Gas Prices Hit Record Level In Ohio, Nation

[nysetrader78]

My2cents,

I agree with you that there are some major flaws in PJKs argument. In the past 30 years US refineries have indeed become far more efficient and thus have been able to increase capacity at the same time shrinking their geographic footprint. However, the real question is in this 30 year period has demand risen at a greater rate than refining capacity? If so then your side of the argument becomes null and void. These days with everyone driving around in SUVs and almost every family having multiple cars I find it hard to believe that the gasoline demand hasn't risen sharply over the 30 year period, and that is accounting for automobile efficiency increases.

Could anyone who has these statistics handy please post them. What are the 30 year rate increase for capacity and demand?

 

[EMRGLOBAL]

Gas at 4 bucks, is a non-issue.

Gas at 10, well them we have a situation.

People will pay up to 5 or 6 before the spending stops. The ones that are screwed are those in Massive debt with Credit Cards. Soon gas cards will be carrying loads of debt.

Those who make money will not be phased enough. So it is one less stop at Starbucks.

Who Cares,

Euro-land has been paying high gas prices for decades, all be it, most of it is taxes. Nevertheless, the upper middle class will survive, the lower middle to lower end will have to adjust their spending habbits.

 

[deviltrader]

Quote from Casey30:

And the rest of the world is graciously efficient perfect long-term thinkers and of course never wasteful. God bless the rest of the world for being so good and efficient. Whatever.

The US is easily #1 in per-capita gasoline/oil consumption, BY FAR.

And so what about the rest of the world? This thread is about gas prices in the US. Are you saying that because other countries are wasteful, it's ok for the US to be wasteful too? If so that's a terribly weak argument.

 

[Bear Plunger]

Quote from deviltrader:

I should feel sorry for Americans, but somehow I don't. I don't want to argue whether the stories about refining capacity are made up, about whether tough environmental regulations are driving prices up (to some extent I'm sure they do....). We are where we are with gas prices and the dependency on the automobile.

I don't care if gas goes up to $5/gal next month. Americans are whiny little crybabies. This country wants the convenience and luxury of 5000 lbs individual transporation but doesn't want to pay the costs. Too bad, I don't feel sorry for anyone. People in the US were too naive or stupid to think long-term, and thus got into this situation where a handful of oil companies have a firm over millions of peoples lives. You reap what you sow.

There is some truth to what you say. Standard Oil has been put back together again, and it's a wonderful thing. We are slowly seeing the greatest fleecing of the american consumer. But I want it to stay this way and get worse. The beauty of the situation is, most americans either won't believe it, or it's too late and they are already in it.

I'm an oil speculator so these are very optimistic times for me...all at the expense of the common American. Deviltrader, I don't think that ALL americans are this way...just alot of them...or ENOUGH of them I should say. We need them though. There always has to be someone on the losing side.

100$ barrel oil here we come. I'm still wondering how the stock market will react once we start trading above $70.00 for light sweet crude oil.

 

[my2cents]

Quote from PJKIII:

2Cents - Hadn't known those figures, but I'll trust you as a reliable source being so near to it all. Interesting point on the outsourcing of refining, but my question to you is: why aren't we getting the products we need? I know refining capacity and efficiency has improved (was not aware how greatly the number of refineries had dropped), and expansions to existing refineries have been made, but with daily refinery shutdowns for various reasons, we have a problem amassing necessary stockpiles of products for the summer, and as rich as we are I think we should be updated and have sufficient capacity to meet demand. The money is there to do it, but the profit motive is not...

PJKIII-

You are absolutely right. We have a problem amassing necessary stockpiles of products for the summer. But the problem doesn’t exist in refining capacity the problem exists with finished product storage. Take a look for yourself:

http://bp2.blogger.com/_jkAmr21xCuQ...AJM/PNYGGnJWcYM/s1600-h/missing+oil+tanks.JPG

Tell me what is missing? That’s right, empty fields where the tank farms use to be. Do a map search on Google and look at the satellite photos of the storage facilities surrounding any refinery in the US and it is the same story time and time again. From 1982 when we had 90,207,000 barrels of U.S. refinery finished motor gasoline working storage capacity to a peak of 102,646,000 in 1994 today we rely on just 62,739,000. That’s a 48% decline in storage capacity in 12 years. Why is that? Because it costs money to hold finished inventory in reserve. Think about that. Oil companies today are utilizing “Just In Time” inventory practices just like any other manufacturer in the world today.

As we all know there are two ways to increase prices. The first is by increasing demand and the second is by decreasing supply. The way the current supply/demand equation is working for the oil companies it appears that they’ll be sitting in the catbird seat for some time to come.


nysetrader78-

Quote from nysetrader78:

However, the real question is in this 30 year period has demand risen at a greater rate than refining capacity? If so then your side of the argument becomes null and void. These days with everyone driving around in SUVs and almost every family having multiple cars I find it hard to believe that the gasoline demand hasn't risen sharply over the 30 year period, and that is accounting for automobile efficiency increases.

Could anyone who has these statistics handy please post them. What are the 30 year rate increase for capacity and demand?

Au contraire monsieur my argument is hardly null and void. You need to read again what I had posted. In this country demand has outstripped capacity about 10 years ago. As I had also mentioned: “We have now reached a point in time where we are outsourcing the production of our finished distillates to overseas plants much the same way any other consumer product is manufactured today.” This is where we are making up the difference between what we can refine domestically and what we need to import to satisfy our demand. I guess you missed the following on the building of what is planned to be the sixth largest oil refinery in the world:

From: News OneIndia
Friday, May 18 2007 11:55(IST)
US to assist India in building a $6 bln oil refinery

Washington, May 18: The United States will help Reliance Petroleum Ltd (RPL) to build a six billion dollar state-of-the-art oil refinery and petrochemical complex at Jamnagar in Gujarat.

The project will utilise the US equipment, technology and services financed by a 500-million-dollar loan guarantee from the Export-Import Bank of the United States (Ex-Im Bank), according to a release here yesterday.

The RPL's primary shareholder, Reliance Industries Ltd (RIL), is a Fortune 500 company and the largest private company in India. The new refinery will be the world's sixth largest and will be located adjacent to RIL's existing refinery and petrochemical complex in Jamnagar. Together the two refineries will comprise the largest refining complex in the world.

Expected to be completed in December, 2008, the refinery will be among the most modern and complex in the world, capable of producing high quality fuels such as gasoline, jet fuel diesel, alkylates, naphtha,kerosene, as well as polypropylene, the release said.

The refinery's Nelson Complexity Index is 14, compared to the average index of 10 in the United States. This is a measure of the refinery's technological processing capabilities.

Bechtel Corp, Houston, Tex, is providing design, procurement, project management and other services.

Major US exporters also participating in the project include: Black & Veatch International Co, Kansas City, Mo, for sulfur recovery and gas treatment units; Dow Global Technologies, Inc, Midland, Mich, for licensing and services for the polypropylene plant process; Foster Wheeler Corp, Clinton, N J, for fired heaters for the refinery's coker; and UOP LLC, Des Plaines, Ill, for the catalytic converter reactor section and PSA (Pressure Swing Absorption) packages.

Citibank N A, New York, N Y, is the guaranteed lender on the transaction.

''Ex-Im Bank's long and successful relationship with the RIL group of companies, dating back to the early 1980s, has contributed to growth in the dynamic Indian market while helping to create US jobs,'' said Ex-Im Bank Chairman and President James H Lambright.

''We hope to support future RIL projects in other industrial sectors.'' ''This transaction is yet another affirmation from Ex-Im Bank of the growth potential that they see in India and in particular the Reliance Group,'' said Chairman and Managing Director of RIL and Chairman of RPL Mukesh Ambani.

''We look forward to deepening and strengthening our valued relationship with Ex-Im Bank.'' Ex-Im Bank's exposure to India , including the current project, is approximately 3.1 billion dolllars, with 1.17 billion dollars in additional pending final commitments.

Ex-Im Bank is an independent US government agency that assists in financing the export of US goods and services to markets around the world, through export credit insurance, loan guarantees, and direct loans.

In fiscal year 2006, Ex-Im Bank authorised over 12.1 billion dollars in transactions supporting an estimated 16.1 billion dollars in US exports.

Oh, by the way, you want those 30 year stats? They're all right here: http://www.eia.doe.gov/
Go knock yourself out, and welcome to the new world order.

Just,
my2cents