Oil markets await details of hurricane impact

[ARCHIVED THREAD] - Oil markets await details of hurricane impact (Page 1 of 2)

Posted: 8/30/2005 2:25:26 AM EDT

Oil markets await details of hurricane impact

By Sheila McNulty in Houston and Carola Hoyos in London
Published: August 29 2005 18:34 | Last updated: August 30 2005 09:25

news.ft.com/cms/s/9c11d928-18b1-11da-8fe9-00000e2511c8.html

Satellite photo of hurricane IvcanOil prices remained high on Tuesday amid uncertainty over the level of damage Hurricane Katrina has inflicted to platforms and ports in the Gulf of Mexico. About 50 per cent of US crude refining capacity is located along the coast, prompting concerns about a further squeeze on oil product prices such as petrol.

By mid morning on Tuesday, the benchmark Nymex West Texas Intermediate for October delivery - was up 71 cents at $67.91 a barrel after its fall from a record $70.80 set on Monday. Petrol futures traded at $2.0955 a gallon after peaking on Monday at $2.16. Natural gas, which on Monday surpassed $12 per million Btu, stood at $11.663.

Anan Shihab-Eldin, acting OPEC Secretary-General told an energy conference in Oslo on Tuesday that if economic fundamentals, rather than perceptions of shortages, dominated the oil markets, there could be price stability. “Fundamentals do not justify the current price levels,” he said. “Forty dollars a barrel is a floor, but I could see around $50-55”, he added. “We want to reassure the market that stock levels are building up.” He also backed a proposal by Sheikh Ahmad al-Fahd al-Sabah, the OPEC President, on Modnay, to raise output by 500,000 barrels per day at a meeting in September in an attempt to help cool oil prices.

Seperately, the US insurance market was bracing itself against a possible $26bn in storm damage claims, according to AIR Worldwide. The insured losses caused by Hurricane Katrina may make it the worst natural disasters in US history. Hurricane Andrew became the most expensive natural catastrophe when it hit Florida in 1992, causing $30bn of damage, though only $17bn of it was insured, according to Munich Re, the world's biggest reinsurer.

Oil and gas markets came under intense pressure on Monday as the Hurricane Katrina swept through the Gulf of Mexico, forcing the closure of oil production platforms, refineries and the Henry Hub the biggest US trading centre.

The US mineral management service, the federal body that oversees production in the Gulf, said 91.7 per cent of total production had been closed with the loss of 1.38m barrels a day.

Analysts said about 12 per cent of US crude oil production output and 10 per cent of total US refining capacity had been shut down.

Meanwhile, in what was seen as a political gesture, as much as an economic one, Saudi Arabia said it was ready to boost its oil output to 11m barrels a day and sustain that level to replace any shortages in the market caused by the storm.

Oil prices hit a new record of $70.80 a barrel on Monday, although they fell back to $67.20, while petrol futures traded at 213.80 cents a gallon, up more than 10 per cent. But the biggest impact was felt on the natural gas market, where prices surged 23 per cent, surpassing $12 per million Btu.

Oil refineries were hit hard, with expectations that capacity of 1.8m barrels a day has been shut down by the storm that ripped through the heart of America's oil region. Analysts said it would be days before the damage could be assessed. Henry Hub avoided a direct hit and was reopened after Katrina was downgraded from the highest category five to a category three, and changed direction at the last minute. Though, in an ominous sign, Shell reported two drilling rigs adrift.

Claude Mandil, executive director of the International Energy Agency which he group that co-ordinates oil releases from the strategic oil stocks of the world's biggest consumers said a decision would be made only once the damage had been assessed, possibly by the end of this week.

“We have plenty of commercial stocks worldwide to wait those six days,” he told the Financial Times. The Bush administration said it would consider dipping into the nation's emergency crude oil stockpile if asked to do so by US refiners.

Citgo Petroleum was the first in line, with a request for 250,000 to 500,000 barrels.

If refinery damage proves to be severe, Europe will need to send some of its emergency petrol stockpiles to the US, Mr Mandil said.

Asian markets were hit by fears about the impact of higher energy prices on oil importers economies such as Japan, China and Indonesia. In Tokyo, the Nikkei 225 index closed down more than 1 per cent to 12,309.83 and the yen weakened against the dollar.

European markets fell, but a late recovery was led by oil groups as investors looked to higher profits in the sector.

Oil producers in the US were weaker as markets worried about the production disruption caused by the hurricane.

Some economists were already downgrading their estimates for US third-quarter growth, over as a result of Katrina's impact on the energy sector as well as the New Orleans and investors fled to safe haven instruments such as government bonds, where prices rose. The 10-year yield dipped 3 basis points to 4.16 per cent, just above a month-low.

US stocks fell early on as the hurricane moved inland but investors recovered their poise later in the day and the Dow Jones Industrial Average closed up 65.76 points on hopes the damage from Katrina might be less than had been feared.

Additional reporting by Jennifer Hughes in New York and Stephanie Kirchgaessner in Washington

Posted: 8/30/2005 3:06:57 AM EDT

[#1]

Labor day weekend is coming up, at the pump their mind is already made up.

Posted: 8/30/2005 4:25:04 AM EDT

[#2]

bump

Posted: 8/30/2005 4:27:09 AM EDT

[#3]

Quoted:
Labor day weekend is coming up, at the pump their mind is already made up.

Amen. It would have went up anyway. Now they have a convienent excuse.

Let's face it, these days a fart will make the price of gas jump.

Posted: 8/30/2005 4:37:03 AM EDT

[#4]

I don't see what difference Saudia Arabia pledging an increase in crude production will make for us. Even if they manage to increase production, which isn't very likely as they're running all out now, it still has to be refined. That's where we took the biggest hit; refining. You can't put crude in the gas tank, and now we're short on refinery capacity due to storm damage.

I don't see how the industry will be able to catch up and build gas stocks up to a solid level, let alone get fuel oil production started for the winter. Gonna be really interesting to be sure.

Posted: 8/30/2005 4:41:04 AM EDT

[#5]

Quoted:
I don't see what difference Saudia Arabia pledging an increase in crude production will make for us. Even if they manage to increase production, which isn't very likely as they're running all out now, it still has to be refined. That's where we took the biggest hit; refining. You can't put crude in the gas tank, and now we're short on refinery capacity due to storm damage.

I don't see how the industry will be able to catch up and build gas stocks up to a solid level, let alone get fuel oil production started for the winter. Gonna be really interesting to be sure.

And for some reasons, the US aren't making new refiniries which adds to the problem.

Posted: 8/30/2005 4:41:06 AM EDT

[#6]

... Develop Coal Liquefaction - Independent of Big Oil

Now

www.encyclopedia.com/html/F/FischerT1.asp

www.post-gazette.com/healthscience/20021223coalfuelsci1p1.asp

Posted: 8/30/2005 5:51:14 AM EDT

[#7]

They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

Posted: 8/30/2005 5:56:40 AM EDT

[#8]

As a Texan all I can say is "Put the pumps and refineries above max Earl! We've got people lining for some black gold, yeeehaaaw!" You guys in LA need not worry, we're already sending the fuel truck$ over.

Posted: 8/30/2005 6:02:41 AM EDT

[#9]

Quoted:
Quoted:
I don't see what difference Saudia Arabia pledging an increase in crude production will make for us. Even if they manage to increase production, which isn't very likely as they're running all out now, it still has to be refined. That's where we took the biggest hit; refining. You can't put crude in the gas tank, and now we're short on refinery capacity due to storm damage.

I don't see how the industry will be able to catch up and build gas stocks up to a solid level, let alone get fuel oil production started for the winter. Gonna be really interesting to be sure.

And for some reasons, the US aren't making new refiniries which adds to the problem.

If Bush were smart, he would say, hey, screw the environmental regs, screw the Dems, and screw the greenies....build all the new refineries you want, EPA...you are on notice, you WILL expedite all paperwork, there will be no scrutiny, just sign 'em and send 'em.

Posted: 8/30/2005 6:08:48 AM EDT

[#10]

Quoted:
Quoted:
Quoted:
I don't see what difference Saudia Arabia pledging an increase in crude production will make for us. Even if they manage to increase production, which isn't very likely as they're running all out now, it still has to be refined. That's where we took the biggest hit; refining. You can't put crude in the gas tank, and now we're short on refinery capacity due to storm damage.

I don't see how the industry will be able to catch up and build gas stocks up to a solid level, let alone get fuel oil production started for the winter. Gonna be really interesting to be sure.

And for some reasons, the US aren't making new refiniries which adds to the problem.

If Bush were smart, he would say, hey, screw the environmental regs, screw the Dems, and screw the greenies....build all the new refineries you want, EPA...you are on notice, you WILL expedite all paperwork, there will be no scrutiny, just sign 'em and send 'em.

anyone have that pic of that hell sign freezing over?

Posted: 8/30/2005 6:10:32 AM EDT

[#11]

The infotainment outlets just cream themselves when they hear about the price of gas going up.

Ticks me off no end.

Posted: 8/30/2005 6:14:08 AM EDT

[#12]

Quoted:
They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

You have zero evidense to support this bs.
Supply and demand is the cause of the high and sometimes the low price of crude.
I have never one time heard any person say "Man those oilfield guys are hurting with this $20/ bbl oil. What can we do to help them and their families"

It pisses me off when people moan about the high price of fuel.......if you don't like the damned price quit buying it.

Oh wait.....you don't want to walk. I guess the price isn't too high yet.

The oilfield has ALWAYS had highs and lows, it will be back down. The question is when

Posted: 8/30/2005 6:17:32 AM EDT

[#13]

Quoted:
Quoted:
They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

You have zero evidense to support this bs.
Supply and demand is the cause of the high and sometimes the low price of crude.
I have never one time heard any person say "Man those oilfield guys are hurting with this $20/ bbl oil. What can we do to help them and their families"

It pisses me off when people moan about the high price of fuel.......if you don't like the damned price quit buying it.

Oh wait.....you don't want to walk. I guess the price isn't too high yet.

The oilfield has ALWAYS had highs and lows, it will be back down. The question is when

Are you from Midland by any chance???

Posted: 8/30/2005 6:27:57 AM EDT

[#14]

Quoted:

Are you from Midland by any chance???

Nope, I live in East Texas.....we got a big oil and gas industry here too.

Posted: 8/30/2005 6:32:06 AM EDT

[#15]

Quoted:
Quoted:
Quoted:
I don't see what difference Saudia Arabia pledging an increase in crude production will make for us. Even if they manage to increase production, which isn't very likely as they're running all out now, it still has to be refined. That's where we took the biggest hit; refining. You can't put crude in the gas tank, and now we're short on refinery capacity due to storm damage.

I don't see how the industry will be able to catch up and build gas stocks up to a solid level, let alone get fuel oil production started for the winter. Gonna be really interesting to be sure.

And for some reasons, the US aren't making new refiniries which adds to the problem.

If Bush were smart, he would say, hey, screw the environmental regs, screw the Dems, and screw the greenies....build all the new refineries you want, EPA...you are on notice, you WILL expedite all paperwork, there will be no scrutiny, just sign 'em and send 'em.

If all of the laws & regs were met today, it would still takes years to build a refinery. It's not like putting a brickwall. Refineries are very complicated pieces of equipment.

Posted: 8/30/2005 6:38:36 AM EDT

[#16]

Quoted:
Quoted:
They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

You have zero evidense to support this bs.
Supply and demand is the cause of the high and sometimes the low price of crude.
I have never one time heard any person say "Man those oilfield guys are hurting with this $20/ bbl oil. What can we do to help them and their families"

It pisses me off when people moan about the high price of fuel.......if you don't like the damned price quit buying it.

Oh wait.....you don't want to walk. I guess the price isn't too high yet.

The oilfield has ALWAYS had highs and lows, it will be back down. The question is when

The only evidence I have is the anecdotal evidence I have seen over the last few years watching gas prices.

Supply and demand my ass....I am talking about the big petro chem companies here...not the guys working the fields.

I take it you work in the oil industry...explain this. The price of a barrel of oil goes up. Almost immediately it is reflected in the price at the pump. But, conversely, when the price of a barrel drops, it takes weeks to see any corresponding drop at the pump. Not to mention if the wholesaler paid (simplifying to make a point) $2.45 a gallon for whats in his tanks, there is no reason to raise his prices until he buys his next load...but they do.

Now I heard a guy on the radio this morning explaining it as a commodity issue. Like gold. You buy an ounce of gold from a dealer. He may have paid $400 for it when he bought it...but today gold is at $450 an ounce...you pay the $450. All well and good...but if gold was $450 yesterday, and $410 today and you buy today...guess what, you pay $410...

Unlike gas stations, where they paid $2.45 for the gas, but today it is $2.65 a gallon, today you pay $2.65. Tomorrow it drops to $2.60...guess what, you still pay $2.65.

And I like it when oil guys bitch about people bitching about prices. Their answer is always well, if you don't like it, don't buy it. Well, thats just what it will come down to. People will soon not be able to afford it, and they will drastically cut back, and find alternative answers. Then the oil guys will be crying poverty cause no ones buying....People only have so much to spend...spending more on fuel will cause them to spend less on other things, spinning the country into a recession.

Sorry, I see it as big oil screwing people out of as much profit as possible. Explain oil companies raking in record profits while continuously raising prices using any excuse in the book to do it.

Posted: 8/30/2005 6:40:20 AM EDT

[#17]

Quoted:
If all of the laws & regs were met today, it would still takes years to build a refinery. It's not like putting a brickwall. Refineries are very complicated pieces of equipment.

Well, even more the reason to start building more today..they ain't gonna build themselves...

Someone needs to step on the EPA, I believe them, the Dems, and greenies are the major stumbling blocks....

Posted: 8/30/2005 6:44:46 AM EDT

[#18]

You don't understand economics of owning a gas station.

The reason gas prices are so quick to change are because of the owners of the stations.

AND THEY HAVE TO DO IT THIS WAY.

If you are gas staion owner and you have 10,000 gallons of gas in the ground that you paid $2. for and you are selling for 2.08.

If the wholesale price goes up to 2.09, when you sell out even though you made money, you can't refill your tanks. You would have to raise your price to $2.17 to make the same amount.

Understand the situation before spouting off about what you "see".

It is what you can't see that is the reality.

Posted: 8/30/2005 6:50:33 AM EDT

[#19]

Quoted:
You don't understand economics of owning a gas station.

The reason gas prices are so quick to change are because of the owners of the stations.

AND THEY HAVE TO DO IT THIS WAY.

If you are gas staion owner and you have 10,000 gallons of gas in the ground that you paid $2. for and you are selling for 2.08.

If the wholesale price goes up to 2.09, when you sell out even though you made money, you can't refill your tanks. You would have to raise your price to $2.17 to make the same amount.

Understand the situation before spouting off about what you "see".

It is what you can't see that is the reality.

Fine, then why don't they drop the price as quickly as they raise it...why is the price jump due to market stimuli almost immediate, yet price drops lag for days or weeks or never at all...

Posted: 8/30/2005 6:54:24 AM EDT

[#20]

Quoted:
Quoted:
Quoted:
They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

You have zero evidense to support this bs.
Supply and demand is the cause of the high and sometimes the low price of crude.
I have never one time heard any person say "Man those oilfield guys are hurting with this $20/ bbl oil. What can we do to help them and their families"

It pisses me off when people moan about the high price of fuel.......if you don't like the damned price quit buying it.

Oh wait.....you don't want to walk. I guess the price isn't too high yet.

The oilfield has ALWAYS had highs and lows, it will be back down. The question is when

The only evidence I have is the anecdotal evidence I have seen over the last few years watching gas prices.

Supply and demand my ass....I am talking about the big petro chem companies here...not the guys working the fields.

I take it you work in the oil industry...explain this. The price of a barrel of oil goes up. Almost immediately it is reflected in the price at the pump. But, conversely, when the price of a barrel drops, it takes weeks to see any corresponding drop at the pump. Not to mention if the wholesaler paid (simplifying to make a point) $2.45 a gallon for whats in his tanks, there is no reason to raise his prices until he buys his next load...but they do.

Now I heard a guy on the radio this morning explaining it as a commodity issue. Like gold. You buy an ounce of gold from a dealer. He may have paid $400 for it when he bought it...but today gold is at $450 an ounce...you pay the $450. All well and good...but if gold was $450 yesterday, and $410 today and you buy today...guess what, you pay $410...

Unlike gas stations, where they paid $2.45 for the gas, but today it is $2.65 a gallon, today you pay $2.65. Tomorrow it drops to $2.60...guess what, you still pay $2.65.

And I like it when oil guys bitch about people bitching about prices. Their answer is always well, if you don't like it, don't buy it. Well, thats just what it will come down to. People will soon not be able to afford it, and they will drastically cut back, and find alternative answers. Then the oil guys will be crying poverty cause no ones buying....People only have so much to spend...spending more on fuel will cause them to spend less on other things, spinning the country into a recession.

Sorry, I see it as big oil screwing people out of as much profit as possible. Explain oil companies raking in record profits while continuously raising prices using any excuse in the book to do it.

Just another example of someone who lacks any knowlage about capitalism and economics.

Posted: 8/30/2005 6:55:10 AM EDT

[#21]

Quoted:
Quoted:
You don't understand economics of owning a gas station.

The reason gas prices are so quick to change are because of the owners of the stations.

AND THEY HAVE TO DO IT THIS WAY.

If you are gas staion owner and you have 10,000 gallons of gas in the ground that you paid $2. for and you are selling for 2.08.

If the wholesale price goes up to 2.09, when you sell out even though you made money, you can't refill your tanks. You would have to raise your price to $2.17 to make the same amount.

Understand the situation before spouting off about what you "see".

It is what you can't see that is the reality.

Fine, then why don't they drop the price as quickly as they raise it...why is the price jump due to market stimuli almost immediate, yet price drops lag for days or weeks or never at all...

The same reason.....if the wholesaler drops his price, he doesn't refund what you have in the ground and either owe for or already paid for.

You have to sell the higher price gas you already bought and then drop your price when you get your next load.

YES, the station owners usually make this work out in their favor, but not always.
Sometime the timing is right for someone to be able to drop prices faster and the free market will take over and force the other guys to drop their price and possibly lose money.

Posted: 8/30/2005 7:03:50 AM EDT

[#22]

Quoted:

Just another example of someone who lacks any knowlage about capitalism and economics.

Well, maybe I just don't have your KNOWLEDGE...enlighten me....I understand capitalism, I practice it myself. You charge what the market can bare...

That is fine...if the oil companies and gas stations want to just come out and say...Hey, we are f*cking you, tough tittie, I can respect that.

But the gas stations blame it on the distributors, distributors blame it on the oil companies, oil companies blame it on hurricanes, the middle east, Chavez, OPEC, the Dems, EPA, blah, blah, blah.

If you want to raise consumer prices immediately after any sort of blip, including the president and CEO of XYZ Oil not taking a solid dump (good of a reason as any), don't use that logic, and expect the thinking public not to question if thats the case why does it then takes weeks to reflect a corresponding drop in prices....

Posted: 8/30/2005 7:09:32 AM EDT

[#23]

Quoted:
Quoted:

Just another example of someone who lacks any knowlage about capitalism and economics.

Well, maybe I just don't have your KNOWLEDGE...enlighten me....I understand capitalism, I practice it myself. You charge what the market can bare...

That is fine...if the oil companies and gas stations want to just come out and say...Hey, we are f*cking you, tough tittie, I can respect that.

But the gas stations blame it on the distributors, distributors blame it on the oil companies, oil companies blame it on hurricanes, the middle east, Chavez, OPEC, the Dems, EPA, blah, blah, blah.

If you want to raise consumer prices immediately after any sort of blip, including the president and CEO of XYZ Oil not taking a solid dump (good of a reason as any), don't use that logic, and expect the thinking public not to question if thats the case why does it then takes weeks to reflect a corresponding drop in prices....

Good gawd man, do you not realize that we had a major blow to the oil production/refinning infastructure? Of course it will increase the prices.

Posted: 8/30/2005 7:11:57 AM EDT

[#24]

Up $0.14 here today. mmk

Posted: 8/30/2005 7:17:56 AM EDT

[#25]

Quoted:

If you want to raise consumer prices immediately after any sort of blip, including the president and CEO of XYZ Oil not taking a solid dump (good of a reason as any), don't use that logic, and expect the thinking public not to question if thats the case why does it then takes weeks to reflect a corresponding drop in prices....

If it was that easy to raise prices no one would EVER go bust in the oil business.

The FACTS are no one has the kind of power you describe, except in your mind and the minds of posters over at DU.

Oil company execs look every morning just like everyone else to see what their products are going for.
They DO NOT say, we are going up on prices today.....like I can and almost everyother business owner can do.

It is demand driving the high price, and along with increased demand come increased profits.
What is wrong with making more money if you are selling more products.

This situation is the what is the very best thing about being an American. Participate in the free enterprise system and get a glass that is half full instead of half empty.

Posted: 8/30/2005 7:18:45 AM EDT

[#26]

Quoted:
Good gawd man, do you not realize that we had a major blow to the oil production/refinning infastructure? Of course it will increase the prices.

As far as I can tell, they haven't been able to determine how bad a blow it is. They haven't been out to check the rigs in the gulf (at least last I saw on the news). I haven't seen any estimates as to the damage to the infrastructure.

I am not saying that I don't understand increasing the price due to damage. I am saying that the big wigs in the oil companies are probably wringing their hands in glee for this opportunity to jack up prices even more, all the while saying "It was God's fault!" And now that the $0.20 a gallon figure increas has been bandied around, they will shoot to raise it $0.30, even if the reality is a $0.10 increase is all that is required.

Hey, its the name of capitalism, they have a commodity that few can do without...lets just be honest, they should come out and say, "Yes, we're f*cking you....because we can, and Daddy needs a new pair of shoes", and not blame God, muslims in the Middle East, commies in Central America, Chinese seeking to enlarge their Walmart production capability, or little green men for all the raising of prices...

Posted: 8/30/2005 7:30:05 AM EDT

[#27]

Quoted:

If it was that easy to raise prices no one would EVER go bust in the oil business.

The FACTS are no one has the kind of power you describe, except in your mind and the minds of posters over at DU.

Oil company execs look every morning just like everyone else to see what their products are going for.
They DO NOT say, we are going up on prices today.....like I can and almost everyother business owner can do.

It is demand driving the high price, and along with increased demand come increased profits.
What is wrong with making more money if you are selling more products.

This situation is the what is the very best thing about being an American. Participate in the free enterprise system and get a glass that is half full instead of half empty.

Like I said, Capitalism at its finest, I can live with that. I do take offense at being compared to any of the pieces of human waste that call DU home....

Just because I am pissed that I can go to bed and wake up to a $0.14 per gallon raise overnight, doesn't mean that I am some socialist scumbag POS. And you can't tell me that demand increased that much overnight to increase a price per gallon $0.14.

Free enterprise...that is what they are participating in, you can't tell me that they aren't out to increase the $$$ in their pockets at any cost. This includes lying to the public as to the why's and wherefores of the dramatic price increases. I am not blaming them for doing it, I just don't have to like it.

Ultimately they will sew the seeds of their own destruction, again, consumers only have so much money to spend...they will either have to spend less in other areas, or spend less on fuels. Either way it hurts the economy eventually....

Posted: 8/30/2005 7:31:28 AM EDT

[#28]

Quoted:

I am saying that the big wigs in the oil companies are probably wringing their hands in glee for this opportunity to jack up prices even more, all the while saying "It was God's fault!"

this is my last resonse to you....

No CEO, business owner, or any other sane person would trade 100's of millions in lost sales for a few cents of price increase.

You have zero concept of sound business practices and have very effectivly proven it.

Posted: 8/30/2005 7:33:51 AM EDT

[#29]

Quoted:
Quoted:

I am saying that the big wigs in the oil companies are probably wringing their hands in glee for this opportunity to jack up prices even more, all the while saying "It was God's fault!"

this is my last resonse to you....

No CEO, business owner, or any other sane person would trade 100's of millions in lost sales for a few cents of price increase.

You have zero concept of sound business practices and have very effectivly proven it.

Yeah, sure, big oil doesn't see this as an opportunity...hey I've got a great bridge to sell you, very historic....

As I said...their business plans don't bother me, the BS and the lies do....

Posted: 8/30/2005 7:35:32 AM EDT

[#30]

Quoted:
Quoted:

If it was that easy to raise prices no one would EVER go bust in the oil business.

The FACTS are no one has the kind of power you describe, except in your mind and the minds of posters over at DU.

Oil company execs look every morning just like everyone else to see what their products are going for.
They DO NOT say, we are going up on prices today.....like I can and almost everyother business owner can do.

It is demand driving the high price, and along with increased demand come increased profits.
What is wrong with making more money if you are selling more products.

This situation is the what is the very best thing about being an American. Participate in the free enterprise system and get a glass that is half full instead of half empty.

Like I said, Capitalism at its finest, I can live with that. I do take offense at being compared to any of the pieces of human waste that call DU home....

Just because I am pissed that I can go to bed and wake up to a $0.14 per gallon raise overnight, doesn't mean that I am some socialist scumbag POS. And you can't tell me that demand increased that much overnight to increase a price per gallon $0.14.

Free enterprise...that is what they are participating in, you can't tell me that they aren't out to increase the $$$ in their pockets at any cost. This includes lying to the public as to the why's and wherefores of the dramatic price increases. I am not blaming them for doing it, I just don't have to like it.

Ultimately they will sew the seeds of their own destruction, again, consumers only have so much money to spend...they will either have to spend less in other areas, or spend less on fuels. Either way it hurts the economy eventually....

No demand didn't rise that much; supply decreased that much. Demand stayed virtually the same, but with a decrease in supply due to the trouble in the Gulf of Mexico, prices went up.

Posted: 8/30/2005 7:48:42 AM EDT

[#31]

Vultures, every one of 'em

Posted: 8/30/2005 8:06:22 AM EDT

[#32]

Quoted:
Quoted:
Quoted:

If it was that easy to raise prices no one would EVER go bust in the oil business.

The FACTS are no one has the kind of power you describe, except in your mind and the minds of posters over at DU.

Oil company execs look every morning just like everyone else to see what their products are going for.
They DO NOT say, we are going up on prices today.....like I can and almost everyother business owner can do.

It is demand driving the high price, and along with increased demand come increased profits.
What is wrong with making more money if you are selling more products.

This situation is the what is the very best thing about being an American. Participate in the free enterprise system and get a glass that is half full instead of half empty.

Like I said, Capitalism at its finest, I can live with that. I do take offense at being compared to any of the pieces of human waste that call DU home....

Just because I am pissed that I can go to bed and wake up to a $0.14 per gallon raise overnight, doesn't mean that I am some socialist scumbag POS. And you can't tell me that demand increased that much overnight to increase a price per gallon $0.14.

Free enterprise...that is what they are participating in, you can't tell me that they aren't out to increase the $$$ in their pockets at any cost. This includes lying to the public as to the why's and wherefores of the dramatic price increases. I am not blaming them for doing it, I just don't have to like it.

Ultimately they will sew the seeds of their own destruction, again, consumers only have so much money to spend...they will either have to spend less in other areas, or spend less on fuels. Either way it hurts the economy eventually....

No demand didn't rise that much; supply decreased that much. Demand stayed virtually the same, but with a decrease in supply due to the trouble in the Gulf of Mexico, prices went up.

Obviously supply has dropped, and will continue to drop as repairs are made and oil imports can't dock at damaged docks.

Also don't forget that MILLIONS of people just bought ALL the gas in many parts of the south so they could FLEE the storm. Things like this: people driving great distances that they otherwise wouldn't have done, tends to INCREASE the demand.

Pretty simple. So simple in fact that I wouldn't expect the typical Arfcom-big-oil-bitcher to understand it.

Posted: 8/30/2005 8:09:53 AM EDT

[#33]

Quoted:

Obviously supply has dropped, and will continue to drop as repairs are made and oil imports can't dock at damaged docks.

Also don't forget that MILLIONS of people just bought ALL the gas in many parts of the south so they could FLEE the storm. Things like this: people driving great distances that they otherwise wouldn't have done, tends to INCREASE the demand.

Pretty simple. So simple in fact that I wouldn't expect the typical Arfcom-big-oil-bitcher to understand it.

Well, I am bitching in general...not ONLY about the current situation...but I was amused by the talk of $0.20 and $0.30 per gallon increases even BEFORE Katrina made landfall...

ETA, Oh and also my original point was the oil industry isn't waiting for anything, they said prices will rise dramatically, and reading between the lines, regardless of the extent of damage....

Posted: 8/30/2005 8:18:06 AM EDT

[#34]

$69.70 a bbl as of now.

BigDozer66

Posted: 8/30/2005 8:21:30 AM EDT

[#35]

Quoted:
ETA, Oh and also my original point was the oil industry isn't waiting for anything, they said prices will rise dramatically, and reading between the lines, regardless of the extent of damage....

How many refineries in SoLA are up and running
right now. How many fuel trucks are driving on
I-10 right now?

They don't need to know whether the derricks
still exist to know that they are not producing
any products and have not for several days.
Just wait for the price spike when they find out
that the refineries will not be at 100% for
weeks or months.

Shouldn't you be breaking windows at a WTO
protest somewhere?

Posted: 8/30/2005 8:28:37 AM EDT

[#36]

Quoted:
$69.70 a bbl as of now.

BigDozer66

Almost to $71 now.

money.cnn.com/2005/08/30/markets/oil.reut/index.htm?cnn=yes

Posted: 8/30/2005 8:46:23 AM EDT

[#37]

Quoted:
Quoted:
ETA, Oh and also my original point was the oil industry isn't waiting for anything, they said prices will rise dramatically, and reading between the lines, regardless of the extent of damage....

How many refineries in SoLA are up and running
right now. How many fuel trucks are driving on
I-10 right now?

They don't need to know whether the derricks
still exist to know that they are not producing
any products and have not for several days.
Just wait for the price spike when they find out
that the refineries will not be at 100% for
weeks or months.

Shouldn't you be breaking windows at a WTO
protest somewhere?

Look, if you LIKE paying more and more every week for gas...more power to you. Knock yourself out.

I (we) have to live with it, I don't have to like it. I happen to think there is quite a bit of gouging going on at all levels. If you disagree, fine, but don't mistake me for a socialist dipshit. I am just sick and tired watching the steady price climb for which they use every possible excuse that comes down the pike to blame it on.

Posted: 8/30/2005 8:47:37 AM EDT

[#38]

2 major ports that supply drilling operations (Venice, La. and most likely Fourchon, La.) are probably underwater and heavily damaged. Venice is definately submerged and most people around here think Fourchon is too, but not much word from there yet.

Looks like I might not be going to work for a while

There will be major logistics problems in getting these rigs (the ones that aren't damaged) up and running again from ports more to the west.

Posted: 8/30/2005 8:58:01 AM EDT

[#39]

Quoted:
I am just sick and tired watching the steady price climb for which they use every possible excuse that comes down the pike to blame it on.

Translation: Don't try to trick me with your
"facts" smarty man.

Posted: 8/30/2005 9:02:47 AM EDT

[#40]

The increase in the price of gas has had little to do with American consumption and supply....

Until NOW!

Posted: 8/30/2005 9:13:16 AM EDT

[#41]

yeah, our refinery capacity was damaged,

how the hell does that have anything to do with how much it costs to pull it out of the ground, hmmm?

if anything the decrease in our refinery capacity should actually reduce crude prices

our demand dropped, period

Posted: 8/30/2005 9:14:31 AM EDT

[#42]

I have noticed most people who bitch about oil companies own a V-8.
Weird.

Posted: 8/30/2005 8:43:34 PM EDT

[#43]

Quoted:
Quoted:
Quoted:
They ain't waitin' for shit....this is the break they've been looking for....the price will be jacked up regardless of actual damage.

They are scumbags who look for any excuse to jack up prices. Hell, if one of them takes an uncomfortable dump, they will use that for an excuse.

And once they get 'em jacked up $0.20...even if there is little actual damage, and they get back up to capacity soon, it will take them three months to drop the price $0.05. They will never get it back all the way down. Its like the government and taxes, once they institute them, they don't get repealed....

You have zero evidense to support this bs.
Supply and demand is the cause of the high and sometimes the low price of crude.
I have never one time heard any person say "Man those oilfield guys are hurting with this $20/ bbl oil. What can we do to help them and their families"

It pisses me off when people moan about the high price of fuel.......if you don't like the damned price quit buying it.

Oh wait.....you don't want to walk. I guess the price isn't too high yet.

The oilfield has ALWAYS had highs and lows, it will be back down. The question is when

The only evidence I have is the anecdotal evidence I have seen over the last few years watching gas prices.

Supply and demand my ass....I am talking about the big petro chem companies here...not the guys working the fields.

I take it you work in the oil industry...explain this. The price of a barrel of oil goes up. Almost immediately it is reflected in the price at the pump. But, conversely, when the price of a barrel drops, it takes weeks to see any corresponding drop at the pump. Not to mention if the wholesaler paid (simplifying to make a point) $2.45 a gallon for whats in his tanks, there is no reason to raise his prices until he buys his next load...but they do.

Now I heard a guy on the radio this morning explaining it as a commodity issue. Like gold. You buy an ounce of gold from a dealer. He may have paid $400 for it when he bought it...but today gold is at $450 an ounce...you pay the $450. All well and good...but if gold was $450 yesterday, and $410 today and you buy today...guess what, you pay $410...

Unlike gas stations, where they paid $2.45 for the gas, but today it is $2.65 a gallon, today you pay $2.65. Tomorrow it drops to $2.60...guess what, you still pay $2.65.

And I like it when oil guys bitch about people bitching about prices. Their answer is always well, if you don't like it, don't buy it. Well, thats just what it will come down to. People will soon not be able to afford it, and they will drastically cut back, and find alternative answers. Then the oil guys will be crying poverty cause no ones buying....People only have so much to spend...spending more on fuel will cause them to spend less on other things, spinning the country into a recession.

Sorry, I see it as big oil screwing people out of as much profit as possible. Explain oil companies raking in record profits while continuously raising prices using any excuse in the book to do it.

I'll second that motion! I've watched and charted the same thing here in my home town for the last several weeks...before that, buy memory!

In a nut shell, raise price .15, lower it by .07. Raise price by .14, lower it by .05. Raise price by .13, lower it by .02. What do you get...a steady climb in price. In this case by .28 cents.

On another note. I had my 35th class reunion a couple weeks ago. One of the class members moved to Tulsa Okla and married into money...Oil and gas money. She said her and her husband our grinning from ear to ear at the price of crude.

That tells me much! Now of course if I had a few wells myself, I suspect I too would be grinning from ear to ear.

Posted: 8/30/2005 9:03:13 PM EDT

[#44]

Quoted:
Quoted:
Quoted:
You don't understand economics of owning a gas station.

The reason gas prices are so quick to change are because of the owners of the stations.

AND THEY HAVE TO DO IT THIS WAY.

If you are gas staion owner and you have 10,000 gallons of gas in the ground that you paid $2. for and you are selling for 2.08.

If the wholesale price goes up to 2.09, when you sell out even though you made money, you can't refill your tanks. You would have to raise your price to $2.17 to make the same amount.

Understand the situation before spouting off about what you "see".

It is what you can't see that is the reality.

Fine, then why don't they drop the price as quickly as they raise it...why is the price jump due to market stimuli almost immediate, yet price drops lag for days or weeks or never at all...

The same reason.....if the wholesaler drops his price, he doesn't refund what you have in the ground and either owe for or already paid for.

You have to sell the higher price gas you already bought and then drop your price when you get your next load.

YES, the station owners usually make this work out in their favor, but not always.
Sometime the timing is right for someone to be able to drop prices faster and the free market will take over and force the other guys to drop their price and possibly lose money.

Give me a break. There is no free market in pricing gas at the station level. Suppliers tell you what to charge. Guess what if you dont charge there price you dont get any gas. Also it is illegal around here to jump price on fuel in the ground for no legitimate reasons. There was some healthy fines levyed on the stations that tried this form of thievery after 9-11. They also had to refund the diffence of the price increase to customers.

Posted: 8/30/2005 9:09:53 PM EDT

[#45]

Originally Posted By copenhagen

Give me a break. There is no free market in pricing gas at the station level. Suppliers tell you what to charge. Guess what if you dont charge there price you dont get any gas.

How many gas stations do you own?
You really should not post things about which you don't have the first clue.
It makes you look silly to people who really do know.

Posted: 8/30/2005 9:13:14 PM EDT

[#46]

How many gas stations do you own?????????? Your knowledge of how this business works sounds like it was read out of a econ 101 book.

Posted: 8/30/2005 9:15:07 PM EDT

[#47]

Quoted:
I have noticed most people who bitch about oil companies own a V-8.
Weird.

... My bitch isn't about the oil companies, hell if I owned huge stock in them I'd want big profit too

... What mystifies me to-no-end is the dead silence on where/how are institution investing in alternative or enhanced performance fossil fuel technologies

... It almost seems big oil has that money in the bag as well - WTF?

Posted: 8/30/2005 9:18:28 PM EDT

[#48]

Quoted:
yeah, our refinery capacity was damaged,

how the hell does that have anything to do with how much it costs to pull it out of the ground, hmmm?

if anything the decrease in our refinery capacity should actually reduce crude prices

our demand dropped, period

+1

I can see where the price at the pump will increase, because supply is down and people still want it. But why does a barrel of oil go up in price, when there will be less demand? Less refineries, less forced consumption. Meaning less oil being shipped to America.

So why the increase in the price of a barrel of oil? Sounds like taking advantage to me. But then I am not an economics genius. So why the increase?

Posted: 8/30/2005 9:25:50 PM EDT

[#49]

Quoted:
How many gas stations do you own?????????? Your knowledge of how this business works sounds like it was read out of a econ 101 book.

While I don't currently own a C-store,( this may change shortly) I have lots of friends who do own them now or have in the past.

Plus I spent 12 years working for Coca-Cola dealing with the owners and managers of C-store's and gas stations daily.

TRUST ME.......you could not be more wrong.

For YOUR lesson of the day.....the only stores I have ever seen that the owners could not price their fuel as they saw fit, were stores that were leased from the gas supplier.
Typically this set up was done with the lease holders not buying the fuel and only got a couple of cents per gallon cut of the retail price.
This setup didn't work very well and has just about been eliminated here in East Texas.

How's that for an Econo 101 class?

Posted: 8/30/2005 9:27:31 PM EDT

[#50]

I can see where the price at the pump will increase, because supply is down and people still want it. But why does a barrel of oil go up in price, when there will be less demand? Less refineries, less forced consumption. Meaning less oil being shipped to America.

So why the increase in the price of a barrel of oil? Sounds like taking advantage to me. But then I am not an economics genius. So why the increase?

At least the Saudis are doing every thing they can to try to help us.

{"Farhad, do you see what those Americans are paying for crude right now? We'll never be able to make this much off them again, quick, sell them all we have before the price goes down!}

[ARCHIVED THREAD] - Oil markets await details of hurricane impact (Page 1 of 2)

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