Don't sell your CTD!

[AKaiser]

... they vote, election after election, for the people who prevent oil production in ANWR...

Given this apparently not so recent find in the Northern Plains of US/CAN, does ANWR even matter, except as a bargaining chip? Congress should trade ANWR for full exploration of the Dakotas and laws that make putting in refineries a bit less challenging.

 

[JesseJ]

Good idea Akaiser, put the point is that they won't let us drill in ANWAR, basically it's the whole principal of the matter. The other interesting fact is that in and around prudhoe bay there is tons of oil. You may have heard recently about Russia, Canad, and the U. S. trying to claim areas of the north pole as their own. Why? Because of oil. If it's out in the water, somebody else is going to come drill it and sell it.

 

[AKaiser]

Not being anything near a student of economics, I found this article very illuminating.

It's dead on. It's the same thing that happened in the late 20s when Hoover pushed the manufacturing industry to maintain high wages, and keep commodities (grain esp) prices high, based on the theory that maintaining the purchasing power of the people would keep the economy going, regardless of circumstances. FDR's policies were just Hoover on steroids. The problem was lack of demand for what was produced.



Four Myths About Americas Great Depression| The Foundation for Economic Education: The Freeman, Ideas on Liberty

 

[RGardner]

One hole in the supply and demand theory is that refineries are running at just about 80% of capacity. So maybe the oil companies are artificially creating demand?

 

[HBarlow]

One hole in the supply and demand theory is that refineries are running at just about 80% of capacity. So maybe the oil companies are artificially creating demand?

I don't believe your figures are accurate but even if we assume they are for the purpose of discussion... ... . can you explain how production slowdown in American oil refineries could increase the price of crude oil purchased from, for example, Saudi Arabia to $100+/barrel?

 

[JesseJ]

The oil companies are operating refineries at low capacity because the profit margin for turning a barrel of crude into a barrel of refined product is so low. And why is that? Because they have such a huge stockpile of gasoline and because demand is down so much. I read an article in the local paper that said gasoline demand is down 3. 2% from the same time last year.

 

[HBarlow]

JesseJ,



That makes sense. Thanks for the explanation.



And RGardner, forgive me for doubting your report on refinery production. But my question still remains... ... . can you explain how reduced production rates from American oil refineries increased the price of OPEC crude oil?

 

[BradyWilliams]

Just want to give you guys a piece of info that came my way. In a meeting I just recently attended, Bosch top managment talked to us about new technology they are bringing out in 2010. It was explained to us that Bosch now has intake and exhaust managment systems that will along with a new Common Rail Injector that will not need a CP3 pump, change exhaust gases and clean exhaust gases to the point where the air quality will be better than outside air (ambient) in some large cities. So by driving your truck around you would be in effect cleaning the air and making it more breathable. The exhaust system has 4 components and Bosch now will produce it's own turbo/intake system. The injectors will have 2 solenoids to control the injection events. The injector will develope up to 35,000psi within itself, with the second solenoid. Maybe the enviro wackos will need to find another job!

 

[rbattelle]

One hole in the supply and demand theory is that refineries are running at just about 80% of capacity. So maybe the oil companies are artificially creating demand?

Where did you get this figure? Last I read every active refinery was running 100% to meet demand, and that still wasn't enough.



Ryan

 

[RGardner]

right here:

Summary of Weekly Petroleum Data for the Week Ending April 4, 2008



U. S. crude oil refinery inputs averaged 14. 3 million barrels per day during the

week ending April 4, up 142,000 barrels per day from the previous week's

average. Refineries operated at 83. 0 percent of their operable capacity last

week. Gasoline production moved higher compared to the previous week,

averaging nearly 8. 9 million barrels per day. Distillate fuel production rose

last week, averaging nearly 4. 0 million barrels per day.



I never said that the refinery capacity had anything to do with the price of oil. The price of oil I believe is being driven up artificially by the speculators on the electronic futures markets, whether it is because of the lower dollar or what ever, I believe that it is one of the biggest reasons that oil prices are so out of line.

 

[rbattelle]

U. S. crude oil refinery inputs averaged 14. 3 million barrels per day during the

week ending April 4, up 142,000 barrels per day from the previous week's

average. Refineries operated at 83. 0 percent of their operable capacity last

week. Gasoline production moved higher compared to the previous week,

averaging nearly 8. 9 million barrels per day. Distillate fuel production rose

last week, averaging nearly 4. 0 million barrels per day.

Excellent. We assume the other 17% isn't due to damage or maintenance, right?



Ryan

 

[HBarlow]

One hole in the supply and demand theory is that refineries are running at just about 80% of capacity. So maybe the oil companies are artificially creating demand?

The demand that is the primary factor in the cost of fuel at the pump is the world-wide price of crude oil.



Refinery output can also influence price at the pump but the cost of crude oil sets the floor price at a very high level.



If the oil industry decided to price their products at cost giving up their profit and return to investors completely gasoline and diesel fuel would still be very expensive.

 

[AKaiser]

The demand that is the primary factor in the cost of fuel at the pump is the world-wide price of crude oil.



Refinery output can also influence price at the pump but the cost of crude oil sets the floor price at a very high level.



If the oil industry decided to price their products at cost giving up their profit and return to investors completely gasoline and diesel fuel would still be very expensive.

We might as well deal with the reality that China is using 30 pct more oil than it did 10-20 years ago.



Why China is the REAL master of the universe | the Daily Mail

 

[LPittsley]

Doesn't China own 50% of our debt anyway? In T bills. Our goverment is part of the problem. Lower dollar value.

 

[HBarlow]

AKaiser,



Thanks for spoiling my day with the link to The Daily Mail.



Important but depressing reading. I believe it is inevitable that China followed by India will eventually become dominant in the world while we dither about raising capital gains and ordinary income taxes, increasing regulatory burdens on ourselves, preventing the building of nuclear power plants or drilling for oil in ANWR or offshore fields, using politically correct language, and creating more "equitable" unfair advantages for minorities.



I will be resting comfortably at Arlington National Cemetery or maybe a Texas veterans's cemetery when it happens but I am sure it is coming.

 

[rbattelle]

Why China is the REAL master of the universe | the Daily Mail

Good article. If it comes to pass that China exceeds our power it will be an interesting time to be alive. "Interesting", but probably not in a good way.



Ryan

 

[HBarlow]

Yes, I agree. I don't expect to be here for the confrontation but I fully expect one.



It will be a very long time before China or India develop a Navy or Air Force that can challenge ours and win but they are clearly working on it. Our Army and Marines have far superior training, tactics, weapons, and equipment right now but the sheer overwhelming numbers of soldiers either country could put in uniform could neutralize some of our superiority. China will become a very dangerous enemy at some point I fear.



It is possible, however, that the rapid industrialization of China that is providing unexpected new lifestyles for their people will also change attitudes and cause the people to stand up to and overthrow their Communist dictator government thereby neutralizing the threat. Democracies don't usually attack other democracies.

 

[AKaiser]

AKaiser,



Thanks for spoiling my day with the link to The Daily Mail.

Any time. .