National Gas Out Day on Friday

[MTAtech]

Originally Posted by motoracer51

You people that supported Obama(Bush wasn't much better)and his energy policy should thank him for the the prices.

No new drilling or refineries, along with an additional war started in a Middle Eastern oil producing country and here we are.

This notion that the President is stopping oil companies from drilling is a false narrative. Oil companies have thousands of approved locations that they have the right to drill on but are choosing not to drill. Why? Because oil supply is high (see chart)



This is just today: Crude Oil Advances on Reports Saudi Arabia Reduced Production This Month

The U.S. is a capitalist economy and private companies make decisions based upon what's good for them, not the public at large. Oil companies have no incentive to flood the market with oil just to drop the price for you. They make record profits when prices are high. In addition, oil in the ground is an investment that appreciates over time. There is no reason, from their perspective, to drill it now and sell it at a lower price than they can in the future. That's exactly why the Saudis are cutting their supply -- there is enough supply to meet demand at the current price.

As for refineries, when was the last time you passed a gas station and saw a "no gas today" sign? I didn't see one recently either. The fact is that the oil companies haven't built new refineries for good reason. They don't need more of them. Building new refineries are expensive and it doesn't make business sense to build a new one just for it to be used below capacity. It's much more sensible for oil refineries to be retrofitted to output more capacity.

[Walter Greenspan]

Originally Posted by MTAtech

This notion that the President is stopping oil companies from drilling is a false narrative. Oil companies have thousands of approved locations that they have the right to drill on but are choosing not to drill. Why?

Oil companies may have leases but they do not have permits for many of these leases.

Originally Posted by MTAtech

As for refineries, when was the last time you passed a gas station and saw a "no gas today" sign? I didn't see one recently either. The fact is that the oil companies haven't built new refineries for good reason.

Here, too, obtaining local zoning permission to build a refinery has made it near impossible to build much needed new refineries.

So, instead of building refineries to make gasoline, in addition to very large crude oil imports, the U.S. imports a lot of gasoline from the Caribbean and Europe.

[Pequaman]

Originally Posted by Walter Greenspan

Oil companies may have leases but they do not have permits for many of these leases.




Here, too, obtaining local zoning permission to build a refinery has made it near impossible to build much needed new refineries.

So, instead of building refineries to make gasoline, in addition to very large crude oil imports, the U.S. imports a lot of gasoline from the Caribbean and Europe.

If this were true, then why are refineries at 80% run rates today?

edit: now up to 84%, from 79% last month. Still a lot lower than potential output.

[Walter Greenspan]

Originally Posted by Pequaman

If this were true, then why are refineries at 80% run rates today?

edit: now up to 84%, from 79% last month. Still a lot lower than potential output.

Many refineries are taking downtime on a rotating basis as they convert from winter blend to summer blend.

[Pequaman]

Originally Posted by Walter Greenspan

Many refineries are taking downtime on a rotating basis as they convert from winter blend to summer blend.

stock answer and a great excuse. wink & nod . We'll see where they're at in May. Damage is already done from the abnormally low rates last month.

[Port North]

The high gas prices are caused by three things:

1. Oil production worldwide has been on a plateau since the early to mid 2000's. Newly found oil fields are smaller and are more expensive to being on-line due to either being in deep water or from unconventional sources (tar sands)

2. Demand for oil has sigificantly increased in China and India. Even if we cut back in demand, increases in demand in those countries will outpace our cuts.

3. The value of the U.S. dollar relative to other currencies has tanked making oil more expensive to purchase in dollars. With the Fed's policy of Quantitative easing (printing money) expect the dollar to continue its downward trend.

Combine all three together and you get $5 gas.

[IMG]http://greenecon.net/wp-content/uploads/2008/05/china.jpg
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[ENFD240]

but we can stop all this by just not buying gas on a certain day? right, guys? :crossesfingers:

[MTAtech]

Originally Posted by Port North

The high gas prices are caused by three things:

1. Oil production worldwide has been on a plateau since the early to mid 2000's. Newly found oil fields are smaller and are more expensive to being on-line due to either being in deep water or from unconventional sources (tar sands)

2. Demand for oil has significantly increased in China and India. Even if we cut back in demand, increases in demand in those countries will outpace our cuts.

3. The value of the U.S. dollar relative to other currencies has tanked making oil more expensive to purchase in dollars. With the Fed's policy of Quantitative easing (printing money) expect the dollar to continue its downward trend.

Combine all three together and you get $5 gas.

If the first two are true, why did the Saudis just cut production today? They obviously believe that there is sufficient supply and don't want to undermine the price.

If the second was the explanation, why is crude just as expensive in Europe? Besides, a year ago, the dollar was 0.77 Euros. Now it's 0.71. That doesn't explain a doubling in price of crude.

This should settle oil refinery questions:


You should all read this: The Mirage of a Growing Fuel Supply - Op-Ed - NYTimes.com