What's new
By:
USCHO Fan Forum

This is a sample guest message. Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!

  • The USCHO Fan Forum has migrated to a new plaform, xenForo. Most of the function of the forum should work in familiar ways. Please note that you can switch between light and dark modes by clicking on the gear icon in the upper right of the main menu bar. We are hoping that this new platform will prove to be faster and more reliable. Please feel free to explore its features.

5 dollar gas...are we ready?

Status
Not open for further replies.
Re: 5 dollar gas...are we ready?

Tundra said:
It'll easily go up 50% ($150/barrel) if that happens. And gasoline will go over $6 if oil refiners keep the current margins. refining profit margin went up 50%,100%, 150%, 180% in the last 4 years. Even as gasoline demand has fallen every year.

EER_EPMRU_PF4_Y35NY_DPGd.jpg
Click to expand...

remember that oil is used for more than gasoline; roads and plastics are two examples of products that will have a steady demand as well. The demand for gasoline has dropped due to a myriad of factors including unemployment/underemployment and the general state of the economy. However, our economy is driven by oil so price shocks will only hurt it that much more. Its like a positive feedback mechanism.

Someone correct me if I am wrong, but without subsidies, would gas be roughly 10 $ / gallon?
 
Re: 5 dollar gas...are we ready?

unh_hockey said:
4 or 5 dollar gas wouldn't be pretty right now for most people. For me, I don't care. I fill up once every two weeks. Living where you work will become the new paradigm in the future. So will electric ( or gas powered) scooters =)
Click to expand...

Pretty much the same for me. The only thing gas prices do to me is it means less road trips in my vehicle, due to the poor gas mileage. However, my vehicle isn't really built for carpooling on said trips, so even that doesn't matter much.

And living where you work is probably more common right now that you think. I have a bunch of co-workers (and I'm in this bunch) that live within 10 miles of work; many of them live within 5 miles.
 
Re: 5 dollar gas...are we ready?

unh_hockey said:
Someone correct me if I am wrong, but without subsidies, would gas be roughly 10 $ / gallon?
Click to expand...

Yes. you would be wrong. The largest effect on gasoline is price of oil (according to EIA, oil refiners etc..). and next would be refining margin. As we've seen from the recent gasoline price of $3.50 when gasoline was $2.50 last year with similar oil price. Only difference being refining margin has increased 180% from last year.

http://biz.yahoo.com/e/111103/xom10-q.html
Third quarter 2011 Chemical earnings of $1,003 million were $226 million lower than the third quarter of 2010. Improved margins increased earnings by $50 million, while lower volumes decreased earnings by $110 million.

Refining margins increased earnings by $1.5 billion
Petroleum product sales of 6,386 kbd increased 20 kbd from 2010.
Click to expand...
 
Re: 5 dollar gas...are we ready?

joecct said:
What happens when the Euro crashes this spring/summer??
Click to expand...

loaded question isn't it? It would depend on what the spectacular default does to the banks. Again though, the sooner the better for all involved... cleanse these massive lies from the system and start over... the first one and the biggest one is the need and utility of the european super-state. Look at how much that's been sacrificed to its maintenance... European arrogance in the notion they could build such a thing has lead to where they are now... at a tremendous cost.

The problem is greed and ambition all around... these are the failings of man through and through and only vigilance prevents them... because even if you alter the social structure without vigilance you will return to the same trappings of persons and organizations. For now, on the grand and non-technical scheme I see this as all a game of how the dominoes are going to fall and who is going to get stuck with the worst... and the worst will go to the group with the most inept politicians who are stuck in the mold that we must maintain certain things at all costs... because it isn't that the system is too big to fail... its that their cultural and personal ego is too big to fail. They don't see this as the calamity of those around them but rather the calamity of their own work and personhood. This is why we've seen things get worse. We'll be in the same spot soon enough (reconciling the desire to give social services versus costs and utility... amongst other things)... but in the end we see its more about the egos of the politicians and high level business persons. The politicians want to preserve, build, and grow the social state because they've cast all their values as a human into it... with business persons they've cast their personhood into items... neither will be sacrificed without the great cost.... to others.

Nevertheless, at this point the game is to find ways to not get stuck with the worst of it... somebody is going to take it hard... may be several somebodies... but the sooner we clean the system the better it'll be... because as we know... compound interest is still compound interest... the longer we all go the more compounding the pain begins... no matter how good we think we deserve to be.
 
Re: 5 dollar gas...are we ready?

the ethanol mandates ended - more specifically the 0.45 $ per gallon refund as well as the 0.54 $ per gallon tariff on imports. While the 15 billion gallon mandate remains, this aught to shave off 6 billion of expenditures annually.
 
Re: 5 dollar gas...are we ready?

OK, now I'm beginning to wonder. My oil profits have gone down quite a bit. Only a $12 difference between West Texas and Brent. Yet, gas prices are where they are. Where's the money going? Obviously not the speculators, or I'd be seeing it...
 
Re: 5 dollar gas...are we ready?

FlagDUDE08 said:
OK, now I'm beginning to wonder. My oil profits have gone down quite a bit. Only a $12 difference between West Texas and Brent. Yet, gas prices are where they are. Where's the money going? Obviously not the speculators, or I'd be seeing it...
Click to expand...
Corporate execs increased their bonuses.
 
Re: 5 dollar gas...are we ready?

FlagDUDE08 said:
OK, now I'm beginning to wonder. My oil profits have gone down quite a bit. Only a $12 difference between West Texas and Brent. Yet, gas prices are where they are. Where's the money going?
Click to expand...
The refiners, presumably.

Unless it's getting eaten up by in-plant environmental-type stuff (and the information that I have strongly suggests that it is not), a high crack spread should inevitably lead to greater refining capacity and, ultimately, a fall in gas prices as supply increases.

That having been said, as I noted previously, the last information I saw had the crack spread coming down significantly toward the end of 2011.
 
Re: 5 dollar gas...are we ready?

Craig P. said:
The refiners, presumably.

Unless it's getting eaten up by in-plant environmental-type stuff (and the information that I have strongly suggests that it is not), a high crack spread should inevitably lead to greater refining capacity and, ultimately, a fall in gas prices as supply increases.

That having been said, as I noted previously, the last information I saw had the crack spread coming down significantly toward the end of 2011.
Click to expand...

New Years Resolution for 2012: Belts. :p:D

Raw price is 2.69 per gallon (assuming Brent and 42 gallons per barrel). Take the price outside where you are now, knock that down, and also the taxes paid (in NYS they're insane). Perhaps the delivery domino is also catching up?
 
Re: 5 dollar gas...are we ready?

FlagDUDE08 said:
But what corporations receives your pointing finger? Are you talking about the one that physically sells your gasoline? Refining? Delivery? Something else?
Click to expand...
Its probably all of them :p (I wasn't being very serious when I posted that, in fact, I'm usually not being very serious when I post anything on these boards)
 
Re: 5 dollar gas...are we ready?

FlagDUDE08 said:
But what corporations receives your pointing finger? Are you talking about the one that physically sells your gasoline? Refining? Delivery? Something else?
Click to expand...

It's Refining. The refining profit margin was up 180% from 2010-2011. If I read the Exxon Mobil 10Q correctly.

http://www.loc.gov/rr/business/BERA/issue5/refining.html
the oil and gas refining industry is dominated by only a few large corporations. The largest oil company is Exxon Mobil, with British Petroleum at 2nd,

The U.S. has the largest number of refineries (132) followed by China at 95, and Russia at around 45 refineries

In observing the top four countries in refining capacity, the U.S. has the largest refining capacity totaling 16.7 million barrels per day, Russia's refining capacity is at 5.4 million barrels per day, Japan at 4.7 million, and China at 4.5 million barrels per day
Click to expand...
 
Re: 5 dollar gas...are we ready?

Tundra said:
It's Refining. The refining profit margin was up 180% from 2010-2011. If I read the Exxon Mobil 10Q correctly.

http://www.loc.gov/rr/business/BERA/issue5/refining.html
Click to expand...

Understandable. Actually, after a quick head calculation, it seems that the difference between basic crude price and final gas price is lower than it was around 2007 (or so). It's at $1 vs. $1.25. Granted I think some of that may be skewed by location (since the Adirondack Park automatically adds 10 cents to the price, darn downstate environmentalists), but it makes me wonder if it's refining or delivery.

You say refining is up 180% from 2010-2011. However, isn't the final price of fuel up by about the same margin from that time? Or at least the basic crude price? I don't trust media percentages without back calculations, as they typically provide a spin in order to prove an agenda.
 
Re: 5 dollar gas...are we ready?

FlagDUDE08 said:
You say refining is up 180% from 2010-2011. However, isn't the final price of fuel up by about the same margin from that time? Or at least the basic crude price? I don't trust media percentages without back calculations, as they typically provide a spin in order to prove an agenda.
Click to expand...

It's the refining company saying the refining profit margin was up 180% in their quarterly filing to the SEC (10q, 10k). not the media and not the government.

If you want a spin just look at the government EIA numbers (it's corporate-government circle in action). they seem to imply margins were -2% in 2010 and 10% in 2011. that doesn't make any sense if you look at the refiner companies own SEC filings.

http://energyalmanac.ca.gov/gasoline/margins/index.php
And then you look at data from energyalmanac, who supposedly gets their number from EIA and others. according to that data refining margin (cost) could change by 50% or more weekly. while crude cost moves little and gasoline price stays flat. I wouldn't mind seeing where they are getting these raw numbers that move the refining margin(cost) so much weekly.
 
Re: 5 dollar gas...are we ready?

Tundra said:
It's the refining company saying the refining profit margin was up 180% in their quarterly filing to the SEC (10q, 10k). not the media and not the government.

If you want a spin just look at the government EIA numbers (it's corporate-government circle in action). they seem to imply margins were -2% in 2010 and 10% in 2011. that doesn't make any sense if you look at the refiner companies own SEC filings.

http://energyalmanac.ca.gov/gasoline/margins/index.php
And then you look at data from energyalmanac, who supposedly gets their number from EIA and others. according to that data refining margin (cost) could change by 50% or more weekly. while crude cost moves little and gasoline price stays flat. I wouldn't mind seeing where they are getting these raw numbers that move the refining margin(cost) so much weekly.
Click to expand...

OK, so their profit margin is up 180%, but how much of that is precipitated by the base price of crude, and how much is precipitated by the amount of fuel they handle in a day? I'm sure there's some that is actual profit-margin based, but these numbers can be very misleading if you don't read everything.
 
Re: 5 dollar gas...are we ready?

The refining companies were making money hand-over-fist for a large portion of last year because the crack spread (the difference between raw materials cost and finished product value) was in the stratosphere.

Toward the end of the year, the crack spread came down to more normal numbers. I'll be interested to see what's happening with it in the new year.
 
Status
Not open for further replies.
Back
Top