income tax.
o

There is no requirement to apply for a Social Security number.
o

The income tax applies only to government employees and corporate officers.
o

The income tax applies only to corporations.
o

I am not a “person” within the meaning of the Internal Revenue Code.
o

The tax laws only apply to “taxpayers” and you are not required to file returns or pay taxes if you are not a “taxpayer.”
o

I cannot be prosecuted for failing to file a tax return if I have a good faith belief that the tax laws do not apply to me.
o

There is a difference between the “United States” and the “United States of America.”
o

There is a difference between “United States District Courts” and “District Courts of the United States.”
*

Procedural Fallacies
o

The Internal Revenue Service has never adopted any regulations imposing any income tax. Furthermore, failing to file a tax return is not a crime because the relevant provisions of the Internal Revenue Code have never been implemented by regulations.
o

The Office of Management and Budget does not require any form for the income tax imposed by section 1 of the Internal Revenue Code, and identifies section 1 of the Code as applying only to nonresident aliens.
o

Form 1040 does not bear a valid OMB control number and so no penalty can be imposed for failing to file a tax return.
o

Form 1040 and its instructions were not adopted in accordance with the Administrative Procedure Act.
o

The Internal Revenue Code does not require any payment of tax by individuals, and the Internal Revenue Service has admitted this by failing to include any reference to section 1 or section 6012 in the Privacy Act Statement included in Form 1040.
o

The Internal Revenue Service is not an agency of the federal government, but a private corporation incorporated in Delaware (or, alternatively, an agency of the government of Puerto Rico).
o

The notices issued by the IRS are not valid because they were not signed by the Secretary of the Treasury personally and the Secretary has failed to properly delegate the authority to sign the notices.
o

The notices issued by the IRS are invalid because they are not signed under penalties of perjury as required by I.R.C. section 6065.
o

If I do not file a return, then the Internal Revenue Service cannot assess a deficiency without first preparing a signed “subs ute for return” in accordance with I.R.C. section 6020(b).
o

I have revoked my consent to be a taxpayer.
o

I have a letter from the IRS saying that I am not required to file an income tax return.
o

I am not required to file a tax return because I wrote a letter to the IRS demanding to know where in the Internal Revenue Code it says I am required to file and the IRS has failed to respond.
o

I can comply with the law, and avoid any tax liability, by filing a “zero return” along with a statement explaining why I am not liable for any income tax.
o

I can comply with the law, and avoid any tax liability, by filing a “tax statement” instead of a tax return.
o

The IRS cannot levy on property or file a lien on property without first obtaining a judgment or order of a court.
o

A “notice of levy” (or “notice of lien”) is not the same as an actual levy (or an actual lien).
o

IRS employees can be sued for fraudulently issuing notices of lien or notices of levy.
o

Banks and employers that honor levies can be sued
o

The Tax Court is controlled by the IRS and always rules in its favor.
o

If you’re right, why don’t you claim the $________ reward that [name of tax protester] is offering to anyone who can show [insert tax protester gibberish here]?
*

Fundamental Misconceptions, Illiteracy, and Illogic
o

Not understanding the legal process, or the meaning of “law.” (E.g., “Why do you always assume that the courts are right and the tax protesters are wrong? Couldn’t the courts be wrong about what the Cons ution means?”)
o

Not understanding the meaning of “due process.”
o

Not understanding the meaning of “jurisdiction.”
o

Taking quotations out of context.
o

A belief that the word “includes” is restrictive.
o

An over-reliance on generalities and pla udes.
o

Rejecting simple explanations.
o

Ignoring the ordinary meaning of words.
o

Assuming that, if a statement is true, the converse of the statement must also be true.
o

Inconsistency in applying “ad hoc, ” result-oriented arguments.
o

Not being able to see the forest for the trees.
o

A belief in the “magic” of words.
o

“Chaining” unrelated decisions together.
o

Lies and fabrications.
o

Legalistic gibberish.
*

Paranoid (and Other) Delusions
o

There are lots of tax protesters who have won cases against the IRS, such as John Cheek, Lloyd Long, and Vernice Kuglin.
o

There are many lawyers, accountants, former IRS employees, and other well-educated people who agree with tax protester arguments.
o

There are lots of court decisions favorable to tax protesters, but the judges always seal the transcripts, suppress the opinions, or issue “gag orders” against the parties so that the opinions are never published.
o

The court decisions against tax protesters are all rendered by ignorant, corrupt judges who have a vested interest in maintaining the status quo because their salaries are paid by the income tax and they are not going to bite the hand that feeds them.
o

The court decisions against tax protesters are all rendered by judges who are afraid of being audited by the IRS and so are afraid to rule against the IRS.
o

The IRS always wins against tax protesters because the IRS only litigates cases against ignorant, ill-prepared defendants it knows it can beat, and it always settles cases against the smart defendants who know how to beat the IRS.
o

The taxpayers who have challenged the tax system and lost all lost because they argued their cases badly.
o

If Congress really meant for Americans to pay taxes on their earnings, Congress would have changed to law to make our obligations and liabilities clearer, because then tax protesters would have no choice by to obey the law.
o

I would file returns and pay taxes if Congress, the IRS, or the courts would just show me the law that requires me to do so.
*

Related (But Non-Tax) Lunacies
o

The tax laws cannot be enforced against citizens in federal courts, because federal courts are “admiralty” or “maritime” courts or (alternatively) tax enforcement is governed by admiralty law and can be defeated by properly invoking admiralty procedures.
o

If the flag of the United States that is in the courtroom has a gold fringe, then the court is operating under martial law.
o

In a jury trial, the defendant can ask the jury to decide the validity of the law.
o

A name that is written all in capital letters (as in a court caption) is not the same as a name written in mixed case (upper and lower case).
o

Putting a comma or colon between your first and last names shows that you are a freeman not subject to governmental authority.
o

Using zipcodes on the mail you send, or accepting mail with zip codes, is what subjects you to federal jurisdiction.
*

More About Tax Protesters
o

A “tax protester” is only someone classified as a “tax protester” by the Internal Revenue Service in accordance with the IRS definition of “tax protester.”
o

What penalties can be imposed on tax protesters?
o

Why do tax protesters keeping violating the laws, and keep litigating, even after it is clear that they have lost and have no valid arguments?
o

Is tax protesting a cult?
o

The federal income tax is inapplicable, invalid, unenforceable, or uncons utional because [________________]?
o

Other web sites with information on tax protester arguments.[/QUOTE]

[RandomGuy]

The federal income tax is uncons utional because it is a “direct tax” that must be apportioned among the states in accordance with the census.

False. It is true that there is an apportionment requirement in the Cons ution for “direct taxes,” but the 16th Amendment clearly eliminates the apportionment requirement from all taxes on incomes.

Before the adoption of the 16th Amendment, the cons utionality of an income tax was determined under Article I, Section 9, Clause 4 of the Cons ution, which states that:

"No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."

The reference to the "Census or Enumeration" was a reference to Article I, Section 2, of the Cons ution, which directs that:

"Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons."

("All other Persons" meant slaves.)

Whether or not an income tax really was a “direct tax” within the meaning of the cons ution will be discussed in other sections of this FAQ, but the 16th Amendment to the Cons ution, ratified in 1913, removed all doubt about apportionment because it clearly states that:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Following the ratification of the 16th Amendment, Congress enacted a general income tax, and the cons utionality of that tax was challenged once again, but the Supreme Court held unanimously that the income tax was cons utional because “in express terms the Amendment provides that income taxes, from whatever source the income may be derived, shall not be subject to the regulation of apportionment.” Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916).

The arguments that tax protesters make about the validity and meaning of the 16th Amendment will be dealt with in other sections of this FAQ.
Tax Protester “Evidence”

Most tax protester arguments that a tax on incomes is a “direct tax” rely in one way or another on the decisions of the U.S. Supreme Court in Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1894), on reh’ng 158 U.S. 601 (1895).

In the first Pollock decision, a majority of the court (7 of the 9 justices) began with the premise that a tax on the income from property is the same as a tax on the value of the property itself, a premise completely inconsistent with every other Supreme Court decision before or since (and repudiated by the Supreme Court in New York v. Graves, 300 U.S. 308 (1937)). The Court then concluded that a tax on rents received from real property was a “direct tax” and uncons utional unless apportioned. Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1894). On rehearing, a narrower majority (5 of the 9 justices) decided that a tax on dividends, interest, and other income from personal property (property other than land) was also a “direct tax” and so uncons utional unless apportioned. Pollock v. Farmers Bank and Trust Co., 158 U.S. 601 (1895).

However, the Pollock decisions were rendered in 1894-5 and there is no question but that the 16th Amendment, which was proposed in 1909 and ratified by the required three-fourths of the states in slightly less than four years, was intended to over-rule the Pollock decisions.

“[T]there is no escape from the conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided....”

Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916).

Any argument that relies upon the Pollock decisions is therefore almost certainly wrong.

[RandomGuy]

The Income Tax is illegal, it isn't apportioned.

Got any other stupidity you want me to debunk?

[Wild Cobra]

Also, Mexico imports anywhere from 250 to 400 thousand barrels a day of gasoline, almost all of it from the United States (among OECD nations, Mexico is the third largest importer of gasoline in the world, behind the US and The Netherlands). Do you think they are getting some kind of a discount so they can sell it for cheap?

Country level gasoline imports as of June 2008: http://omrpublic.iea.org/trade/Ct_gs_2y.pdf

If you want to call that an Import, then fine. Just know the truth behind it. They do not have the refinery capacity. The inported gas is from them shipping oil to be processed. That does not make it any more expensive except the added shipping. They are not paying USA prices for the imported gas. They are paying the fees to have their oil refined.

Nice try.

[scott]

If you want to call that an Import, then fine. Just know the truth behind it. They do not have the refinery capacity. The inported gas is from them shipping oil to be processed. That does not make it any more expensive except the added shipping. They are not paying USA prices for the imported gas. They are paying the fees to have their oil refined.

Nice try.

Wow, you truly are clueless. Where did you pull this out of, your ass?

You honestly think American refining companies are selling fuel to Mexico on the cheap as some kind of favor? Do you understand the way markets work AT ALL?

One of the most popular Mexican crude oils, especially in the Texas Gulf refining complex, is Maya. It currently sells for about $20 off WTI, which right now would be about $120/bbl. Even if some US refinery could costlessly transport and process this back to gasoline, then sell it back to Mexico at the price they paid for the crude oil, the fuel would cost $2.86/gal - more than pump prices in Mexico. But refineries in Texas don't foot the refining and shipping costs for Mexico - and Mexico must pay market price to import their fuel, just like everyone else. The rest gets subsidized, whether you want to admit it or not.

Don't come in here making up BS and not expect to be school. If you continue with this nonsense, you will get embarassed.

No wonder the political dialogue in this country has devolved to . When so much time is wasted over having to debunk blatant falsehoods over the truth, there is no time for actual discussion.

[RandomGuy]

If you want to call that an Import, then fine. Just know the truth behind it. They do not have the refinery capacity. The inported gas is from them shipping oil to be processed. That does not make it any more expensive except the added shipping. They are not paying USA prices for the imported gas. They are paying the fees to have their oil refined.

Nice try.

Your problem is that you fail to acknowledge his vast understanding of oil economics.

[RandomGuy]

No wonder the political dialogue in this country has devolved to . When so much time is wasted over having to debunk blatant falsehoods over the truth, there is no time for actual discussion.

Pretty much.

People don't like to confront their confirmation bias, and with the information revolution, have access to all sorts of sources of information with little accountability.

Any asshat in the world can claim "teenage pregnancies are higher today than they were 20 years ago because I say so", and it costs them nothing if they are provably wrong.

Remember this is the guy who relies more on his opinions than peer reviewed studies, thinks Ann Coulter is a credible source, won't admit the Bush administration might have political motives to do things, and will simply not admit he might need to rethink anything when presented with new information.

He's definitely a decider.

[ElNono]

Pretty much.
...
Any asshat in the world can claim "teenage pregnancies are higher today than they were 20 years ago because I say so", and it costs them nothing if they are provably wrong.
...

probably

[RandomGuy]

probably

... no I meant provably.

He never did produce any figures that backed his assertion, so all the verifiable proof contradicted his statement.

[ElNono]

... no I meant provably.

He never did produce any figures that backed his assertion, so all the verifiable proof contradicted his statement.

I see.

[Wild Cobra]

----snip---

One of the most popular Mexican crude oils, especially in the Texas Gulf refining complex, is Maya. It currently sells for about $20 off WTI, which right now would be about $120/bbl. Even if some US refinery could costlessly transport and process this back to gasoline, then sell it back to Mexico at the price they paid for the crude oil, the fuel would cost $2.86/gal

Wait a minute. You say $20, then $120. If they can produce it for $20, then pay a fee for refinery and transportation, that doesn't make it high priced. They simply are not making that extra profit $100 per bbl. They can drill it and sell it for prices as if oil hadn't raised like it did.

Don't come in here making up BS and not expect to be school. If you continue with this nonsense, you will get embarassed.

Without numbers, I will not believe you. Historic numbers are on my side. We all know it doesn't cost $100+ per bbl to get the oil. The price is high because of supply and demand. Owners and cartels can regulate their supply to increase the world price. As long as Mexico has a net export of oil, they can sell gas for cheap without subsidies. Cost of getting the oil plus refinery plus transportation plus profit can still be the same price as five years ago or longer.

How much did our gas sell for when oil was $20 per barrel? If that is what their cost of getting their oil is, then I would expect as low as those same prices without subsidies!

Even if they actually buy some gasoline from us instead of paying to refine their oil, when it is mixed with their own refinery capacity, the cost gets averaged in. Then on top of that, they would likely be buying a different blend that is cheaper to produce than what we dictate be sold in our markets. Maybe they buy the stuff that we cannot sell here because of contaminates as well as shipping some of their oil to be processed.

They don't have a corporate setup and laws as ours. I would agree if this was happening here, with our way of doing business.

Go ahead. Give it your best shot to embarrass me.

[ElNono]

I believe that when scott says "$20 off WTI", he means $20 bbl cheaper than West Texas Intermediate type of oil (which currently sells for about $140/bbl)

[Wild Cobra]

I believe that when scott says "$20 off WTI", he means $20 bbl cheaper than West Texas Intermediate type of oil (which currently sells for about $140/bbl)

The cost of their oil is in essence parts, labor, etc. It does not cost them $120 per bbl to get their oil. It is no more than maybe $30 per bbl. My argument is that Mexico keeps their oil within their own market circle, shielding it from world supply and demand pricing.

I know Scott is knowledgeable in this filed, but in this case, I'm rather certain he's on the wrong side of the truth.

[Wild Cobra]

I believe that when scott says "$20 off WTI", he means $20 bbl cheaper than West Texas Intermediate type of oil (which currently sells for about $140/bbl)

Without looking that up, I'll bet it's the market price of their oil. It probably isn't light-sweet crude which is the prices we always hear. As oil gets either more sour, or heavier, the value drops on the world market.

[ElNono]

Without looking that up, I'll bet it's the market price of their oil. It probably isn't light-sweet crude which is the prices we always hear. As oil gets either more sour, or heavier, the value drops on the world market.

WTI grade is also known as Texas light sweet, and yes, it's the kind we hear about more often. I believe the Maya type has more sulphur, making it slightly more 'sour'. I'm sure scott will correct me if I'm off track here.

[scott]

Wow, WC, you are on such another planet on this topic, I don't know where to start... I guess I'll give it a try.

Wait a minute. You say $20, then $120.

I said $20 off WTI, which today was trading over $143. And to be specific, Maya crude is currently only $17 off. That means the crude is trading at $126/bbl.

If they can produce it for $20,

What they produce it for is irrelevent.

then pay a fee for refinery and transportation, that doesn't make it high priced. They simply are not making that extra profit $100 per bbl. They can drill it and sell it for prices as if oil hadn't raised like it did.

What planet does this happen on?

1) They don't "pay a fee" for refining and transportation. They sell the oil to companies who own refineries. The company that buys pays the transportation to get it to their refinery, then they refine it.
2) Whatever Mexico sells the oil for minus what they produce it for is, by the very essence of the term, profit. They can drill it and sell it for prices as if oil prices hadn't gone up... but they don't, because they'd be stupid to. They sell it for the price the market will bear.

Without numbers, I will not believe you.

Why not just come out and say it, there are no numbers or facts in the entire world that will make you believe anything other than your wacky pre-concieved notions. You've demonstrated that in numerous other threads, and this one is proving no exception. I'm not going to waste my time providing you with any other facts that I already have, because it would be pointless to do so. Believe what you want, and continue to be laughed at by anyone who has actual knowledge of the situation.

Historic numbers are on my side.

What is exactly is your side? Your posts have become so incoherrent, it's impossible to really know. And what historic numbers are on this side of yours?

We all know it doesn't cost $100+ per bbl to get the oil.

Duh. It also doesn't cost $4 for Starbucks to make a cup of coffee, but that is how much it costs you to buy one.

The price is high because of supply and demand. Owners and cartels can regulate their supply to increase the world price.

What a novel concept. I wonder why this has never been covered in the countless oil threads we've had over the years.

As long as Mexico has a net export of oil, they can sell gas for cheap without subsidies

Unless cars in Mexico run off crude oil, it's pretty irrelevent. Last time I checked, cars ran off gasoline and diesel. And historically, Mexico has been a net importer of gasoline and diesel. Mexico remains the #1 importer of US hydrocarbon products in the world.

Cost of getting the oil plus refinery plus transportation plus profit can still be the same price as five years ago or longer.

Yeah okay, some refinery in Texas is going to buy Mexican oil for $126/bbl, refine it into gasoline, and then sell it back for $30/bbl.

[quote]How much did our gas sell for when oil was $20 per barrel? If that is what their cost of getting their oil is, then I would expect as low as those same prices without subsidies![quote]

This is the point at which your notion of how basic economics works becomes so distorted that I can't even follow. You would fail my class.

Even if they actually buy some gasoline from us instead of paying to refine their oil, when it is mixed with their own refinery capacity, the cost gets averaged in. Then on top of that, they would likely be buying a different blend that is cheaper to produce than what we dictate be sold in our markets. Maybe they buy the stuff that we cannot sell here because of contaminates as well as shipping some of their oil to be processed.

They don't have a corporate setup and laws as ours. I would agree if this was happening here, with our way of doing business.

Go ahead. Give it your best shot to embarrass me.

Blahblahblahblahblah... maybe their cars run on fairy dust.

Your credibility on this topic, in addition to many others, is completely blown.

Goodnight now.

[scott]

WTI grade is also known as Texas light sweet, and yes, it's the kind we hear about more often. I believe the Maya type has more sulphur, making it slightly more 'sour'. I'm sure scott will correct me if I'm off track here.

Correct. Maya is very heavy, very sour, hence why it is comparatively cheap.