Dwight Schrute
I am faster than 80% of all snakes
Its Dionne.
And more supply means lower prices...its that whole pesky supply and demand thing again..
increasing offshore drilling
- Thread starter Nightwanderer
- Start date
Its Dionne.
And more supply means lower prices...its that whole pesky supply and demand thing again..
Dwight Schrute
I am faster than 80% of all snakes
Yeah....its another example of how people don't think things through. Instead of oil I want electric.....while not understanding that most the electric companies use coal which is 10x worse for the environment than oil...but hey, don't let those facts get in the way
Dwight Schrute
I am faster than 80% of all snakes
Ok SN, we're on page 4 now. Seriously, just say it already.
"No Oil for you!!!"
:dance:
thesinner
Recovering AXoholic
Worded a little funny, but I'm sure you're talking in absolutes as opposed to relatives or using the transitive property or something. Both supply and demand have actually been increasing for quite some time.
As qty supplied increases, price actually increases. The X/Y chart shows supply curve with a positive slope (Q increases with S). Of course, this is based on how much you can produce. As production increases, quality/productivity decreases, meaning that after a certain point, it costs more $$$ to produce more petrol-based goods. (jmh and I call this "3rd shift".
).In the case with gas/oil, there's 2 factors.
-1- The supply curve is stagnant, and demand is moving to the right as we've been consuming tons more gas since the late 90's.
-2- The supply curve is moving to the left (which I think is what you were implying).
Both factors lead to an equilibrium point with a greater Y value between both curves, which means price increases. We're also neglecting the steadily weakening dollar, in which case both curves are spreading out even more.
Dwight Schrute
I am faster than 80% of all snakes
That's why I said the margins are dropping....and some people don't seem to understand that.
There is a reason OPEC is trying to lower the price. People think oil companies want oil at $140....when its the opposite.
The general public doesnt understand it and politicians love it.
Dwight Schrute
I am faster than 80% of all snakes
Definitely. Its another reason almost all commodities are up as well....
Look at Steel, Natural Gas, Coal, etc...they are actually up more than oil but you can invest in them without worrying about the geopolitical rhetoric.
futurepilot
Well-known member
Yeah....its another example of how people don't think things through. Instead of oil I want electric.....while not understanding that most the electric companies use coal which is 10x worse for the environment than oil...but hey, don't let those facts get in the way
I may have been unclear in my earlier post. I have a solar powered generator. I dont know how much cleaner i could get than that.
futurepilot
Well-known member
retail margins may be dropping, but they're more than making up for it in with the bulk of their business, which is not retail.
futurepilot
Well-known member
i may have put my foot in my mouth a few times, im not going to lie, but i still believe the base of my arguement is sound: Its not worth the possibility of some large oil find to go drilling in the gulf, or ANWR or anywhere else for that matter. There are viable options outside of oil that we could put on the fast track now with American know how, and ingenuity. I feel we could have an alternative within a few years. Look at the X prize, that worked out great.
Dwight Schrute
I am faster than 80% of all snakes
So what....thats what business's do. If you don't like it, don't buy it.
And no, they are not making it up.
Dwight Schrute
I am faster than 80% of all snakes
Yes..you we're wrong about oil supplies. You were wrong about oil shale. You were wrong about their margins. You were wrong about their stock being meaningless. You were wrong about the price in the futures market being meaningless.....but other that that, you're doing just fine.
:wave:
futurepilot
Well-known member
Senior, to be making making the most money they have exer made in the history of the industry they have to be getting it from somewhere, hence if their profit margins are going down in retail, which they are, they are making it up in the rest of their business ventures.
And stock, for the most part is meaningless, look at the tech bubble. Sun micro systems was once trading at $130 a share, now it trades at $10. Stock price, like i explained earlier is determined not by rational thought and analysis, its being determined by Jim Cramer, and people who watch "the street" instead of doing their own research.
It wasnt always that way, but that is the nature of the market right now.
Hank Vangut
Well-known member
for anyone who cares to view..........i'll be on cnbc tomorrow at 12:20est discussing crude oil.
futurepilot
Well-known member
thesinner
Recovering AXoholic
@ 3% thermal efficiency and the cost of materials for which to build one.........
futurepilot
Well-known member
Invalid Link Removed
This isnt mine, it an example of the one im going to use. At this wattage, unmodified it would take about 10 hours to charge a car. With each solar panel you add, it cuts the time in half.
Or by using a 240 volt circuit you can conceivably charge your car in 4-5 hours.
Nabisco
Well-known member
They are making record profits because the US is consuming record amounts of gasoline. I find it incredulous that you refuse to believe jmh80 who works in a Refinery. But I'll add (since I also work with Oil and Gas Refineries) that their profit margins have decreased in the past 5-10 years. They are cutting costs left and right, running on skeleton crews, automating systems all because their margins are decreasing and they are attempting to squeeze every nickel out of their process (which is what successful companies do).
Take a look at the refining companies out there and research a little thing called "Crack spread". This is the difference between the price of crude oil and the price of the commodity made from that crude oil. You want lower gas prices. Build new refineries in the United States, but Congress won't allow that. Take a stab at a little research and find out when the last refinery was built in the US, or maybe Jmh80 will feel inclined to enlighten you.
Drilling for oil here in the US or off the coast will help alleviate the cost of your gasoline, only if we refine it in the US. Did you know Iran is a large producer of crude oil, but they have ridiculous gasoline prices? Want to know why? They have to export the crude, have someone else refine it, and import the gasoline back in.
While the US is sitting on its hands, building no new infrastructure, Saudi Arabia, Dubai and other Middle Eastern companies are spending billions of dollars upgrading their refineries to product Ultra Low Sulfur Diesel, and gasoline.
Next lets address the alternatives...
Nuclear Power is viable, but no one wants one in their backyard because of ignorant fear.
Solar Power is not viable, because the current efficiency rate of buildable and sellable units has yet to climb above 28%.
Wind Power is viable, but its expensive as hell and requires fairly high wind velocities to work, not to mention space. And the public is all for wind power as long as it's not near their home.
Corn to Ethanol as fuel, don't make me laugh. Any self-respecting chemical engineer will tell you that entire thing is a sham. South America gets away with it because they use sugar cane. There are some viable alternatives through the use of micro-algae as well, but that requires you to still drill, refine, and supply gasoline as well.
Electric Cars is not currently viable and would require a HUGE change in infrastructure to make it viable. There are other fuel cells in development that may yield results, but electric isn't the answer.
Hydroelectric has its uses, but there aren't enough rivers to make that viable.
Coal, Natural Gas, and Crude Oil are your products like it or not. For the next two decades at a minimum the world will continue to rely on those three, because technological advances don't happen over night.
Last but not least, I'm going to gently refute your comment on the market. Stocks are not meaningless. The majority of the time they are based off of P/E ratios, market cap, among other simplistic methods. Jim Cramer has ZERO effect on the market. Even with all his viewers, he can't shift a stock much beyond a percentage point or two and they always rebound back to where they were before his latest show. The tech bubble was part speculation, part everyday joe's jumping into the market without doing any research, and a large part over valuation. It was bound to return to normalcy, it is not a good reference for the stock market in general as your post suggests.
So there is another chemical engineer's "opinion" on the industry that you are currently talking about (from someone who works in said industry). You can't limit our current resources because you don't like them and you want something else. That's not the way the world works my friend. Thats like saying "No one is allowed to have any more microwave dinners, because it's getting expensive and its not good for your body's "environment". You all must change to fresh, homecooked meals because it's a better alternative". When you know very well that the microwave dinner is currently cheaper, easier, and more abundant. (perhaps not a great analogy, but I'm an engineer not an English major)
futurepilot
Well-known member
the prices of gas in Iran right now is about .70, your right, rediculously low.
futurepilot
Well-known member
and i dont beleive jim cramer himself controlls the market. He's just an example of one of the many talking heads who influences traders, especially those with e-trade type accounts, and they in turn influence the market.
Dwight Schrute
I am faster than 80% of all snakes
You're clueless.
Traders don't move the price, pension funds and mutual fund managers move the price.
The people that follow anyone like Jim Cramer are individual investors that are a pimple on a pimple on a pimple...that's how small they are and they have NO influence on the markets. The only influence they have is on the people sitting by waiting to short the morons who go buy stock right after he recommends it in after hours trading.
Serisouly, get a clue before you start talking about the market. You are so wrong its embarassing.
Dwight Schrute
I am faster than 80% of all snakes
It could be the 30% decline in the value of the dollar....but you wouldn't have clue about that anyway.
Seriously, just stop talking. You are so wrong on so many levels that its now becoming embarrassing for you. Serisouly, just stop....
futurepilot
Well-known member
And you think that the people that run funds, and brokers, and everybody else that trades dont watch TV? By virtue of you knowing who im talking about means that you watch television, which means that others in your field watch TV, and whether they admit it or not i feel confident in my assumption that some of their decisions are in part related to what they see on the tube, it's the nature of humans to take advice from percieved authority figures.
Dwight Schrute
I am faster than 80% of all snakes
Holy ****...
How you can lump fund managers, who manage billions of dollar in assets with fvkcin brokers shows you have no clue what you are talking about. You are completely and utterly lost and clueless...
Jim Cramer managed at best a 450 million dollar hedge fund. Mutual fund managers control billions...they are not taking advice form Jim Cramer..its quite the opposite. Jim Cramers way of investing in stocks is based on what mutual fund managers are doing. Mainly P/E ratios, PEG and balance sheets....followed by the transitional flow of money into and out of sectors based on the business cycle. EVERYONE follows the large fund managers. Its why DARK POOLS EXIST!
Seriosuly, stop.....You are so out of your league and don't have the slighest idea of what you are talking about. Before I gave you a fighting chance but the last 3 statements you made show that you are a competely cluess 23 year old that knows absolutely nothing about the stock market.
Dwight Schrute
I am faster than 80% of all snakes
Its just painful....
futurepilot
Well-known member
Alright, this is going nowhere, along with being wildly off topic. So ill leave it alone, you have your thinly veiled insults, and i have my opinions, by our powers combined we make captain planet. Good day.
slow-mun
Well-known member
I'd say that is pretty high for people in Iran. I'd also say that your argument is running out of steam. Maybe a good dosage of some solar power will get it going again.:ntome:
Hank Vangut
Well-known member
they always put it up on the cnbc site later in the day or next day.
Hank Vangut
Well-known member
newman is right. the recent run in crude price has nothing to do with the 'talking heads' or traders. they have little to no influence in such a big market.
this recent run (past 6 months) in crude price is primarily driven by the declining dollar. crude is a dollar denominated commodity so a weak dollar makes crude oil cheaper (comparativly) in international markets, supporting demand in places like Europe and China.
also, a weak dollar and equities market is causing funds to shift investments into energy. crude oil is a hedge against a declining dollar for these funds.
right now today, the investment case for buying crude oil isn't all that strong at $140/barrel, it's just other investment options stink worse at the moment, so the money is flowing into commodities.
this recent run (past 6 months) in crude price is primarily driven by the declining dollar. crude is a dollar denominated commodity so a weak dollar makes crude oil cheaper (comparativly) in international markets, supporting demand in places like Europe and China.
also, a weak dollar and equities market is causing funds to shift investments into energy. crude oil is a hedge against a declining dollar for these funds.
right now today, the investment case for buying crude oil isn't all that strong at $140/barrel, it's just other investment options stink worse at the moment, so the money is flowing into commodities.
Nabisco
Well-known member
You care to provide a reference to that one? Why don't I reference a few...
Iranian budget deficits have been a chronic problem, mostly due to large-scale state subsidies, that include foodstuffs and especially gasoline, totaling more than $84 billion in 2008 for the energy sector alone.
Iran ranks second in the world in natural gas reserves and third in oil reserves.[107] It is OPEC's 2nd largest oil exporter. In 2005, Iran spent US$4 billion dollars on fuel imports, because of contraband and inefficient domestic use
Thats how they do it my friend. By bankrupting the state. And the few times they have removed the subsidies the country has broken out in riots. Not to mention the few times they have rationed gasoline with the same end result.
And slow-mun beat me to it with the addition of average salary in Iran vs US.
jmh80
Well-known member
Great post Nab.
I'd just comment that yes - the last new refinery was in '78. We've had to debottleneck our refineries since then and actually make a bit more mogas today with less refineries than the early 80's.
I would have said that making a current refinery bigger is much easier/faster to permit, but after reading about BP's difficulties to increase crude oil processing capability at it's Whiting, IN refinery I'm not so sure it's a whole lot easier. (The environmentalists have effectively stopped work from what I've seen. GREAT!)
The other aspect to consider is that it's more expensive to build a brand new refinery than to make a current one bigger. You have to add the key infrastructure (cogen for steam, air, water, nitrogen) vs. just getting bigger pipe (or whatever).
Not true that we are sitting on our hands. We are adding a 400 or 500 million $ ULSD (ultra low sulfur diesel) unit to our refinery to make the 5 ppm sulfur diesel.
(Which adds cost to a gallon...)
I know the rest of the company's refineries in the US are adding ultra low sulfur capability somehow.
Now - not sure we are quite adding the ULSD capacity that other countries are adding (so that they can import ULSD to the US). I've not read up on that aspect or heard that much for that matter.
jmh80
Well-known member
Again - you should read on incremental economics.
So it's 70 cents - the refinery that makes the next gallon of gas should be getting what price for it?
Nabisco
Well-known member
Agreed, and point taken. I was attempting to get across that we needed more capacity here in the US to drastically lower cost of gas at the pump. So I'd agree that expanding current refineries is a much more cost effective way than building brand new.
As far as my knowledge goes for ULSD. It seems Saudi and some other Middle Eastern exporters are updating nearly all of their Diesel plants to hit that 5 ppm ULSD mark due to a drastic shortage in Europe (their reasoning conveyed to our company). Apparently Europe is already quite short on ULSD and demand is increasing ahead of supply over the past few years. I wasn't aware that some of the US refineries were doing the same. You learn something new everyday.