supply and demand oil people???

[Gary - K7GLD]

I can not see diesel ever going below $2. 50 again, let alone $1. 00 a gallon

Short of physically dragging the commodities traders out one at a time and treating them ALL like the soleless immoral parasites they have become, I doubt you'll ever see any fear or "remorse" generated in their percentage and ticker based empty minds. Bottom line figures are all that matter in all of this world, not just oil. Unless you feel justified to grab overpaid clowns like Bob Nardelly of Home Depot and his cloned group of CEO's, you'll never get to the root of the problem.

I don't think it matters which political group you look at, they are all driven by one thing, power. Democrats and Republicans are only different in the trivial points they rant about during election years.

Given the chance to start over, I doubt any "elected" official could remain unconnected to corporate lobbyists and greed. It is a natural of the beast, nothing more, nothing less. You will not see a single honest man/woman with any desire to change things make it to Washington anymore. Respectable and family oriented people do not subject themselves to the mudslinging and bloodthirsty nightmare of campaigning. Lets be honest about that.

Finding more main stream accepted fuel alternatives will require prices higher than europe to make the typical consumer in the USA change their ranting and *****ing into positive aggresive demand for change. Giving up the lifestyle we're used should not be neccessary, but finding acceptable compromises will be. Crushing any vehicle that can not meet the emmisions would be a good start, it would target the lazy comsumer who just drives something until the wheels fall off. This is more of a gross polluter/gas hog issue than any light duty truck on the road if maintained. My neighbor's "hot rod" gets 6 mpg (on the interstate, not in town!!!), it is a piece of filthy rust and out dated crap. I am all for street rods, but "billy bob of inbred acres and his appalachian mountain girl wife" should not have the excuse that all they can afford to drive is his rusted out first car from high school when the accessories he buys for it are more than a new car payment each month This would do more for reducing our oil comsumption than any program on current model vehicles.

As for alternate fuels:

There is so much clouded info on Bio Diesel and the fear of damage to engines long term that it will be a long to catch on. Forcing independent labs to report on it would be a task worth taking on. Consumer reports? or other group may have the the resources. Once its proven safe, subsidize our bankrupt farmers and get the fuel on the market. I'd like to see it mandated in this decade, but am not holding my breathe.

SVO systems still are more a hippie trend thing to me. I haven't seen anyone build a respectable setup that doesn't resemble a weekend mechanic's science project built from a bucket of home depot plumbing aisle products.

I am grateful for one thing with the forums of today like TDR, at least the internet has opened the door to let people see the reality of things like this recently. Can you imagine relying on Dan Rather and his court jesters for any legitimate answers to this issue? (we'd be restrcicted to a small group of buddies like "king of the Hill" for this kind of discussion in our garages. I'd probably have better enlightenment from my dog on the subject).

AMEN!



I agree 100% on ALL the above!

 

[RustyJC]

SO, answer my question - IF crude prices were to suddenly drop to about $20 a barrel, do YOU suppose we would see a coresponding drop in pump pricing to the earlier sub-$1 a gallon prices - or do we rationalise some excuse for why THAT wouldn't do the job, either?

Let's do the math. At $20/bbl and 42 gallons to the barrel, the cost of the crude oil is $0. 476/gallon - before it is transported to the refinery, refined into gasoline and blended with additives, transported to the distribution rack and transported to the service station. The fuel tax is $0. 184/gallon (Federal) and $0. 20/gallon (Texas) for a total fuel tax of $0. 384/gallon. If I take the cost of the crude oil ($0. 476/gallon) and add the taxes ($0. 384/gallon), I'm at $0. 86/gallon before transportation and refining costs and profits for every company that's touched the crude oil or refined product have been added. So I doubt that $20 crude oil will equate to a $1. 00/gallon pump price.



Rusty

 

[radar doctor]

Gentlemen::::: My 2 CENTS WORTH:::::::: The other day i was out running around looking for a Grave site in a Cemetery,, 25 yrs ago the sites were 40. 00. . Today they are $150 Dollars... . I noticed Diesel was $3. 29 and Gas was $2. 29... . I noticed that people yelling the loudest when Gas went to $2. 00 a gal and up... . It was in the News Big Time, We called our congressman, our local officials... . Now the Gas has come down. . the pressure is off, They just Raised the Diesel Price to Offset the Gas and Calm the People Down... of coarse the price of the Diesel will get Passed on down to the People who have Gone Silent. . Can you see my point?????. IT DOESN'T MATTER..... I'M GLAD I LIVE IN AMERICA... ... DOC

 

[Gary - K7GLD]

Let's do the math. At $20/bbl and 42 gallons to the barrel, the cost of the crude oil is $0. 476/gallon - before it is transported to the refinery, refined into gasoline and blended with additives, transported to the distribution rack and transported to the service station. The fuel tax is $0. 184/gallon (Federal) and $0. 20/gallon (Texas) for a total fuel tax of $0. 384/gallon. If I take the cost of the crude oil ($0. 476/gallon) and add the taxes ($0. 384/gallon), I'm at $0. 86/gallon before transportation and refining costs and profits for every company that's touched the crude oil or refined product have been added. So I doubt that $20 crude oil will equate to a $1. 00/gallon pump price.



Rusty

... How strange it was, that oil companies WERE able to sell at the sub-$1 range when crude was at $20 a barrel...



I guess they musta been selling at huge LOSSES back then huh?



Let's face it, SOMEONES profits have been injected into the pump price, WELL over and above what WAS happening when $20 a barrel crude was the standard price - and THAT is the basic issue in these fuel discussions!

 

[Gary - K7GLD]

Here's some more "math" for ya:



http://www.iru.org/Services/fuel/Welcome.E.html



That displays international consumer fuel costs - and clicking on individual countries brings up a graph for that country showing a graph of fuel increases over the past 8 years or so.



It's interesting to note that the US consumer price has DOUBLED within that period, while most European and other countries cost has only risen by about 30% - WHY do you suppose that is? Is their cost of refining and transportation that much superior to ours? If so, maybe OUR oil companies should be trying to copy theirs in order to bring OUR cost increases in line with theirs...

 

[RustyJC]

It's interesting to note that the US consumer price has DOUBLED within that period, while most European and other countries cost has only risen by about 30% - WHY do you suppose that is? Is their cost of refining and transportation that much superior to ours? If so, maybe OUR oil companies should be trying to copy theirs in order to bring OUR cost increases in line with theirs...

Gary,



What's the value of the dollar today vis-a-vis 10 years ago? Crude oil is dollar-denominated, so the European countries pay proportionately less as the dollar drops - one Euro buys more crude as the dollar declines relative to the Euro (or British Pound, etc. ). Try correlating the change to the decline of the dollar.



Rusty

 

[RustyJC]

... How strange it was, that oil companies WERE able to sell at the sub-$1 range when crude was at $20 a barrel...



I guess they musta been selling at huge LOSSES back then huh?



Let's face it, SOMEONES profits have been injected into the pump price, WELL over and above what WAS happening when $20 a barrel crude was the standard price - and THAT is the basic issue in these fuel discussions!

If you found an error with my math, please point it out.



Rusty

 

[Gary - K7GLD]

If you found an error with my math, please point it out.



Rusty

It's not particularly your math - it's the reasoning vs my comment:



"... How strange it was, that oil companies WERE able to sell at the sub-$1 range when crude was at $20 a barrel...



I guess they musta been selling at huge LOSSES back then huh?'



So, regardless of YOUR math, what has changed that has made what WAS once possible (and COMMON!), now IMpossible?



By your "math", diesel fuel should NEVER have been below about 38 cents a gallon, even if crude oil, transportation and and refining was FREE!



And we certainly know THAT isn't true - do the math!

 

[Gary - K7GLD]

Some interesting related reading:



http://www.investment-u.com/ppc/splash_oil.cfm?kw=XVVIU814#5_strategies





This paragraph summs up a large portion of the above...



Our brief view over the modern history of oil would lead us to believe that oil prices are driven by politics in the short run and by economics (supply and demand) in the long run.



... but leaves unanswered exactly which "politics" he refers to, how long, and to what degree...

 

[brods]

There is so much clouded info on Bio Diesel and the fear of damage to engines long term that it will be a long to catch on. Forcing independent labs to report on it would be a task worth taking on. Consumer reports? or other group may have the the resources. Once its proven safe, subsidize our bankrupt farmers and get the fuel on the market. I'd like to see it mandated in this decade, but am not holding my breathe.

Lets do some real scientific study before mandating it. IIRC there was an article about methanol, where once they factored in everything it took to get it into the gas tanks, it actually consumed more oil than it replaced. You have to factor in all the oil consumed in the seed production, planting, fertilizing, maintaining, harvesting, transporting and processing of the crop. All the oil used to manufacture the fertilizer and chemicals used on the crop has to be factored in too. And probably a lot of other stuff needs to be considered as well. If, after careful study, biodiesel truly replaces more oil than it takes to produce and if it is a sustainable practice, ie it doesn’t create waste problems or destroy precious farm land etc. , THEN go ahead and mandate it. I pretty much agree with everything else you said.

It's not particularly your math - it's the reasoning vs my comment:



"... How strange it was, that oil companies WERE able to sell at the sub-$1 range when crude was at $20 a barrel...



I guess they musta been selling at huge LOSSES back then huh?'



So, regardless of YOUR math, what has changed that has made what WAS once possible (and COMMON!), now IMpossible?



By your "math", diesel fuel should NEVER have been below about 38 cents a gallon, even if crude oil, transportation and and refining was FREE!



And we certainly know THAT isn't true - do the math!

How far back do we have to go to get to that sub $1 range? Now are you correcting for the differences in taxes, cost of materials, inflation and maybe increased environmental regulations, etc. ? Likewise, comparing us to countries overseas you must factor in every component of the price. For example, iirc one of the countries had a trucker strike which forced the price down via reduced taxes, not by reduced oil company profits. Regardless, who would want their “stable” prices at the cost of triple or even double what we have traditionally paid?

Our brief view over the modern history of oil would lead us to believe that oil prices are driven by politics in the short run and by economics (supply and demand) in the long run.



... but leaves unanswered exactly which "politics" he refers to, how long, and to what degree...

Exactly which "politics" is of the utmost importance. If it is the traders, the investors and the market driving the price then ranting about the oil companies is pointless.



No one likes the high price of fuel. Ranting about it will not change a thing. Sarj said it best:

... ... . It always comes down to... what are you willing to do about it.

 

[HBarlow]

Rusty,



I hate it when you use facts, math, sound basic economic principles, and clear, logical reasoning, to dispute opinions, preconceived notions, bias, rumors, misunderstanding, and stubborn resistance to accept the obvious just to win an argument. It's not fair. I'm gonna sign off, go sit in the corner, and curse the big oil companies for making money while supplying products the US cannot live without.



I bet you have even invested your retirement funds in oil company stock that is rising in value every year. That makes me more angry.



Harvey

 

[JasonBrown]

Personally I feel the oil companies used the hurricanes as an excuse to do a litmus test on the public. They wanted to know the real "market" price of gas and diesel. At $2. 00 people started complaining but kept on driving. at $3. 00 demand dropped. We are now at mid 2 dollar prices and I bet that is what we have from now on. They have managed to find the maximum price that will keep demand at the pre hurricane levels, therefore maximizing profits for them. As for diesel, the major consumers as in semi trucks are still buying at the same levels so if we are still buying at $3. 25 then I am sure that is where they will leave it. Diesel pick up drivers are still a very small percentage of diesel consumers.

 

[DKarvwnaris]

As for diesel, the major consumers as in semi trucks are still buying at the same levels so if we are still buying at $3. 25 then I am sure that is where they will leave it. Diesel pick up drivers are still a very small percentage of diesel consumers.

Diesel is more of a lifeline to this country than gasoline will ever be. Everything you have in your home, including your refridgerator is touched or handled by a truck during its delivery to your local store. Diesel prices are going to be a huge stranglehold in prices to consumers, not just gasoline. The typical shopper is either too stupid or too ignorant to realize the effects the trucking industry is dealing with regarding fuel.



Don't think for a minute that a diesel pickup truck is insignificant to the consumer market. Nearly every contractor, delivery service, and road side repair company utilizes Diesel pickups. If a person who owns a diesel truck for the purpose of bragging rights or just to make a daily drive to work, I have no sympathy for them right now. Those in this category can either suck it up, or go buy a gasoline high MPG car.

My concerns lie with the folks who drive for a living and have no choice but to pay the high costs. They are the true victims of this in the short term scenario.

 

[JasonBrown]

I agree that this will affect all consumers. I am just saying that I believe this is the approach taken by the fat cat oil tycoons that are running these huge companies. They have no grasp on the working man's reality. They are only in it for the money, regardless of how much it hurts those who are not independently wealthy. As long as the trucking industry continues to operate at the same level, the oil companies will continue to charge the maximum amount they can get.

 

[Rman]

Diesel is more of a lifeline to this country than gasoline will ever be. Everything you have in your home, including your refridgerator is touched or handled by a truck during its delivery to your local store. Diesel prices are going to be a huge stranglehold in prices to consumers, not just gasoline. The typical shopper is either too stupid or too ignorant to realize the effects the trucking industry is dealing with regarding fuel.



Don't think for a minute that a diesel pickup truck is insignificant to the consumer market. Nearly every contractor, delivery service, and road side repair company utilizes Diesel pickups. If a person who owns a diesel truck for the purpose of bragging rights or just to make a daily drive to work, I have no sympathy for them right now. Those in this category can either suck it up, or go buy a gasoline high MPG car.

My concerns lie with the folks who drive for a living and have no choice but to pay the high costs. They are the true victims of this in the short term scenario.

While I agree that diesel is important, and ours goods depend on it. They are nothing more then a drop in the bucket compared tot he number of gasoline engines and the amount of gasoline consumed vs. diesel. All those contractors, all those delivery trucks, all those road side repair trucks don't even amount to 10% of vehicles... Not counting OTR trucks.



The number of cars on the road is staggering, the amount of fuel this country consumes a day is staggering.

 

[Tractorat]

diesel gas cost

Well, I keep hearing all about how there is only a limited supply of oil and that is why fuel is going up. That is really a good arguement if the short supply is causing shortages somewhere, and everyone is bidding up the price so the person with the least amount of cash and cant pay the price ends up being the one without. However, I havent heard of any oil shortages anywhere (the hurricane areas dont count. Price was being jacked up well before them). Can anyone else relate any stories of oil shortages ?



Just curious

 

[Rman]

During the crisis (the storms) there was fuel shortages (there's a difference in oil and fuel) for instance, we called our local supplier and tried to get 500 gallons of diesel delievered before the rush to the pumps. They would only supply us 200 gallons because of rising demand and they tried to fill many orders so they were cutting peoples orders to accommodate what they had in supply.



So yes their is a valid "shortage", I don't think it's valid enough to be paying $3+ for a gallon of fuel though.

 

[CTD 600]

Why are prices so high?

Why Are Diesel Prices So High?



Even as retail gasoline prices have fallen below pre-hurricane levels, retail diesel fuel prices remain much higher. Whereas retail diesel prices averaged 2 cents per gallon below gasoline on August 29, before the impacts of Hurricanes Katrina and Rita were felt at the pump, as of October 24, they averaged more than 55 cents per gallon higher across the United States (see graph below). What has changed between the two markets that might help explain the divergence in retail prices?







While the price of crude oil certainly has an impact on the price of refined products, the actual cost of refining crude oil into various products has little to do with price differentials across products. When comparing the retail price of one particular product to another, it is important to look at the supply/demand situation for both products. In the case of gasoline, over the last four weeks, a record volume of imports arrived in three of those weeks, while gasoline production climbed to near pre-hurricane levels, despite significant refinery capacity remaining shut down.



This large surge in supply is coming at a time (late September and early October) when gasoline demand usually drops, with few people taking vacations during this time of year. When supplies rise as demand falls, prices should fall, as they have with gasoline.



However, the supply/demand balance is much different for diesel fuel. Diesel fuel and heating oil are both included in a category labeled distillate fuel in our weekly surveys. These products are very similar, with the notable exception that diesel fuel for highway use has less sulfur in it. To the extent that diesel fuel can be used as a substitute for heating oil, the two products often find their prices moving in similar directions. Since heating oil prices are generally highest when demand for the product peaks, diesel prices also often peak as cold weather occurs, as owners of diesel-fuel-powered vehicles will tell you. As can be seen from EIA’s data, demand for distillate fuel often increases from September to October. This is typically a result of slightly colder weather in October, but it also relates to increased use of diesel fuel in the agriculture sector during harvest time. While demand for distillate fuel seasonally increases over this period, supplies have grown substantially less than those of gasoline.



While distillate fuel production has increased some as a result of most refineries coming returning to normal operating levels following the hurricanes, it has not grown by nearly as much as gasoline production. We have not seen record imports for distillate fuel either. In fact, up until last week (the week ending October 21), distillate fuel imports were possibly even lower than they typically would be, as strong global demand for diesel may have limited available supplies from other countries. As a result, retail prices for both diesel fuel and heating oil have not dropped like those for gasoline. Nevertheless, with distillate fuel imports last week reaching their highest level since January 2005, and with most of the increase in refinery production seen in distillate fuel rather than gasoline, there may be signs that the distillate fuel supply situation is improving.



But with the first bout of much colder-than-normal weather hitting the East Coast this week (where most of the heating oil use occurs), demand is likely to increase as well. How fast supply and demand for distillate fuel rise will be the largest determinant for the future path of diesel fuel prices.





Official Energy Statistics from the U. S. Government

http://www.eia.doe.gov



I posted this on another thread in here. It apply's to almost every question to why diesel is so high. Good reading from that site.

 

[Gary - K7GLD]

TO me, after all the related discussions across several forums related to crude oil and various pricing issues, I have come to several personal opinions:



1. Yes, government has a hand directly in the energy profits cookie jar, and isn't nearly as interested in seeing that revenue reduced, unless a truly emergency situation occurs.



2. Big Oil , along with government, works pretty closely hand-in-hand with middle East sources to assure they all get a maximum slice of the oil profits pie - concern or consideration of individual consumers, or their individual nations is hardly at the top of their list of concerns.



3. For the vast, most part, individual stations and area distributors figure pretty low in the profit chain - large variations in pump prices probably don't see as much coresponding profit percentages to the station owner and local distributor as we might think.



4. The REAL, and MAJOR beneficiary of crude and overall energy costs, are to the source, OPEC and similar. I personally feel THEY are purely operating NOT on a reasonably rigid profit margin, but FAR more a what the traffic will bear basis. And they have LITTLE sympathy, or concern for the end user of their product - it's ALL about the $$$.



Sure, we can rightfully blame government and stateside corporate heads for a significant percentage of rising energy costs - but the GIANT share of the blame actually goes overseas to the crude oil source!



NO, I don't buy the "adjusted for inflation" excuse for what outfits like OPEC charge for their crude oil - and have LITTLE doubt that if a massive energy replacement was developed for crude oil, you would AGAIN see OPEC and others cutting their price WAY down below $20 a barrel, where they would still be making substantial profit!



As far as I'm concerned, current crude oil pricing has precious little to do with the actual cost to OPEC members for the various production costs involved in obtaining their crude oil, and EVERYTHING to do with the power of monopoly they hold, with the active cooperation of governments and oil refiners who have THEIR hands in the same pot with OPEC...



I have YET to see ANY documentation related to actual OPEC crude oil production costs across the last 40 years or so, as compared to the pricing of their oil to their buyers. Instead, we spend most of our time laying all the blame upon those on our side of the pond - when I suspect the biggest villain in runaway energy expense lives in the middle East...

 

[Koa Man]

Exxon Mobil record profit

This just off the AP.

IRVING, Texas - Exxon Mobil Corp. had a quarter for the record books. The world's largest publicly traded oil company said Thursday high oil and natural-gas prices helped its third-quarter profit surge almost 75 percent to $9. 92 billion, the largest quarterly profit for a U. S. company ever, and it was the first to ring up more than $100 billion in quarterly sales