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2005-06-03 Home Front: Economy

Oil $54 a barrel- wanna hear their latest excuse?

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Posted by bigjim-ky 2005-06-03 10:39|| || Front Page|| [3 views since 2007-05-07] Top

#1 Was in Las Vegas for the holiday and decided to come back to the Bay Area via the back way on Monday. Big mistake. Gas at Shoshone, Panamint Springs Resort, and Furnace Creek in Death Valley was over $3/gal. Just a teensy bit below $3 in Lee Vining.

Posted by Bomb-a-rama 2005-06-03 12:23|| 2005-06-03 12:23|| Front Page Top

#2 Actually its not oil production, but refinery capacity that IS the problem. The US hasnt added a new refinery in 20 years, and current ones are running flat-out. Add to that increased demand, both domestic and overseas (Chinese), and you have a recipe for effectively high petroleum product prices no matter what.

Crude oil doesnt do anyone any good at all. Its what comes out of the refineries that counts. Refineries maake a mix of product at any given time - go read up on it. Fractional distillation and "cracking" are the primary processes - thats why they have all those pipes, columns and tanks. At any given time a refinery is making a lot of different things, from heavy assphalt-like tars to light volatile products gasoline and benzene. Its messy, complex and changes according to what need to be produced.

And yes, right now is when they start gradually changing product distribution, making less of lighter gasoline in order to make more heavier heating fuels. This is in order to build up stockpiles for the initial delivery rush when cold weather arrives: buying of heating oils is not a smooth curve like gasoline. Its usually only bought in early fall, and during the winter. So stockpiles are needed.

Not defending the greed, just explaining the market for petroleum to you so you can see its not a conspirsacy by Exxon/Shell/Arabs. Its a capitalist economy at work under the burden of state intervention (enviro regs/lawsuits preventing new plants, addtitives and other dictates on production, foreign governments artificially manipulating supply, etc).

Posted by OldSpook 2005-06-03 12:36|| 2005-06-03 12:36|| Front Page Top

#3 Well, OS, we are talking about the raw price per barrel. dis em something ima talk about more when i get back from wisconsin (packing to go now)

Posted by Phil Fraering 2005-06-03 12:42|| http://newsfromthefridge.typepad.com]">[http://newsfromthefridge.typepad.com] 2005-06-03 12:42|| Front Page Top

#4 And please pay attention to the ever increasing volume of Chinese purchase of crude on the world market, care of all your purchases at Chimart rising the economy and living standard of the average mainland citizen.

Posted by Thinert Phineck9788 2005-06-03 13:52|| 2005-06-03 13:52|| Front Page Top

#5 Yeah, even at $63/barrel cude oil is only $1.50 /gallon. The rest is refining, transportation, and of course TAXES.

On the plus side, I don't need hard to refine RFG; so I just paid $1.94/gal for 87 octane unleaded yesterday.

Posted by Dave 2005-06-03 14:06|| 2005-06-03 14:06|| Front Page Top

#6 All you need to is demand for oil is rising faster than supply and the price will continue rising until demand slows (through slower economic growth). There isn't any other way out of this situation. BTW, this looks like a record high for oil priced in Euros.

Posted by phil_b 2005-06-03 18:01|| 2005-06-03 18:01|| Front Page Top

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