5 dollar gas...are we ready?

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Usurers, too.

Put a gibbet up right next to the bull and use it once a quarter, just the give the Wall Street weasels some perspective.

If you can't beat 'em, join 'em. SPY's (the S&P 500 ETF) only about $130 for a share. Save up those pennies and get in. Although I'd wait a little bit for the price to go down; they just went ex-dividend.

 

[Kepler]

Re: 5 dollar gas...are we ready?

If you can't beat 'em, join 'em. SPY's (the S&P 500 ETF) only about $130 for a share. Save up those pennies and get in. Although I'd wait a little bit for the price to go down; they just went ex-dividend.

I am quite well-joined. All I ask is that the fund manager of the worst performing mutual fund from each quarter be beheaded live on CNBC, with all his assets given to charity. That's really not so much to ask. Our economy works on incentive.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

I am quite well-joined. All I ask is that the fund manager of the worst performing mutual fund from each quarter be beheaded live on CNBC, with all his assets given to charity. That's really not so much to ask. Our economy works on incentive.

Your link doesn't show a mutual fund, or at least it's not apparent.

 

[Bakunin]

Re: 5 dollar gas...are we ready?

Executing speculators should be a matter of civic pride.

Actually we should execute the idiots that allow market speculators to dictate such a significant portion of the price of a commodity we all use.

It'd be like if Apple's stock price doubled, and you had to pay 50% more for an ipad.

Stupid, stupid, stupid.

 

[MinnFan]

Re: 5 dollar gas...are we ready?

Actually we should execute the idiots that allow market speculators to dictate such a significant portion of the price of a commodity we all use.

It'd be like if Apple's stock price doubled, and you had to pay 50% more for an ipad.

Stupid, stupid, stupid.

Generally speaking, speculators are very good for markets. They allow liquidity, which keeps the price of goods down. They also provide signals for the future of the market. A good example of this is cottom prices. 6 months ago the price of cotton skyrocketed. It was higher than during the Cival War. Its now back to historical norms because farmers went out and planted more cotton because they were getting a higher price for it.

It people had to hold their oil and then sell on the open market they would likely charge more due to the risk involved along with the holding costs. This isn't to say that there can't be bubbles due to speculators due to the "greater fool" theory, but those bubbles will eventually burst bringing prices back in line with where they should be.

One thing to keep in mind. Its speculators who are currently causing the price of oil to drop.

 

[joecct]

Re: 5 dollar gas...are we ready?

I am quite well-joined. All I ask is that the fund manager of the worst performing mutual fund from each quarter be beheaded live on CNBC, with all his assets given to charity. That's really not so much to ask. Our economy works on incentive.

That's a bit unfair, you know. You need to rotate it among Bloomberg and Fox Business. Al-Jazeera gets the international rights.

 

[aparch]

Re: 5 dollar gas...are we ready?

Speaking of speculators, US tries to run them out by releasing oil from the strategic reserve.

http://www.msnbc.msn.com/id/43510170/ns/business-going_green/

Thursday’s release of 60 million barrels of crude reserves is not about keeping oil consumers well-supplied. It’s about chasing oil speculators out of the market.

And it seems to be working.

“This is the straw that breaks the camel’s back — this is the tipping point,” said Fadel Gheit, oil analyst for Oppenheimer, a leading investment bank. “The speculators will have to change their positions. Instead of betting on higher prices they have to bet on lower prices."

Bursting the speculative oil bubble would also provide stimulus to a weak U.S. economy – at a time when both the Fed’s monetary stimulus and the government’s spending stimulus are winding down.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Speaking of speculators, US tries to run them out by releasing oil from the strategic reserve.

http://www.msnbc.msn.com/id/43510170/ns/business-going_green/

Terrific idea; put the country at risk. -_-

 

[joecct]

Re: 5 dollar gas...are we ready?

Terrific idea; put the country at risk. -_-

Drill here and now! If somebody cut off Mideastern Oil in its entirety, we'd be forced to anyway

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Drill here and now! If somebody cut off Mideastern Oil in its entirety, we'd be forced to anyway

Maybe that's the whole point. We sit on and hoard our own oil so that after we're done blowing up the Middle East, we have the oil, and they don't.

 

[Tundra]

Re: 5 dollar gas...are we ready?

So how many people STILL believe the oil company line: mainly that the refining capacity constraint (supply) is causing higher gasoline prices.
there is no free market in oil/gasoline prices, it's totally controlled by oil/refiner oligopoly.

http://finance.yahoo.com/news/first-gas-other-fuels-top-200739135.html

Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.

And up until a few years ago, whenever gasoline prices climbed, there were complaints in Congress that U.S. refiners were not growing quickly enough to satisfy domestic demand; that controversy would appear to be over.

gasoline demand in the U.S. has been falling every year since 2007. It dropped by another 2.5 percent in 2011

 

[Patman]

Re: 5 dollar gas...are we ready?

So how many people STILL believe the oil company line: mainly that the refining capacity constraint (supply) is causing higher gasoline prices.
there is no free market in oil/gasoline prices, it's totally controlled by oil/refiner oligopoly.

http://finance.yahoo.com/news/first-gas-other-fuels-top-200739135.html

People charge you what the think they are able? How shocking?

I suppose that means you are in favor of fewer regulations for new market participants in oil or do you have a magic law that'll make them "place nice"... price controls?

 

[GopherBigGuy911]

Re: 5 dollar gas...are we ready?

So how many people STILL believe the oil company line: mainly that the refining capacity constraint (supply) is causing higher gasoline prices.
there is no free market in oil/gasoline prices, it's totally controlled by oil/refiner oligopoly.

http://finance.yahoo.com/news/first-gas-other-fuels-top-200739135.html

Ok, if you were a producer of a product and could sell it for $3.20 a gallon in one place and $9.00 a gallon in another place, where would you sell your product????? You should be HAPPY that this country is ACTUALLY exporting something.... other than jobs for once. With more refineries (North Dakota Indian Tribes and South Dakota) coming online in the next few years we will be exporting even more (while at the same time increasing out domestic oil production immensely - North Dakota, South Dakota, Ohio, Pennsylvania, Utah, Texas, Montana, the Gulf, and even New York). The oil industry is one of the few things that is actually PRODUCING JOBS. Even if you believe that we do need to find different energy sources (Natural Gas, Nuclear, Hydrogen, non food based ethanol) right now the only bright sport in this economy is the oil and gas industry. Even if we did the g spot of non oil based fuels and convert over night the rest of the world will still run on oil.

 

[Slap Shot]

Re: 5 dollar gas...are we ready?

Ok, if you were a producer of a product and could sell it for $3.20 a gallon in one place and $9.00 a gallon in another place, where would you sell your product????? You should be HAPPY that this country is ACTUALLY exporting something....

His point was that the increased production will not provide a drop in price locally. And he's right. I'm not saying they shouldn't export more if they can, but we're not going to see a difference at the pump.

 

[Tundra]

Re: 5 dollar gas...are we ready?

His point was that the increased production will not provide a drop in price locally. And he's right. I'm not saying they shouldn't export more if they can, but we're not going to see a difference at the pump.

Happy New Year: Everyone
My motto this year is Serenity

There is a monopoly (oligopoly). And the price of gasoline has very little to do with the excuse of oil-refiner companies. (gasoline prices are up because we import gasoline2010, gasoline is up because we export gasoline2011, gasoline is up because oil went up2008, gasoline is up because oil went down/crack spread2009).

http://en.wikipedia.org/wiki/Monopoly

When not coerced legally to do otherwise, monopolies typically maximize their profit by producing fewer goods and selling them at higher prices than would be the case for perfect competition

Exxon. sold less downstream (gasoline etc...) and made more profits (about 100-200% margin increase) than last year. So these companies were making record profit margin last year and profit margin is up another 50-200% this year. they are making refining (downstream) profits on the backs up America.

http://biz.yahoo.com/e/111103/xom10-q.html

Third quarter 2011 Downstream earnings of $1,579 million were up $419 million from the third quarter of 2010. Refining margins increased earnings by $1 billion. Volume and mix effects increased earnings by $110 million, while all other items, mainly unfavorable foreign exchange impacts and lower gains on asset sales, decreased earnings by $710 million. Petroleum product sales of 6,558 kbd were 37 kbd lower than last year's third quarter.

Earnings from the U.S. Downstream were $810 million, up $646 million from the third quarter of 2010. Non-U.S. Downstream earnings of $769 million were $227 million lower than last year.

Third Quarter First Nine Months
2011 2010 2011 2010
(millions of dollars)
Downstream earnings
United States $ 810 $ 164 $ 2,238 $ 544
Non-U.S. 769 996 1,796 1,873

Total $ 1,579 $ 1,160 $ 4,034 $ 2,417

 

[Tundra]

Re: 5 dollar gas...are we ready?

ConocoPhillips proves my point. in both cases of oil being up and down the refining margin is up. Good for oil/refiner, sucks for consumer.

And I think Patman is right that we need to treat these companies like Utility (with monopoly like power) and have commission setting the prices (price control).

http://biz.yahoo.com/e/111101/cop10-q.html

Crude oil and natural gas prices, along with refining margins, are the most significant factors in our profitability. Industry crude prices for West Texas Intermediate (WTI) averaged $89.70 per barrel in the third quarter of 2011, an increase of 18 percent compared with the third quarter of 2010, and a decrease of 12 percent compared with the second quarter of 2011.


Domestic refining margins continued to significantly increase in the third quarter of 2011, and international refining margins also improved. The U.S. 3:2:1 crack spread, which is primarily WTI-based, increased 186 percent in the third quarter of 2011, compared with the third quarter of 2010, and 20 percent compared with the second quarter of 2011.

 

[Craig P.]

Re: 5 dollar gas...are we ready?

His point was that the increased production will not provide a drop in price locally. And he's right. I'm not saying they shouldn't export more if they can, but we're not going to see a difference at the pump.

More supply will affect price, but only to the extent that it's not offset by demand. It's a huge leap to go from "domestic demand fell" to "the refiners are price-fixing," considering that there's more to the market than just the U.S. and there's significant competition in the industry. Shell, BP, Marathon-Ashland, Conoco-Phillips, Chevron-Texaco, Exxon-Mobil, Valero, and there are multiple smaller refiners out there too.

FWIW, crack spread futures fell significantly in Q4.

 

[GopherBigGuy911]

Re: 5 dollar gas...are we ready?

More supply will affect price, but only to the extent that it's not offset by demand. It's a huge leap to go from "domestic demand fell" to "the refiners are price-fixing," considering that there's more to the market than just the U.S. and there's significant competition in the industry. Shell, BP, Marathon-Ashland, Conoco-Phillips, Chevron-Texaco, Exxon-Mobil, Valero, and there are multiple smaller refiners out there too.

FWIW, crack spread futures fell significantly in Q4.

Good point Craig - Part of the reason we can export gasoline is because the econemy is so ungodly awfully horrible.

 

[Almington]

Re: 5 dollar gas...are we ready?

More supply will affect price, but only to the extent that it's not offset by demand. It's a huge leap to go from "domestic demand fell" to "the refiners are price-fixing," considering that there's more to the market than just the U.S. and there's significant competition in the industry. Shell, BP, Marathon-Ashland, Conoco-Phillips, Chevron-Texaco, Exxon-Mobil, Valero, and there are multiple smaller refiners out there too.

FWIW, crack spread futures fell significantly in Q4.

What matters is what global demand has done given that price is dictated by what demand does in places like China and India as much as what happens in the US.

All fixing the price will do is lead to inevitable shortages and a result in a black market, it isn't going to do anything to improve the situation for the majority of consumers. The best way to address the profits of the companies is to place a punitive tax on profits above a certain percentage but even that isn't going to solve the issue of high gas prices but it would give companies some incentive to lower prices when expenses decrease.

 

[St. Clown]

Re: 5 dollar gas...are we ready?

What matters is what global demand has done given that price is dictated by what demand does in places like China and India as much as what happens in the US.

All fixing the price will do is lead to inevitable shortages and a result in a black market, it isn't going to do anything to improve the situation for the majority of consumers. The best way to address the profits of the companies is to place a punitive tax on profits above a certain percentage but even that isn't going to solve the issue of high gas prices but it would give companies some incentive to lower prices when expenses decrease.

A punitive tax structure won't change gas prices in the least because, as was said, it is a global market. What you might see, if anything, is the corporations increase their cost structures, throwing some lavish parties or hand out big bonuses to certain groups of people. It will also drive down the oil companies' stock prices and thus lowering the value of everyone's mutual funds.