From: "Gary Britt" 

Well I don't think it really takes very long.  Does it take longer than it
takes for it to go up?  Possibly.  Certainly oil companies what to sell
their stuff for the highest price the market will accept, just like any
other company.  If they had the ability to set the price any where they
wanted it would never come down (sort of like Microsoft Operating Systems
and Office products prices never come down).

The final best gauge for whether the oil companies are excessively or
extraordinarily profitable is their share prices as a multiple of earnings.
Companies that are and are expected to be in the future excessively or
extraordinarily profitable will have stock prices at a higher than normal
multiple of earnings.  The oil companies price earnings ratios even after
Katrina profits aren't as high as most company's.

So you don't have to decide who is a better analyst of financial
information, me or Lucy, just look at what the people who do it for a
living every day for the last 40 years and more have to say.  What they
have to say is reflected in the oil company's stock price and price
earnings ratios.

Gary
"Mike N."  wrote in message
news:fe2up1h6aisi0cslsbre3kti6c3t7v9b0g{at}4ax.com...
> On Tue, 13 Dec 2005 10:05:19 -0500, "Gary Britt"
>  wrote:
>
> >If TODAY'S sales don't generate enough cash
> >to buy oil at TOMORROW'S prices then the company won't be able to buy
> >replacement oil and will go out of business.
>
>   So when the spot price falls, TODAY'S sales should generate excess cash
> to buy oil at TOMORROW's prices.   So why does it take so long for the
> price to drop when the oil spot price drops?
>
>

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