From: G Shaw (milspectruck@verizon.net)
Date: Sat Nov 19 2005 - 08:15:57 PST
An additional point to add to Ryans excellent post is that you are all
Eventually as China and India take over the worlds economies, as the EU and
Later
-----Original Message-----
At 8:16 PM -0700 11/18/05, Kirk Thompson wrote:
forgetting that oil products as well as the crude itself have been
*commoditized* in that they are no longer sold or controlled by the
producers themselves any more than gold is controlled by the gold mining
industry or orange juice is controlled by the farmers. All of these
commodities are controlled by the traders at the NYMEX. The prices are
subject not only to real supply and demand concerns but also heavy
manipulation by the traders on the MERC acting for hedge funds, pensions
funds, instituional buyers etc. The traders can push the price up or down
wildly and it has nothing to do with underlying actual supply and demand.
The profits for the oil industry are roughly the same 7% that they always
were. The final gross profit number is just higher due to the price of the
raw product going from 28-70 bucks. The issue is very complex with a lot of
big money forces at work to make a killing not just the oil companies who
are their own worst enemy by doing things like shutting down a refinery for
maintenance when there is a supply crunch. They deserve the blame for part
of the problem but the largest force setting price now that OPEC has
essentially become irrelevant is the traders and hedgies at the NYMEX.
US go under they will control all the worlds oil for the most part because
they will pay any price for it, and can afford it due to artificially low
costs of production. They will produce the vast majority of all
manufactured goods and will charge what they want for them as they drive
competition into bankruptcy. We will no longer be able to afford oil or
cover our ballooning deficits as our stupid consumers increasingly are
happy to buy everything they can get their hands on made in Asia. Yes they
are saving a buck today to screw some poor American or European working man
and his family but it will all catch up with us. The world is not going to
be a better place in the future for our kids.
G
From: Military Vehicles Mailing List [mailto:mil-veh@mil-veh.org] On Behalf
Of Ryan Gill
Sent: Saturday, November 19, 2005 2:14 AM
To: Military Vehicles Mailing List
Subject: Re: [MV] gas and fuel costs
>Technically:
>The way I understand it is simply supply and demand.
>
>Fuel oil, Diesel, and kerosine (listed in order
>from lower grade to higher) are actually
>by-products of the different stages of the
>molecule cracking process that makes gasoline.
>These fuel oils are actually not intentionally
>made. Gasoline is what is desired to be made in
>the refining process and since diesel is really
>just a by-product, when there is a strong demand
>(more vehicles using diesel) and there is not a
>large supply (because if there is plenty of
>gasoline, you don't need to make more and
>therefore no more diesel is made), it drives the
>cost up.
Kerosene and Fuel Oil are thicker, Gasoline is
more aromatic. Diesel is a mix of several
(benzine included) aromatics that are nearly the
same as Kerosene. The refining process will make
a given amount of each, however, the process can
be tweaked by additions of other chemicals to
crack different molecules and make more or less
of a given amount of fuel.
>Personally:
As I understand it their bulk of profits are from
>I think we are getting screwed by Big Oil.
>Record profits for the last 10+ years and 2005
>being the best in history.
the massively increased demand for crude oil in
India and China. The refined fuels are made
mostly in the US with some being made in Mexico
and Canada. Europe has been selling us some
gasoline because they've been increasing the
number of diesel powered cars spurning a growth
in the need for diesel and a lessening of
gasoline. The US market has increased use of all
fuels. Refined fuels are a very small part of
their market.
Competition will drive the prices back down. The
fact that we have a new refinery being built for
the first time in 20 years should help to. It'll
be a state of the art facility which should give
it an edge. The DOE web page has a lot of
information on the market trends and why the
prices actually get driven up.
see http://www.doe.gov/engine/content.do?BT_CODE=PRICESTRENDS
One key thing to remember is that fuels and the
raw crude are bid on based on the prices and
expected price increases. If prices are expected
to go up, companies will bid on lots of fuel to
guarantee supply, this will drive the price up a
bit but will also at the same time limit the use
because it becomes more expensive. If the supply
is refreshed quickly, then being locked into the
price for the higher fuels more or less hurts the
company who has to sell at that price. The same
goes for bigger and smaller fuel stations
depending on the cycle time of their stock. More
cycle time and they'll be stuck with the higher
price because that's what they bought it at.
They'll try to sell it at the lower price.
There's a Citgo around the corner from me that I
bought fuel from before I knew better. They're
charging 3.59 a gallon for diesel. The Quicktrip
that's 3 exits up I285 is selling it at 2.35. The
Quicktrip gets their diesel in in large lots
because they have 16 Truck sized pumps (master
slave units) and they are an in town truck stop.
-- -- Ryan Gill rmgill@SPAMmindspring.com
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