gas prices, take 2 |
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gas prices, take 2 |
scotty914 |
Aug 29 2005, 02:39 PM
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#1
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suby torque rules Group: Members Posts: 1,528 Joined: 20-July 03 From: maryland, the land of 25 year Member No.: 924 |
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 |
Aug 30 2005, 11:22 AM
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#2
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. Group: Members Posts: 1,190 Joined: 21-January 03 From: Orange, Ca Member No.: 178 |
One last thing:
$67 a barrel for crude oil is NOT the price you would get from californian or Texas oil. That price is for light sweet crude like you would find on the north slope of Alaska or in Saudi Arabia, in other words oil that has very little sulfur content and has a high percentage of light distillates and lower percentage of heavy asphaltines and long chain molecules. Light sweet is cheaper and easier to convert into gasoline and diesel so it is worth more. The oil that is being pulled out of southern California is heavy sour, and sells for significantly lower than light sweet crude. Sometimes the discount is as much as half. It takes a great deal of expense to make significant amounts of valuable products form heavy sour crude when compared to the higher grade stuff. It is also harder on the equipment and takes more expensive and complex refining facilities. Remember seeing gushers coming in on TV or in the movies where oil is spewing out of the ground and covering everyone as they dance around? That is fictional in most cases around these parts. Sure it happened once in a while, but even then that pressure is relieved very quickly. Most wells never had that kind of pressure. it takes horsepower to suck the oil out. As a well gets more mature it produces less oil. Eventually it takes more money to operate a well than you can get back out ouf it. That's when they shut it down. Oil usually doesn't sit in a great big pool in the earth. It is mixed in and saturated in dirt, rock fissures, and shale. Oily mud. It doesn't just flow out easily or quickly except for a rare exception. That is why organizations like THUMS, KBR, Elk Hills, National Oil well, etc rely on subsurface injection of water, steam, and other chemicals to try and squeaze every drop out of the ground they can. That is expensive, especially when the stuff you are pulling out will only sell for $30 or $40 a bbl (today's prices roughly). Back in 1999 when light sweet crude was selling for $16 bbl, it was not cost effective at all to operate anything but the most productive of domestic wells so they capped them. Eventually oil will leach out of the rock "fill up" a dry well. Start puming that well and it will dry up again quickly. Is it worth the large cost to start it back up if it could possibly dry up again in a matter of months or faster? Sometimes, more often not. |