From: Bruce C. Beattie (bruce@EECS.Berkeley.EDU)
Date: Sat Nov 19 2005 - 09:27:06 PST
This pretty much says it all. I wish there was a way to wake people up
to this, but
I haven't figured that out yet.
Bruce MVPA 23824
G Shaw wrote:
>An additional point to add to Ryans excellent post is that you are all
>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.
>
>Eventually as China and India take over the worlds economies, as the EU and
>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.
>
>Later
>G
>
>-----Original Message-----
>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
>
>
>At 8:16 PM -0700 11/18/05, Kirk Thompson wrote:
>
>
>>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:
>>I think we are getting screwed by Big Oil.
>>Record profits for the last 10+ years and 2005
>>being the best in history.
>>
>>
>
>As I understand it their bulk of profits are from
>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.
>
>
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