I agree 100% that demand is ever-increasing and that helps drive higher prices, BUT, I have a problem with that theory in this instance and here it is in terms we can all understand.

Let's say you buy 10 Wayne 60's during a time in which they are plentiful, for $750/ea. and you sell them all for $1500/ea.
That means you made $7500 gross profit.

Then, you go out looking for 10 more, but since supply is tight, you only find 5, but now they cost you $1000/ea. The profit margin you made before was 100%, so to make that margin you sell these 5 for $2000/ea for a gross profit of $5000.

Here's my question: If gasoline supply is so tight, how are the oil companies recording record profits?? Shouldn't they AT BEST be making around the same profit as before?? I don't get it I guess. If you have less of something to sell, but you sell it for more than before, how are you that much money-ahead than when you had a lot and sold for a little?

[This message has been edited by Seth Robbins (edited 05-23-2007).]