The Gas Thread Revisited

[MassHavoc]

Convenient that these "unexpected problems" with supply always happen around the holidays.

 

[IceHogsFan]

Convenient that these "unexpected problems" with supply always happen around the holidays.

True Dat





It also plays into my discussion of how infrastructure makes an impact of how we pay for gasoline.



It is some ridiculous number of years in the U.S. since an oil refinery has been built like 20, 30 years.

How much has consumption increased during that same time period?



Edit. An article from 2004!

There are plenty of reasons gas costs so much, but one of them is that the United States doesn't have enough refineries. The National Petrochemicals and Refiners Association says that the last new refinery built in the United States was Marathan Ashland's Garyville, La., plant—and it was completed in 1976. According to this report, between 1999 and 2002 refining capacity in the United States rose only 3 percent, squeezing up prices since demand grew much faster than that. Who's to blame for the fact that refining supply can't keep up with our thirst for oil? Probably you.



It makes sense to refine oil relatively near where it is produced or—in the case of imported oil—near its port of entry. Refineries are located all over the country. But the largest clusters, as one might expect, are near the water and population centers: the Gulf Coast, coastal California, the Great Lakes, and the Northeast. Unfortunately for refiners, about half of Americans live within 50 miles of the coast. And because of the concentration of people—and wealth—near the continental shelves, land is simply more valuable the closer you get to the water. As a result, shore dwellers have the most to lose from developments that might affect quality of life.

http://www.slate.com/id/2102031/

 

[Tater]

Illinois also has extremely stringent emissions and gas quality rules and a special grade of gas is required in IL which raises costs. (I'll try to find a link)

It's amazing that a state that allows raw sewage to be dumped into the Chicago River, is that tough on emissions.

 

[MassHavoc]

Illinois also has extremely stringent emissions and gas quality rules and a special grade of gas is required in IL which raises costs. (I'll try to find a link)

It's amazing that a state that allows raw sewage to be dumped into the Chicago River, is that tough on emissions.

I had not heard that before, interesting. I see 87, 89, and 91(?) octane everywhere, do you mean that within these 3 categories they are more stringently regulated than other states?

 

[Tater]

I had not heard that before, interesting. I see 87, 89, and 91(?) octane everywhere, do you mean that within these 3 categories they are more stringently regulated than other states?

Maybe I worded it wrong. It's not the octane rating.

It was being discussed on the radio and they had on a couple Plant Managers from area refinery. Basically, there are only a few refineries capable of produced the quality of gas required in this state and that makes it more expensive. I'm having trouble googling it, not sure which keywords to use.

 

[BigPete]

http://news.yahoo.com/s/ap/20110525/ap_on_bi_ge/us_oil_market_manipulation_2



Regulators: Firms manipulated oil prices in 2008

WASHINGTON – U.S. commodity regulators are suing three companies and two individuals claiming they manipulated crude oil futures prices on the New York Mercantile Exchange over four months in 2008.



The Commodity Futures Trading Commission filed the civil complaint Tuesday in New York against Parnon Energy Inc., Arcadia Petroleum Ltd. and Arcadia Energy (Suisse) SA, and two men accused of directing the trading scheme: James T. Dyer of Australia and Nicholas J. Wildgoose of California.



Regulators claim the defendants traded futures and other contracts based on the price of West Texas Intermediate light sweet crude oil, a benchmark for crude oil prices.



Then they allegedly took steps to artificially drive the price up, then back down, reaping more than $50 million in unlawful profits.



The complaint seeks that the defendants give up profits from the scheme, among other penalties.



Regulators contend the defendants bought large quantities of oil, for which they had no commercial use, in order to artificially tighten the supply of crude oil at a major facility in Cushing, Okla. The supply at that facility is a key driver in the price of West Texas Intermediate light, sweet crude oil, so any tightening of supply moves prices higher.



With prices rising, the companies took a short position on oil derivatives and sold them off. Then, they'd sell off most of their oil in one day, pushing supplies higher and prices lower to profit from their short derivatives position, regulators claim.



The price manipulation scheme allegedly took place between January and March 2008, and the companies tried it again the following month.



That period of time coincided with a sharp run-up in oil prices, fueled by speculation that soaring growth from China, India and other emerging economies would drive demand for crude. A weaker dollar helped drive up prices to a record $147.27 a barrel on July 11, 2008, as investors dumped investments in the U.S. currency for crude.



Prices, which many industry analysts described as out of control, began to collapse shortly afterward as the world's biggest economies began to falter.



Pump prices hit the highest levels since 2008 earlier this month, but started falling as oil retreated from a high near $114 a barrel.



Still, the prospect of higher gas prices has prompted the Obama administration to step up efforts to crack down on fraud or manipulation in the oil markets.



President Barack Obama has ordered his Justice Department to form a task force to root out any abuses.

Wow, how many times have I mentioned the commodity market's role in artificially raising the price at the pump???????????????????????????

 

[BigPete]

http://news.yahoo.com/s/nm/20110525/bs_nm/us_cftc_oil_manipulation_8



Oil trader Arcadia to CFTC: See you in court

NEW YORK (Reuters) – Global trading house Arcadia Energy rejected on Wednesday claims that its traders had manipulated crude oil markets in early 2008, saying it would fight the suit brought by U.S. regulators in court.



"The CFTC is wrong on both the facts and the law," said Colin Hurley, the Chief Financial Officer of Arcadia, in an e-mailed statement to Reuters.



The quick rebuttal sets up a rare public show-down over trading practices in the opaque physical oil market. Many such past cases have been settled out of court, and regulators have struggled in the past to make manipulation charges stick.

...

 

[IceHogsFan]

President Barack Obama has ordered his Justice Department to form a task force to root out any abuses.

 

[BigPete]

You could remove 'Barack Obama' from that statement and it would not only be just as true but just as funny. They are ALL full of shit. Politicians including the POTUS care about one thing, their wallet and how fat it is.

 

[Tater]

You could remove 'Barack Obama' from that statement and it would not only be just as true but just as funny. They are ALL full of shit. Politicians including the POTUS care about one thing, their wallet and how fat it is. re-election.

Fixed it for you.

 

[IceHogsFan]

You could remove 'Barack Obama' from that statement and it would not only be just as true but just as funny. They are ALL full of shit. Politicians including the POTUS care about one thing, their wallet and how fat it is.

Point is that Bush got alot of heat for his connections to the oil industry and rightfully so. Barack?



It proves my point that his position on green energy and such is benefited from high gas prices and he will not do anything about it. So, if POTUS is not willing to do something about it, then why doesn't Congress pass legislation that curtails commodities trading in the oil/ gas markets? The quickest way is for legislation to be passed that mandates those buying options have to do it with cash and not on borrowed basis.



Next you start drilling more in the U.S. and increasing oil refineries throughout the U.S. and you can start by doing so on closed military installations that has many brown fields already. Expansive employment and rebuilding locales that have been decimated by the closing of military installations of the last several decades.

 

[R K]

You could remove 'Barack Obama' from that statement and it would not only be just as true but just as funny. They are ALL full of shit. Politicians including the POTUS care about one thing, their wallet and how fat it is.

Yup.

 

[IceHogsFan]

June 24, 2011

WASHINGTON — Wary of a new surge in gas prices, the Obama administration said yesterday it is selling off 30 million barrels of oil from the country’s emergency reserves as part of a broader international response to lost oil supplies caused by turmoil in the Middle East and North Africa, particularly Libya.



Even so, the 30 million barrels to be sold by the United States represent less than two days’ worth of domestic oil consumption and about three days of oil imports.



http://articles.boston.com/2011-06-...serves-supply-disruptions-days-of-oil-imports

 

[MassHavoc]

June 24, 2011

WASHINGTON — Wary of a new surge in gas prices, the Obama administration said yesterday it is selling off 30 million barrels of oil from the country’s emergency reserves as part of a broader international response to lost oil supplies caused by turmoil in the Middle East and North Africa, particularly Libya.



Even so, the 30 million barrels to be sold by the United States represent less than two days’ worth of domestic oil consumption and about three days of oil imports.



http://articles.bost...-of-oil-imports

That news is almost a week old now, what am I missing?

 

[IceHogsFan]

Barrel of oil today at $79- $80. Price at pump still at $3.70 a gallon.

[font=Verdana, Arial, Helvetica, sans-serif]September 24, 2010[/font] [font=Verdana, Arial, Helvetica, sans-serif]$76.49[/font]

[font=Verdana, Arial, Helvetica, sans-serif]September 25, 2009[/font] [font=Verdana, Arial, Helvetica, sans-serif]$66.02[/font]

[font=Verdana, Arial, Helvetica, sans-serif]September 26, 2008[/font] [font=Verdana, Arial, Helvetica, sans-serif]$106.89[/font]

And how much was a gallon of gas a year ago? Two years ago?​

[url]http://www.nyse.tv/crude-oil-price-history.htm[/url]​

 

[MassHavoc]

IHF on your dates above can you list what the price at the pump was for those dates? Or is that what you listed the link for?



I didn't realize that Oil had dropped to 80 bucks. I figured it was up around 100, that seems to me to be a magic number.



I've always been curious about how unstable the relationship is between price barrel vs. pump. I get that their can be a delay and such. But it seems to me that both prices are driven by the same supply and demand. (on the majority, I realize that crude is used for more than just gas in some cases)

 

[TSD]

IHF on your dates above can you list what the price at the pump was for those dates? Or is that what you listed the link for?



I didn't realize that Oil had dropped to 80 bucks. I figured it was up around 100, that seems to me to be a magic number.



I've always been curious about how unstable the relationship is between price barrel vs. pump. I get that their can be a delay and such. But it seems to me that both prices are driven by the same supply and demand. (on the majority, I realize that crude is used for more than just gas in some cases)

Yeah I think I posted something like IHF did earlier in this thread. Where a few years ago Oil was higher than what it was when I made the post and we were still paying 4 bucks, when a few years ago at higher oil prices we were paying under 3 dollars a gallon.



Its like once they get gas up to a certain price, no matter what oil costs they wont bring it down to the previous levels again. Id lay money down we never see gas below 3 dollars a gallon again, no matter what oil costs (unless it goes to like the mid 90's prices of 20-30 a barrel which I highly doubt).

 

[MassHavoc]

Does anyone know the other external factors that affect the price at the pump. It can't be just oil price. How does the economy effect it? Legislation removing tax breaks, has there been any? Mergers or Natural disasters? How can it still be so high when the price has dropped and they released that reserve that didn't really do anything.

 

[winos5]

I paid $3.29 last weekend on Galveston Island and was thankful to find it that cheap. $3.38 this morning where I live.

 

[TSD]

Does anyone know the other external factors that affect the price at the pump. It can't be just oil price. How does the economy effect it? Legislation removing tax breaks, has there been any? Mergers or Natural disasters? How can it still be so high when the price has dropped and they released that reserve that didn't really do anything.

heres what i posted I was off on what I was talking about, but same premise:



may 2008

Oil price per barrel: $145.

Average Price at the pump: $4.00



Sept 2011

Oil Price per barrel:$80

what im paying: $3.79



That doesnt seem very logical now does it? Oil is 65 a barrel cheaper than 3 years ago and Im paying only 20 cents less? come onnnnnn.



I would say its possible cost to refine etc etc was costing more, but I find that dubious.