gas prices, take 2 Options

[scotty914]

okay with the hurrican i have been watching a lot of fox news. according to opec they will pump more oil to help. here is the crazy part opec is going to hold a meeting next month to figure out why gas prices are as high as they are, they stated the opec pumps and sells the oil at 12 per barrel.

so who ever is buying the oil at 12 per barrel is marking it up to a current price of 67 a barrel, i wonder if this is along the lines of enron, artificially marking up the oil.

i have read a few things lately about oil wells, some thing like 70 % of the wells that were dry 10 to 20 years ago now have oil in them again, and but that they mean full flow pumping, not partial.

right now there is a 55 billion gallon oil surpluse ( just heard it ) in storage in this country.

[Sammy]

We have a responsibility to verify that things we post as fact are indeed factual, and not heresay. ne way to do that is to check with a reputable source such as the API website http://api-ec.api.org/industry/index.cfm?o...004000000000000

We should be careful when quoting things we might overhear or read on a website that is biased.

The following is accurate:
the US produces 8.62 million bbls of gasoline a month, and imports about 1.3 million bbls a month.

Refineries are currently running at 94% capacity, the 6% is attributed to maintenance and unscheduled breakdowns. From past experience I can tell you that it is very difficult to keep a refinery at 94% for a sustained period.

The US has 210 million bbls of gasoline inventory (about 21 days worth), but it isn't hidden away somewhere stashed so no one can get to it. Where did that idea come from? It is sitting in tanks awaiting scheduled shipments, it is in pipelines, it is in gas station storage tanks, in other words it is in the process of being sold to consumers. Verly little of it is sitting idle. GASOLINE GOES BAD IF IT SITS VERY LONG! No one is going to hoard it. It just doesn't happen. It doesn't have to, we can do the same thing by buying and selling gasoline futures.

Current crude inventories are at 318 million bbls (about a 16 day supply, that is called nearly running on empty), that isn't very much considering how much we refine. It takes 30 to 45 days to get crude delivered once it is purchased, you need to have enough inventory to keep running while waiting for the next shipment, and that amount is barely enough to do that. Anyone who passed economics 101 can tell you that excess inventory is evil and bad business practice unless that inventory is expected to increase in value. If speculators think the price of crude is going to rise, they may sit on a million bbls for a few week or two, but that's about it. After that they just play the futures markets.

The US strategic oil reserve is sitting at 700 million bbls. The US consumes around 20 million bbls per day. You do the math.
35 days is a lot shorter than a year.

Don't think the Naval petroleum and oil shale reserves are just sitting there waiting for someone to turn a valve, that would also be (IMG:http://www.914world.com/bbs2/html/emoticons/stromberg.gif)

Much of the Naval shale reserves were sold off in the 80's, the Elk Hills oil reserve (while huge) is runnning as hard as it can to produce oil but it is not an easy or a fast process. They have to inject water deep into the ground at extremely high pressures to get the oil out of the rock, then pump it out, then seperate the oil from the water, etc. They just can't get it out that fast.
I know, my shop supplies and maintains the high pressure, high volume pumps for them and I deal with those folks all the time.

I'm not going to comment on the foil hat wearing conspiracy-theorists, just trying to provide some real information.
Research and homework should be a requirement but the truth isn't as much fun or exciting as a conspiracy.

As far as record profits for the oil companies?
If a company made a penny of profit last quarter, and they make two pennies profit this quarter, then they just made record profits and the headlines will say,
"OIL COMPANY PROFITS UP 100%". Don't let the media make a fool out of you.
Exxon-mobil is currently operating at a 10.01% profit margin. Is that gouging? Is that dicking us? I don't think so. Maybe they should be a non-profit organization, or they should give us their products for free. Hardly.
10% is much more profit than oil companies historically make so it looks like a great deal of money when compared to years past, but 10% isn't a mind-blowing number. We need to keep it in perspective.

As previously posted, we can bitch about how much money the shareholders are making or we can join the ranks and become shareholders. that way when they make money, we make money. That is what I have done.
Then the only question is, are we going to be satisfied with a 10% return? Probably. What about a 2 or 3% return that an oil company stock will return over the long run? Maybe not.
Given the historic numbers, a T-bill would probably have done better.

Sorry if I muddled up the bitch session with facts. (IMG:http://www.914world.com/bbs2/html/emoticons/wink.gif)