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Razorguns
Well-known member
I found this on another board. Real gem:
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To All:
I know that this is long and what not, but read it, hopefully I can teach you something!!!
I live in Kuwait right now and read the English edition of the "Arab Times" every day. Every day there are at least a page and a half dedicated to oil and the prices that are being paid (imagine that!), I also keep up with the American news as well. The articles here are consistently stating that they have plenty of oil here, GCC's (Gulf Coast Country's (Arab/Persian Gulf) oil minister stated last week that the countries here have oil sitting at the ports waiting for a place to go. That means that there is an OVER supply problem. The last thing they want here is sky high oil prices. This is due to the fact that in the long run that it hurts demand due to alternative sources of energy being found, and then not as much oil being bought and the resulting crash of oil prices will hurt them. The aim for the countries here is to have oil at $25-$32 per barrel, this way they sell more barrels 20 years from now than if oil stays at the levels now, thus ensuring their long term stability. The countries here are keenly aware of their dependence on our oil money, most of them have some kind of monarchy and they want to be around twenty years from now.
The problem is NOT supply of oil, it is REFINERY CAPACITY!, and to a lesser extent, out of control oil speculation. Look at it this way, the gas that you are putting in your car/truck today was bought on the speculation markets about 3 months ago, and then actually delivered to the US about one month ago. Katrina happened about a week and half ago, the oil that was used to make that gas was already here 2 - 3 weeks before that. Why did the price of your gas go up $.50 - $1.00 in the last week? LOSS OF REFINING CAPACITY!!/price gouging. Yes some oil pumping capacity was lost in the Gulf of Mexico, but in the over all scheme it was a very small percentage.
The last refinery was built in the US in the early 1970's, how many more cars are on the road now than in the 1970's? Another way to think about this and realize that the oil companies are at fault here:
In 1981 oil per barrel was $93 - $95 in 2005 dollars, gas was an average of $2.67 (close) per gallon in 2005 dollars. Today oil is about $70 per barrel and gas is $3.25 - $4.25 or more per gallon. That means that oil was more expensive then, yet gas was up to $1.60 cheaper per gallon. Did you knw that Exxon/Mobil profits were $38 BILLION in the June/July/August quarter? Do you realize that is $420 MILLION PER DAY????!!! From one company????!!!!!!! Do you smell what I smell?!
The following is the reason that oil companies WILL NOT build any more refineries (sp?):
A refinery (large one) costs between $3 - $5 billion to build. Let's say you are the owner of a company, would you spend money on something that is going to ultimately make your profits fall? Remember, more refining capacity equals lower fuel prices for you and less profits for them. Make sense now? The energy bill that was signed into law this summer even provided tax breaks for companies who build refineries. Do you see any of them jumping on that? Nope.
Now also pay attention to the oil markets, where almost everything is speculative. When leading economic indicators are down, oil goes up, event though that would indicate less need for gas. When the leading economic indicators go up they say that indicates more demand, oil goes up. Al-Quada comes out with a tape, oil goes up, they don't come out with a tape, oil goes up (they may be up to something , don't you know!) "someone" , notice they never say who, predicts that the winter is going to be harsh, (don't "they" always say that?) oil goes up. Think about this, when is the last time oil went down? What news do you think it would take to make it go down? Now you understand why it is the private interests driving the price and not pure supply and demand. Think about it the same as the housing market situation, there are speculators that keep "flipping" houses, how many houses do they artificially take out of the supply stream? Making the prices climb, making them more profit? What reason do they have to stop? None.
Here is what the Arabs predict for the future of oil prices, I tend to agree:
Oil prices will drop (possibly sharply) in the next year due to these facts:
Elections are next year, if oil prices stay where they are, who are we, as Americans going to take it out on? Traditionally our politicians. Why would the Republicans (no I'm not a democrat!) want to lose the majority? They don't. They will hold some senate investigations, someone will be threatened with prosecutin, a few token refineries will be built, and magically prices will come down, even though these refineries will be small and not really much percentage wise.
The Arabs look at current oil prices as a bubble market, much like the tech. boom/bust of the late 1990's and the current housing bubble in the US. It will drop, and when it does it will be sharply.
We all need to make noise to our politicians, let them know that we know what is going on, let them know that they will be unemployed November '06 if they don't fix it NOW!!!!!!!!
Anyone care to comment?
Just my $.02 or $1.02 this time,
FMRBPA
--
To All:
I know that this is long and what not, but read it, hopefully I can teach you something!!!
I live in Kuwait right now and read the English edition of the "Arab Times" every day. Every day there are at least a page and a half dedicated to oil and the prices that are being paid (imagine that!), I also keep up with the American news as well. The articles here are consistently stating that they have plenty of oil here, GCC's (Gulf Coast Country's (Arab/Persian Gulf) oil minister stated last week that the countries here have oil sitting at the ports waiting for a place to go. That means that there is an OVER supply problem. The last thing they want here is sky high oil prices. This is due to the fact that in the long run that it hurts demand due to alternative sources of energy being found, and then not as much oil being bought and the resulting crash of oil prices will hurt them. The aim for the countries here is to have oil at $25-$32 per barrel, this way they sell more barrels 20 years from now than if oil stays at the levels now, thus ensuring their long term stability. The countries here are keenly aware of their dependence on our oil money, most of them have some kind of monarchy and they want to be around twenty years from now.
The problem is NOT supply of oil, it is REFINERY CAPACITY!, and to a lesser extent, out of control oil speculation. Look at it this way, the gas that you are putting in your car/truck today was bought on the speculation markets about 3 months ago, and then actually delivered to the US about one month ago. Katrina happened about a week and half ago, the oil that was used to make that gas was already here 2 - 3 weeks before that. Why did the price of your gas go up $.50 - $1.00 in the last week? LOSS OF REFINING CAPACITY!!/price gouging. Yes some oil pumping capacity was lost in the Gulf of Mexico, but in the over all scheme it was a very small percentage.
The last refinery was built in the US in the early 1970's, how many more cars are on the road now than in the 1970's? Another way to think about this and realize that the oil companies are at fault here:
In 1981 oil per barrel was $93 - $95 in 2005 dollars, gas was an average of $2.67 (close) per gallon in 2005 dollars. Today oil is about $70 per barrel and gas is $3.25 - $4.25 or more per gallon. That means that oil was more expensive then, yet gas was up to $1.60 cheaper per gallon. Did you knw that Exxon/Mobil profits were $38 BILLION in the June/July/August quarter? Do you realize that is $420 MILLION PER DAY????!!! From one company????!!!!!!! Do you smell what I smell?!
The following is the reason that oil companies WILL NOT build any more refineries (sp?):
A refinery (large one) costs between $3 - $5 billion to build. Let's say you are the owner of a company, would you spend money on something that is going to ultimately make your profits fall? Remember, more refining capacity equals lower fuel prices for you and less profits for them. Make sense now? The energy bill that was signed into law this summer even provided tax breaks for companies who build refineries. Do you see any of them jumping on that? Nope.
Now also pay attention to the oil markets, where almost everything is speculative. When leading economic indicators are down, oil goes up, event though that would indicate less need for gas. When the leading economic indicators go up they say that indicates more demand, oil goes up. Al-Quada comes out with a tape, oil goes up, they don't come out with a tape, oil goes up (they may be up to something , don't you know!) "someone" , notice they never say who, predicts that the winter is going to be harsh, (don't "they" always say that?) oil goes up. Think about this, when is the last time oil went down? What news do you think it would take to make it go down? Now you understand why it is the private interests driving the price and not pure supply and demand. Think about it the same as the housing market situation, there are speculators that keep "flipping" houses, how many houses do they artificially take out of the supply stream? Making the prices climb, making them more profit? What reason do they have to stop? None.
Here is what the Arabs predict for the future of oil prices, I tend to agree:
Oil prices will drop (possibly sharply) in the next year due to these facts:
Elections are next year, if oil prices stay where they are, who are we, as Americans going to take it out on? Traditionally our politicians. Why would the Republicans (no I'm not a democrat!) want to lose the majority? They don't. They will hold some senate investigations, someone will be threatened with prosecutin, a few token refineries will be built, and magically prices will come down, even though these refineries will be small and not really much percentage wise.
The Arabs look at current oil prices as a bubble market, much like the tech. boom/bust of the late 1990's and the current housing bubble in the US. It will drop, and when it does it will be sharply.
We all need to make noise to our politicians, let them know that we know what is going on, let them know that they will be unemployed November '06 if they don't fix it NOW!!!!!!!!
Anyone care to comment?
Just my $.02 or $1.02 this time,
FMRBPA
