Bush has Charm and Charisma, According to Hillary

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mountainman

Postby mountainman » Sat May 13, 2006 12:36 am

Derek wrote:Increasing supply will help alleviate the prices.


As would decreasing demand. :wink:

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Spence
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Postby Spence » Sat May 13, 2006 7:05 am

The gas prices have mostly to do with lack of refining capacity. It isn't that we can get enough oil to keep up with demand. We haven't had a knew refinery built in the US since the 70's. The environmentalist lobby started this push and the oil companies were just fine to comply because they knew sooner or later they would make money off of it.

They made laws making it next to impossible to build new refineries. Until this is changed and pressure is applied to build knew refineries, at least 8 new ones, gas prices will remain high.

Oil went down under $72.00 yesterday, but gas prices only dropped .02.

As long as we are running so tight between gasoline supply and demand any little disruption or possible disruption will send the market soaring.

some oil companies are looking to expand existing refining capacity, but as of now, there are still no plans to build any new refineries on the horizon.
"History doesn't always repeat itself but it often rhymes." - Mark Twain

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Postby Howdy » Sat May 13, 2006 8:05 am

Spence wrote:The gas prices have mostly to do with lack of refining capacity. It isn't that we can get enough oil to keep up with demand. We haven't had a knew refinery built in the US since the 70's. The environmentalist lobby started this push and the oil companies were just fine to comply because they knew sooner or later they would make money off of it.

They made laws making it next to impossible to build new refineries. Until this is changed and pressure is applied to build knew refineries, at least 8 new ones, gas prices will remain high.

Oil went down under $72.00 yesterday, but gas prices only dropped .02.

As long as we are running so tight between gasoline supply and demand any little disruption or possible disruption will send the market soaring.

some oil companies are looking to expand existing refining capacity, but as of now, there are still no plans to build any new refineries on the horizon.


Why spend money when you can make it with what you have.
They got a tax break last year to do just the thing you suggest, but It must
of gone to the big CEO pockets with there big bonuses.

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Postby Spence » Sat May 13, 2006 8:23 am

Why spend money when you can make it with what you have.
They got a tax break last year to do just the thing you suggest, but It must
of gone to the big CEO pockets with there big bonuses.


That is my point. You can't expect oil companies to do this on their own. Their job is to make as much as possible according to supply and demand. The fact that the government has made laws over the last 38 years to make it possible for them to do it, is my point. Oil companies are expanding exsisting refineries to get more capacity, but the laws on building new refineries make it almost impossible to build a new refinery that will make a profit. The government and the environmental lobby has made it possible for the oil companies to cash in. Oil companies are not benevolent entities, they are for profit businesses and their job is to make as much money as possible for their shareholders. If they could produce more gasoline, at the prices they are getting today, they would do it in a heartbeat. That would make them more money.
"History doesn't always repeat itself but it often rhymes." - Mark Twain

mountainman

Postby mountainman » Sat May 13, 2006 12:11 pm

You might want to take a look at the future traders in New York and Chicago.

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Postby Spence » Sat May 13, 2006 2:21 pm

mountainman wrote:You might want to take a look at the future traders in New York and Chicago.


Yes, that is how it works. But if they bid it the futures and the actual market come in lower, then those guys take a bath. It isn't in their best interest to artificially hold the market up. It is a real balancing act.
"History doesn't always repeat itself but it often rhymes." - Mark Twain

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Postby Spence » Fri May 19, 2006 12:20 am

rolltide wrote:Yeah this is the exact stuff i went to college for. financial management and securities. If the idiot prospectors would quit buying up these futures at record prices, the futures will fall and so follows gas prices. People don't realize how much a little speculation by morons can make the gas prices worse.


The same thing happened to the milk market a couple of years ago, both block and barrel. Speculators kept artificially holding the market high. Now those same markets have adjusted and they are lower then they have been in years. Oil and Gas futures have more "outside" factors involved because of the international politics involved, but they function the same way. If the market is riding an artificial high, there will be a correction. The market system in this country works pretty well.
"History doesn't always repeat itself but it often rhymes." - Mark Twain


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