Oil prices rise on big drop in US supplies

by Dennis324 Thu Aug 16, 2012 1:34 am

Oil prices rise on big drop in US supplies

BANGKOK (AP) — Oil remained above $94 a barrel Thursday in Asia after an unanticipated drop in U.S. crude inventories and stronger retail sales helped push prices to a three-month high.

The Energy Department said Wednesday that stockpiles fell 3.7 million barrels last week to 366.2 million barrels, suggesting stronger demand. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill. It marked the third consecutive large weekly decrease in oil supplies. Decreases tend to cause a rise in oil prices.

And it doesnt matter anyway since there is no way the oil barons are even going to let supply be greater than demand. Remember us talking about this a few months ago? O'Reilly was complaining that the oil comapnies were selling oil overseas so that we couldnt drop oil prices (ourselves) if we wanted to. The oil companies have the oil, but sell it off overseas to artificially create shortages here, causing prices to rise.

*Sigh*

by Marconius Thu Aug 16, 2012 10:36 am

You still don't get it do you???

by Marconius Thu Aug 16, 2012 10:39 am

The current spike in prices are driven by two events.

1st is the closure of the refinery in St Croix. I posted about this few months ago and warned you then. Prices started rising the very day after it stopped its production trains.

2nd is the refinery fire in San Fran. Prices along the west coast have skyrocketed since that event, but luckily it has only affected areas east of the Rockies only minimally.

by **Bryant** Thu Aug 16, 2012 9:50 pm

Marconius wrote:The current spike in prices are driven by two events.

1st is the closure of the refinery in St Croix. I posted about this few months ago and warned you then. Prices started rising the very day after it stopped its production trains.

2nd is the refinery fire in San Fran. Prices along the west coast have skyrocketed since that event, but luckily it has only affected areas east of the Rockies only minimally.

We've gone up from $3.60 to $3.90 per gallon due to the fire.

by Miles1 Fri Aug 17, 2012 2:40 am

Bryant wrote:
Marconius wrote:The current spike in prices are driven by two events.

1st is the closure of the refinery in St Croix. I posted about this few months ago and warned you then. Prices started rising the very day after it stopped its production trains.

2nd is the refinery fire in San Fran. Prices along the west coast have skyrocketed since that event, but luckily it has only affected areas east of the Rockies only minimally.

We've gone up from $3.60 to $3.90 per gallon due to the fire.

Is around $7.50 a gallon over here. Can I come over to get some gas from you guys?

by Dennis324 Fri Aug 17, 2012 7:09 am

Marconius wrote:You still don't get it do you???

I guess not. Or rather, (no offense) but I just aint buying the excuse.

All I'm saying is the idea of supply and demand is a myth when it comes to the oil companies.
Back in the spring we talked about the oil prices and I had pointed out that, because of the mild winter, there was plenty of oil and gas in the U.S.A. So supply and demand here should dictate lower prices.

But of course, they are not lower. They are much higher because the oil companies are shipping their products overseas. Measured in dollars, oil products are now America's largest export worth $88 billion a year to the oil companies. Again, oil is our largest export. So one might think someone who cared about the people of our country would scale back the exports a bit when a refinery burns up or closes, in order to keep prices from skyrocketing. Had the oil companies not been selling off supplies overseas, we'd have a surplus here DESPITE the closing of a refinery, or whatever.

But thats not happening is it? No. Oil companies just keep on exporting trying to grab that extra dollar (despite breaking records for profits year after year).

And before you go telling me "oil companies have an obligation to make money for their shareholders"...well, thats the problem isnt it? They care more about money than how prices affect poor folks here. They are trading in a product that is of national security interest. Plus their attempts to profit hurts the poor. It would be different if they were trying to get the best price for some other product (like alcohol or tobacco) that isnt a vital necessity. But oil and gas are as vital as water to most folks.

This is a little bit dated, but the lesson is still the same:
High Gas Prices Mean Record Profits for Big Oil

Points:
Exxon, to report a staggering $10 billion profit -- a 60 percent increase.
Shell was expected to post a healthy 22.2 percent gain, translating to $5.9 billion for the company, which is right on par with competitor Chevron's profits.

Of course, in that article, ABC blamed speculators. And they likely are a big part of the problem. But if supply and demand means nothing anymore, then the oil companies are just as much to blame.

So pardon me if I'm not a bit sympathetic to the plight of the poor oil barons.

by Dennis324 Fri Aug 17, 2012 7:30 am

Miles1 wrote:
Bryant wrote:
Marconius wrote:The current spike in prices are driven by two events.

1st is the closure of the refinery in St Croix. I posted about this few months ago and warned you then. Prices started rising the very day after it stopped its production trains.

2nd is the refinery fire in San Fran. Prices along the west coast have skyrocketed since that event, but luckily it has only affected areas east of the Rockies only minimally.

We've gone up from $3.60 to $3.90 per gallon due to the fire.

Is around $7.50 a gallon over here. Can I come over to get some gas from you guys?

Sure! Just bring some whisky and beer with ya. Wink

by Marconius Mon Aug 20, 2012 1:23 pm

Dennis324 wrote:
Marconius wrote:You still don't get it do you???
I guess not. Or rather, (no offense) but I just aint buying the excuse.

All I'm saying is the idea of supply and demand is a myth when it comes to the oil companies.
Back in the spring we talked about the oil prices and I had pointed out that, because of the mild winter, there was plenty of oil and gas in the U.S.A. So supply and demand here should dictate lower prices.

But of course, they are not lower. They are much higher because the oil companies are shipping their products overseas. Measured in dollars, oil products are now America's largest export worth $88 billion a year to the oil companies. Again, oil is our largest export. So one might think someone who cared about the people of our country would scale back the exports a bit when a refinery burns up or closes, in order to keep prices from skyrocketing. Had the oil companies not been selling off supplies overseas, we'd have a surplus here DESPITE the closing of a refinery, or whatever.
As pointed out at the time, there never has been a surplus. We do not even come close to producing enough oil here in tUSA to cover our own usage, so there can never be a surplus of domestic crude (yes we do have and keep natural gas surpluses, but not crude). Yes we do export oil overseas, but you should be thankful for that. There are many different qualities of crude oil with many different specific gravities. The heavier the crude, the harder and more expensive it is to refine. We sell the heavy stuff and import the lighter stuff so that refining costs here in tUSA stays low so that we can have some of the lowest prices on the planet (comparitively).

Does that make sense???

But thats not happening is it? No. Oil companies just keep on exporting trying to grab that extra dollar (despite breaking records for profits year after year).

And before you go telling me "oil companies have an obligation to make money for their shareholders"...well, thats the problem isnt it? They care more about money than how prices affect poor folks here. They are trading in a product that is of national security interest. Plus their attempts to profit hurts the poor. It would be different if they were trying to get the best price for some other product (like alcohol or tobacco) that isnt a vital necessity. But oil and gas are as vital as water to most folks.

This is a little bit dated, but the lesson is still the same:
High Gas Prices Mean Record Profits for Big Oil

Points:
Exxon, to report a staggering $10 billion profit -- a 60 percent increase.
Shell was expected to post a healthy 22.2 percent gain, translating to $5.9 billion for the company, which is right on par with competitor Chevron's profits.

Of course, in that article, ABC blamed speculators. And they likely are a big part of the problem. But if supply and demand means nothing anymore, then the oil companies are just as much to blame.

So pardon me if I'm not a bit sympathetic to the plight of the poor oil barons.

All of that sounds like corporate greed on the surface, but dig deeper. What is the oil companies' profit margin??? It is between 7-10% of each unit sold. Check that with other corporations. People like Apple, GM, food producers, Sony, etc. make 40% profit, at the low end, all the way to 65%, on the high end, profit from each unit sold (iphones are about a 55% profit to Apple per phone sold and I see no outrage). Of course oil companaies like Chevron and Exxon are gonna be setting profit records.......they are the biggest corporations on the friggin planet!!! You think they are ripping you off, but when expendatures/profit are compared.....gas is a bargin. It is much cheaper than water and water is thousands times more plentiful (and water is much more neccessary than oil and gas).

BTW- I love the usage of key words in your post. Of course things like "Oil Barons" don't hit a sympathy nerve for me. I'll leave those key words for the progressives. When boiled down to substance, it is all they have.

by Miles1 Wed Aug 22, 2012 2:44 am

You think youse guys got it bad:

Drivers face €100 fill-up bill as petrol heads for €2 a litre

DRIVERS face a bill of almost €100 every time they fill up their cars, as more petrol price hikes loom.

As the fuel price burdens continues to grow, the cost of filling a typical family saloon car with a 55-litre tank has soared to €93.50.

A litre of petrol is now past the €1.70 barrier, almost double the price of three years ago when it cost 94c.

The average driver will have to fork out more than €2,500 over 12 months for fuel compared with about €1,800 in 2010.

When insurance, motor tax, toll charges, NCT fees, and annual servicing are added, the weekly cost of running a family car is well past €100.

International oil prices, a weakened euro and tax increases have combined to push fuel costs to their highest levels ever.

And with another harsh Budget on the way, further hikes are likely over the coming months.

Petrol may nudge even closer to the €2 a litre mark as we head into winter.

Reprieve

And home heating oil now costs €940 for a 1,000-litre fill, compared with €800 at the same time last year.

It has gone up €40 since the start of June -- and further increases are expected as demand increases and volatile oil prices continue.

The Government now takes a massive 72pc of the retail price of fuel -- shared between excise duty, VAT and the so-called carbon tax aimed at cutting use of fossil fuels.

But there is understood to be no prospect of a reprieve in December's Budget, with ministers already dampening down calls from groups representing motorists and hauliers.

Although the tax here is high, it is still lower than some other countries in Europe -- in Britain it is closer to 80pc.

The price hike at the pumps this week comes as fuel companies pass on increases in the cost of their long range orders. Petrol is 20c more expensive and diesel 18c more, on average, than in September 2011.

Consumers Association chief executive Dermot Jewell hit out at the increases, warning of the extra burden they will place on struggling consumers.

AA director of consumer affairs Conor Faughnan said: "It has been the year from hell for fuel prices." He called on the Government to cut fuel taxes in the next Budget.

So that's just over $116 to fill your average family car's gas tank once, and it's predicted to be over $9 per gallon by the end of the year. And yes 72% of the price being taxes is ridiculous, before you say it....

by Dennis324 Thu Aug 23, 2012 7:05 pm

Marconius wrote:

All of that sounds like corporate greed on the surface, but dig deeper. What is the oil companies' profit margin??? It is between 7-10% of each unit sold. Check that with other corporations. People like Apple, GM, food producers, Sony, etc. make 40% profit, at the low end, all the way to 65%, on the high end, profit from each unit sold (iphones are about a 55% profit to Apple per phone sold and I see no outrage). Of course oil companaies like Chevron and Exxon are gonna be setting profit records.......they are the biggest corporations on the friggin planet!!! You think they are ripping you off, but when expendatures/profit are compared.....gas is a bargin. It is much cheaper than water and water is thousands times more plentiful (and water is much more neccessary than oil and gas). Sure if I were dumb enough to buy it by the bottle in the store. But I guarantee you that I can take a hose and fill up a 50 gallon drum with water at the house and it would cost me practically nothing. But if I filled up that same drum with gasoline, or oil I'd go broke.

BTW- I love the usage of key words in your post. Of course things like "Oil Barons" don't hit a sympathy nerve for me. I'll leave those key words for the progressives. When boiled down to substance, it is all they have.

*Chuckle* Well, I'm not trying to play upon your sympathies on this issue man. Your incurably biased I'm afraid. Even moreso than myself on the issue of Christianity. But I do use key words like "oil Barons" because they remind me of the old Cattle Barons of the old west. Not meant as an insult, justs an easy and accurate way to describe the powers that be in the oil industry. The oil barons are diffeent from the guys that work on the platforms as far as I am concerned. JR Ewing was an oil baron. Jett Rink (James Dean of the film 'Giant') was an oil baron. Lol!

by Dennis324 Thu Aug 23, 2012 7:13 pm

Miles1 wrote:You think youse guys got it bad:

Drivers face €100 fill-up bill as petrol heads for €2 a litre

DRIVERS face a bill of almost €100 every time they fill up their cars, as more petrol price hikes loom.

As the fuel price burdens continues to grow, the cost of filling a typical family saloon car with a 55-litre tank has soared to €93.50.

A litre of petrol is now past the €1.70 barrier, almost double the price of three years ago when it cost 94c.

The average driver will have to fork out more than €2,500 over 12 months for fuel compared with about €1,800 in 2010.

When insurance, motor tax, toll charges, NCT fees, and annual servicing are added, the weekly cost of running a family car is well past €100.

International oil prices, a weakened euro and tax increases have combined to push fuel costs to their highest levels ever.

And with another harsh Budget on the way, further hikes are likely over the coming months.

Petrol may nudge even closer to the €2 a litre mark as we head into winter.

Reprieve

And home heating oil now costs €940 for a 1,000-litre fill, compared with €800 at the same time last year.

It has gone up €40 since the start of June -- and further increases are expected as demand increases and volatile oil prices continue.

The Government now takes a massive 72pc of the retail price of fuel -- shared between excise duty, VAT and the so-called carbon tax aimed at cutting use of fossil fuels.

But there is understood to be no prospect of a reprieve in December's Budget, with ministers already dampening down calls from groups representing motorists and hauliers.

Although the tax here is high, it is still lower than some other countries in Europe -- in Britain it is closer to 80pc.

The price hike at the pumps this week comes as fuel companies pass on increases in the cost of their long range orders. Petrol is 20c more expensive and diesel 18c more, on average, than in September 2011.

Consumers Association chief executive Dermot Jewell hit out at the increases, warning of the extra burden they will place on struggling consumers.

AA director of consumer affairs Conor Faughnan said: "It has been the year from hell for fuel prices." He called on the Government to cut fuel taxes in the next Budget.

So that's just over $116 to fill your average family car's gas tank once, and it's predicted to be over $9 per gallon by the end of the year. And yes 72% of the price being taxes is ridiculous, before you say it....

Yep, I've heard its insanely expensive at the pump in your part of the world. I wonder, however, what the averager Irishperson's income is there? What is minimum wage? How much is a loaf of bread as compared to say...where I live?

by Marconius Sat Aug 25, 2012 11:16 am

Dennis324 wrote:
*Chuckle* Well, I'm not trying to play upon your sympathies on this issue man. Your incurably biased I'm afraid. Even moreso than myself on the issue of Christianity. But I do use key words like "oil Barons" because they remind me of the old Cattle Barons of the old west. Not meant as an insult, justs an easy and accurate way to describe the powers that be in the oil industry. The oil barons are diffeent from the guys that work on the platforms as far as I am concerned. JR Ewing was an oil baron. Jett Rink (James Dean of the film 'Giant') was an oil baron. Lol!

Knowledge of the world's largest industry is not bias. Especially when 95% of the world knows nothing at all about it, yet still choose to complain. Do yourself a favor. Read technical documents on oil field operations. Learn the steps oil goes through before it gets to the pump. See how many hands it goes through. See how much money, technology, research, equipment, manpower, blood, sweat, and tears it takes to get that gallon of gas into your tank. Then come back and tell me you are being ripped off.

I'm not asking you to become an expert on the matter. I would just like for you to know enough to make lucid, non-emotionally driven arguments based off of facts pertaining to the situation. Maybe then you will see that I am not bias, I just choose not to bitch about a topic unless I actually know something about that topic.

by Marconius Sat Aug 25, 2012 12:21 pm

Dennis324 wrote:Sure if I were dumb enough to buy it by the bottle in the store. But I guarantee you that I can take a hose and fill up a 50 gallon drum with water at the house and it would cost me practically nothing. But if I filled up that same drum with gasoline, or oil I'd go broke.

Even still the profit margin of tap water is a greater percentage per unit than gas from the pump, regardless of the total cost you pay. As it sits now, the national average price/gallon of public water is about $0.02 (based on a 5000 gallon/month useage and a national average water bill of $74/month.....mine is much less at about $40/month). It costs less than $0.01 to produce and dispose of public water so your markup is much more than gasoline. Of course the more you use, the more the price increases. It can get higher than $3.00/unit, depending on where you live and what time of the year it is (some places get over $5.00/unit), if you use a lot so I would caution against filling up too many 55 gallon drums.

That is what you fail to see. Price alone does not indicate greed. Total profits do not indicate greed. Individual price above cost (unit profit) does. If it costs me $3/gallon to make, package and distribute peanut butter and I sell it for $6/gallon, I have a 100% markup and profit. That could indicate greed. If it costs me $3/gallon to make, package, and distribute gasoline and I sell it for $3.50/gallon then it shows less greed on my part.

Even if I were to make less profit per unit on gasoline, I would still outstrip the total profits made by manfacturing peanut butter because I move 1000's more units, but that does not mean that I am greedier than the guys at Jiffy. See the difference???

by Dennis324 Sun Aug 26, 2012 1:51 pm

Eh, thats rationalizing my friend. Thats the sort of talk you guys are using to justify your sky-high gas prices. You're arguments are based on how much it costs to produce and what percentage profit you make vs some other product. Thats big business thinking. First of all, if you have to pay $40/month for water (I assume you mean home use), then something is drastically wrong. Your getting ripped off unless you are constantly filling up your swimming pool. My water bill is $13/month.

Producing gasoline is harder than producing water. I get that. But if the people producing water did what the oil barons do, and were shipping our surplus overseas in order to artificially inflate the price here at home, we'd be screaming bloody murder about that too! Very Happy

Also, the total cost to the consumer is the only thing we are concerned with. As a consumer, I'm waaaaay more worried about my wallet than your silly profit margin. My argument is based in the reality of how much it costs me at the pump. Your profits and whether you are able to buy a new house vs a new tv....I dont care about that. I'm disabled and still trying to exist in a trailer man. I'm worried about how I'm gonna pay for my utilities. I could care less about your profit margins. And THAT...is what you guys in the industry fail to see.

So trying to make me think that water costs more than oil or gas is gonna fall on deaf ears. Look, I was a defender of American oil for many years until I saw the report of how the oil companies were making record profits and were sending their surplus to other counties. Until that day, I thought it was truly all about supply and demand in this country. And I had hoped that we could (1) open up new areas to explore and get oil, and (2) find ways to reduce demand. I had thought that if demand here at home went down, prices at the pump would fall as well.

But the system is rigged. We can produce more oil here AND reduce American consumer demand and it wont matter. The oil Barons will merely ship it to Asia and keep the price high. We cant win.

by **Bryant** Sun Aug 26, 2012 11:10 pm

Dennis324 wrote:Eh, thats rationalizing my friend. Thats the sort of talk you guys are using to justify your sky-high gas prices. You're arguments are based on how much it costs to produce and what percentage profit you make vs some other product. Thats big business thinking. First of all, if you have to pay $40/month for water (I assume you mean home use), then something is drastically wrong. Your getting ripped off unless you are constantly filling up your swimming pool. My water bill is $13/month.

Producing gasoline is harder than producing water. I get that. But if the people producing water did what the oil barons do, and were shipping our surplus overseas in order to artificially inflate the price here at home, we'd be screaming bloody murder about that too!

Also, the total cost to the consumer is the only thing we are concerned with. As a consumer, I'm waaaaay more worried about my wallet than your silly profit margin. My argument is based in the reality of how much it costs me at the pump. Your profits and whether you are able to buy a new house vs a new tv....I dont care about that. I'm disabled and still trying to exist in a trailer man. I'm worried about how I'm gonna pay for my utilities. I could care less about your profit margins. And THAT...is what you guys in the industry fail to see.

So trying to make me think that water costs more than oil or gas is gonna fall on deaf ears. Look, I was a defender of American oil for many years until I saw the report of how the oil companies were making record profits and were sending their surplus to other counties. Until that day, I thought it was truly all about supply and demand in this country. And I had hoped that we could (1) open up new areas to explore and get oil, and (2) find ways to reduce demand. I had thought that if demand here at home went down, prices at the pump would fall as well.

But the system is rigged. We can produce more oil here AND reduce American consumer demand and it wont matter. The oil Barons will merely ship it to Asia and keep the price high. We cant win.

What do you think is a fair percent profit per unit? If you were granted the power to dictate that oil companies can only make x% profit/gallon, what would you set it at? While I have no sympathy toward oil companies (sorry Mark, too many stories about how little loyalty many have to their geologists), I think Mark made a reasonable argument. The companies consistently set record profit not necessarily because of price gouging (although I suspect that was a major factor a couple years ago when the price of gas was changing rapidly on a daily basis), but rather because petrol is one of the most purchased commodities and the market keeps growing every day.

by Marconius Mon Aug 27, 2012 11:03 am

Dennis324 wrote:Eh, thats rationalizing my friend. Thats the sort of talk you guys are using to justify your sky-high gas prices. You're arguments are based on how much it costs to produce and what percentage profit you make vs some other product. Thats big business thinking. First of all, if you have to pay $40/month for water (I assume you mean home use), then something is drastically wrong. Your getting ripped off unless you are constantly filling up your swimming pool. My water bill is $13/month.

Producing gasoline is harder than producing water. I get that. But if the people producing water did what the oil barons do, and were shipping our surplus overseas in order to artificially inflate the price here at home, we'd be screaming bloody murder about that too!

Also, the total cost to the consumer is the only thing we are concerned with. As a consumer, I'm waaaaay more worried about my wallet than your silly profit margin. My argument is based in the reality of how much it costs me at the pump. Your profits and whether you are able to buy a new house vs a new tv....I dont care about that. I'm disabled and still trying to exist in a trailer man. I'm worried about how I'm gonna pay for my utilities. I could care less about your profit margins. And THAT...is what you guys in the industry fail to see.

So trying to make me think that water costs more than oil or gas is gonna fall on deaf ears. Look, I was a defender of American oil for many years until I saw the report of how the oil companies were making record profits and were sending their surplus to other counties. Until that day, I thought it was truly all about supply and demand in this country. And I had hoped that we could (1) open up new areas to explore and get oil, and (2) find ways to reduce demand. I had thought that if demand here at home went down, prices at the pump would fall as well.

But the system is rigged. We can produce more oil here AND reduce American consumer demand and it wont matter. The oil Barons will merely ship it to Asia and keep the price high. We cant win.

Look Dennis, I can see you feel very strongly about this so I will begin to back off on this.

I will touch on two topics in closing:
1) The price of crude has remained stable the past few quarters. The price of gas meanwhile has fluctuated. Since a small percentage of gasoline is actually refined by the oil companies, does that mean it is the oil companies that are "gouging"??? Or does it mean Flint Hills, Dow, Hess, and others are gouging???

2) You know how you feel when those who know nothing about Christianity start railing against Christianity??? Well, that's kinda how I feel now. It isn't that we are biased. It is just that we know more about the topic at hand than the person doing the railing. I still love ya man, but I think you are not 100% right on this.

by Marconius Mon Aug 27, 2012 1:16 pm

Bryant wrote: but rather because petrol is one of the most purchased commodities and the market keeps growing every day.

And since it is a finite resource, it is beyond stupid to rely on it, as much as we do, for energy.

by Miles1 Mon Aug 27, 2012 5:44 pm

Marconius wrote:
And since it is a finite resource, it is beyond stupid to rely on it, as much as we do, for energy.

If we could manage to figure out how to harness stupidity for energy, we'd have a limitless supply forever... :-P

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