Original Gas Thread: Americans enjoying $4 gallon despite oil oversupply highest in 8 yrs

[GoPackGo]

Originally posted by: conjur

Originally posted by: GoPackGo

Originally posted by: Engineer

Originally posted by: GoPackGo

Originally posted by: Engineer
20 oil rigs missing per US Coast Guard. WOW!

my guess is that you will see drilling opened up in Alaska and elsewhere.
I also guess that there WILL be more oil refineries built regardless of what the envirowhackos have to say.

Drilling in Alaska: Yes. It will take a decade or more before anything comes of it, but it's time to open up the pipe.

More Refineries: Depends. If Big Oil feels that oil will be on the decline in the near future, there is no need to do so. If they feel that they can recoup their investment and then some, it will happen. Tough one to call.

I don't know how long it will take to build a refinery, but the government may actually mandate one. There is still alot of oil in the US, espcially in texas.

But is it the right grade for cheap refining into gasoline?

dont know...but refineries can be made to refine all types of oil...perhaps its time to look into new technologies...this is a rare chance to institute change for the better....the question is will we do it.

 

[zephyrprime]

Originally posted by: Jadow
arizona is a dumb place for a refinery, isn't it landlocked? Refinerys need to be near a seaport.

I could be wrong but I don't think oil travels a long distance after it's refined. Aren't refineries simply placed near their target markets?

 

[Trevelyan]

I live in Pensacola, FL... long lines for all the gas stations that still actually have gas left.

 

[charrison]

Originally posted by: Engineer

Originally posted by: GoPackGo

Originally posted by: Engineer
20 oil rigs missing per US Coast Guard. WOW!

my guess is that you will see drilling opened up in Alaska and elsewhere.
I also guess that there WILL be more oil refineries built regardless of what the envirowhackos have to say.

Drilling in Alaska: Yes. It will take a decade or more before anything comes of it, but it's time to open up the pipe.

More Refineries: Depends. If Big Oil feels that oil will be on the decline in the near future, there is no need to do so. If they feel that they can recoup their investment and then some, it will happen. Tough one to call.

You will still need refinaries for coal to liquids...

 

[charrison]

Originally posted by: conjur

Originally posted by: GoPackGo

Originally posted by: Engineer

Originally posted by: GoPackGo

Originally posted by: Engineer
20 oil rigs missing per US Coast Guard. WOW!

my guess is that you will see drilling opened up in Alaska and elsewhere.
I also guess that there WILL be more oil refineries built regardless of what the envirowhackos have to say.

Drilling in Alaska: Yes. It will take a decade or more before anything comes of it, but it's time to open up the pipe.

More Refineries: Depends. If Big Oil feels that oil will be on the decline in the near future, there is no need to do so. If they feel that they can recoup their investment and then some, it will happen. Tough one to call.

I don't know how long it will take to build a refinery, but the government may actually mandate one. There is still alot of oil in the US, espcially in texas.

But is it the right grade for cheap refining into gasoline?

West Texas intermediate crude is traded

 

[0marTheZealot]

Building a refinery takes years. Same with oil rigs, drilling etc etc. They do not happen in a weekly basis.

Most oil companies acknowledge that 85-90mbd is about the maximum global output will ever be. This is why no new refineries have been built.

 

[PCMerlin]

Originally posted by: Rainsford
I just had a thought...are the oil companies TRYING to cause a panic? Surely they don't operate on the kind of buget where selling at a loss for a few days would hurt them in the long run, yet gas in my area has gone up $0.30 per gallon just today. That kind of rapid rise is exactly what causes people to panic, and it doesn't seem necessary for the prices to rise like that. Why do it?

I do believe this could be more true than most people would want to imagine. Gas here (for the stations that still have gas in the Raleigh, NC area) went up well over $0.51 from $2.48 at the cheaper stations to $2.99 last night and today and likely to go up higher as they realize they're one of the few with gas still left.
Back to your statement, though. All the executives at the oil companies have already lined thier pockets with more than enough cash to weather out anything the economy may do here. What's more is that they have likely tied a lot of that cash up into foreign investments, whose value would skyrocket should anything major happen to the economy here. Something to think about for sure.

 

[charrison]

A possible reason for the shortages....

Take the example of 1972, and we will use typical numbers of that era. Lets say there were 100 million cars each with an average 20 gallon tank. Lets say normally, people refill their tank when it is ¼ full, so on average their tank is 5/8 full. Doing the math, there are 5/8 times 20 times 100 million gallons actually in cars or about 1,250 million gallons. That's right - one of the largest single inventories of gas in this country is in people's tanks.

Now, lets say due to supply panic, everyone suddenly refills at ¾ full. No one wants to be caught short (I remember in the 1970's, people would wait in line to put a gallon or two in their tanks -- it was nuts). In this case, on average they are 7/8 full or there are a total of 1750 Million gallons in cars' tanks. So, in the space of what might be two or three days, people suddenly demand 500 million gallons above and beyond their normal usage to increase their tank's inventory. Boom, stations are out of gas, which causes people to feel even less secure without a full tank, so they inventory more (many in spare gas cans) and the problem gets worse.

linkage

 

[Mill]

Originally posted by: charrison
A possible reason for the shortages....

Take the example of 1972, and we will use typical numbers of that era. Lets say there were 100 million cars each with an average 20 gallon tank. Lets say normally, people refill their tank when it is ¼ full, so on average their tank is 5/8 full. Doing the math, there are 5/8 times 20 times 100 million gallons actually in cars or about 1,250 million gallons. That's right - one of the largest single inventories of gas in this country is in people's tanks.

Now, lets say due to supply panic, everyone suddenly refills at ¾ full. No one wants to be caught short (I remember in the 1970's, people would wait in line to put a gallon or two in their tanks -- it was nuts). In this case, on average they are 7/8 full or there are a total of 1750 Million gallons in cars' tanks. So, in the space of what might be two or three days, people suddenly demand 500 million gallons above and beyond their normal usage to increase their tank's inventory. Boom, stations are out of gas, which causes people to feel even less secure without a full tank, so they inventory more (many in spare gas cans) and the problem gets worse.

linkage

Absolutely with a doubt the exact thing that is occurring.

 

[charrison]

linkage

Colonial Pipeline today announced that it is safely restarting its pipeline. The initial restart of Colonial's Main lines 1 and 2 is scheduled to begin within the next several hours.

Initial service restoration will provide between 25% and 35% of Colonial's normal operating capacity. Both gasoline and distillate service is included in this system restart. Colonial's first priority through all of these restart activities is the protection of public safety and the environment.

Following this baseline restoration of partial service, Colonial will continue with the previously announced installation of distributed generation equipment along its system in Louisiana and Mississippi to provide electric power. This power will allow Colonial to gradually increase the rate of throughput on the system throughout the weekend.

Colonial anticipates that the maximum percentage of normal capacity that these interim measures will provide is between 50% and 60%. Colonial continues to work closely with local electrical utilities as they begin to restore power along the pipeline.

Colonial Pipeline, headquartered in Alpharetta, Ga., delivers a daily average of 100 million gallons of gasoline, home heating oil, aviation fuel and other refined petroleum products to communities and businesses throughout South and the Eastern United States. Colonial consists of more than 5,500 miles of pipeline, originating at Houston, Texas, and terminating at the New York harbor.

 

[imported_tss4]

Originally posted by: Jadow

The private companies have tried for YEARS to build more refineries, but fricken state and local governments keep blocking it because enviro whackos have taken over and they don't want a refinery in their town.

OK, if no one else will, I'm going to have to call "BS" on this. In my experience its not the enviro wackos that have the clout to stop anything. Its the middle class, upper middle class, and rich that do it. We all want more refineries but if you try to build one in our back yard that's going to affect our land value and our air or water quality, then every demcrat, independent and REPUBLICAN family in the area will be against you. The enviro wackos are the ones on TV, but its every one else that actually stops it from happening.

 

[conjur]

Shortage looms if jet-fuel disruption not fixed soon
http://www.usatoday.com/money/biztravel/2005-08-31-katrina-jetfuel-usat_x.htm

Major airports in the East and Southeast could run out of jet fuel as soon as next week if refinery and pipeline shutdowns aren't resolved soon.

Shortages appear most severe at airports in Charlotte, Tampa, Orlando and Fort Myers, Fla. But two of the USA's busiest airports could also be affected ? Atlanta's Hartsfield-Jackson and Washington Dulles.

Industry consultant John Armbrust says the supply disruption could cause some airports to run out of fuel in a week or two. John Heimlich, chief economist at the airline trade group Air Transport Association, says two weeks is more realistic.

"By then, we'd better have this problem rectified or we'll have a serious problem," Heimlich says.

 

[Icepick]

Bush states "zero tolerance" of price gouging at the gas pumps.

This is the smartest thing Bush has said since this crisis began.
http://money.cnn.com/2005/09/01/news/bush_gas.reut/index.htm?cnn=yes

I hope the federal and local governments actually follow through and severely punish or drive out of business the criminals who are price gouging and reaping enormous profits in this time of strife.

 

[catnap1972]

Originally posted by: tss4

Originally posted by: Jadow

The private companies have tried for YEARS to build more refineries, but fricken state and local governments keep blocking it because enviro whackos have taken over and they don't want a refinery in their town.

OK, if no one else will, I'm going to have to call "BS" on this. In my experience its not the enviro wackos that have the clout to stop anything. Its the middle class, upper middle class, and rich that do it. We all want more refineries but if you try to build one in our back yard that's going to affect our land value and our air or water quality, then every demcrat, independent and REPUBLICAN family in the area will be against you. The enviro wackos are the ones on TV, but its every one else that actually stops it from happening.

I take it that as a kind gesture, Jadow will donate his property in order for the oil companies to have space to build a refinery on.

(crickets chirping)

???

 

[catnap1972]

Originally posted by: icepik
Bush states "zero tolerance" of price gouging at the gas pumps.

This is the smartest thing Bush has said since this crisis began.
http://money.cnn.com/2005/09/01/news/bush_gas.reut/index.htm?cnn=yes

I hope the federal and local governments actually follow through and severely punish or drive out of business the criminals who are price gouging and reaping enormous profits in this time of strife.

Another empty promise...anything that is done (and I imagine it will be little or nothing) will take place on the state level.

We've seen "investigations" at the federal level time and time again "turn up" nothing...this will be no different.

 

[FuzzyBee]

Originally posted by: dmcowen674
Southeast U.S. out of gas

Captain Hyperbole is at it again!!!!

Dave - where, exactly, does that article say that the "Southeast U.S. [is] out of gas"?

 

[umbrella39]

Originally posted by: catnap1972

Originally posted by: icepik
Bush states "zero tolerance" of price gouging at the gas pumps.

This is the smartest thing Bush has said since this crisis began.
http://money.cnn.com/2005/09/01/news/bush_gas.reut/index.htm?cnn=yes

I hope the federal and local governments actually follow through and severely punish or drive out of business the criminals who are price gouging and reaping enormous profits in this time of strife.

Another empty promise...anything that is done (and I imagine it will be little or nothing) will take place on the state level.

We've seen "investigations" at the federal level time and time again "turn up" nothing...this will be no different.

Agreed. I got an email back this morning from the AG of Michigan and he confirmed my suspicion that there is really nothing they can do to prove price gouging is occuring. They are free to charge whatever they wish.

I think the easiest way to "prove" that they were in fact gouging he is the fact that the price went up .75 cents as the storm was hitting the coast. I am pretty sure, but I have a strong feeling that did not make the gas that was already sitting in their tanks underground more expensive. But what do I know.

 

[dmcowen674]

Originally posted by: FuzzyBee

Originally posted by: dmcowen674
Southeast U.S. out of gas

Captain Hyperbole is at it again!!!!

Dave - where, exactly, does that article say that the "Southeast U.S. [is] out of gas"?

I know from personal experience. I am staying with a Gas Station owner.

There are no tanker trucks coming.

The Military has access to the supply but the general population does not.

 

[FuzzyBee]

Originally posted by: dmcowen674

Originally posted by: FuzzyBee

Originally posted by: dmcowen674
Southeast U.S. out of gas

Captain Hyperbole is at it again!!!!

Dave - where, exactly, does that article say that the "Southeast U.S. [is] out of gas"?

I know from personal experience. I am staying with a Gas Station owner.

There are no tanker trucks coming.

The Military has access to the supply but the general population does not.

So - there is *No gas in the Sutheast*, or is there no gas at the station owned by the guy that's putting you up?

Just so you know:

hy·per·bo·le Audio pronunciation of "hyperbole" ( P ) Pronunciation Key (h-pûrb-l)
n.

A figure of speech in which exaggeration is used for emphasis or effect, as in I could sleep for a year or Southeast U.S. out of gas.

 

[Freejack2]

Anyone actually seeing prices much below $3?
On my drive in this morning pretty much everyone was within a penny of $3. Only exception was one station that was at $3.319.

 

[conjur]

We're about the same price as California. $3.19 here, $3.29 in So. Ind. and $3.25-$3.29 in California

 

[1EZduzit]

Originally posted by: tss4

Originally posted by: Jadow

The private companies have tried for YEARS to build more refineries, but fricken state and local governments keep blocking it because enviro whackos have taken over and they don't want a refinery in their town.

OK, if no one else will, I'm going to have to call "BS" on this. In my experience its not the enviro wackos that have the clout to stop anything. Its the middle class, upper middle class, and rich that do it. We all want more refineries but if you try to build one in our back yard that's going to affect our land value and our air or water quality, then every demcrat, independent and REPUBLICAN family in the area will be against you. The enviro wackos are the ones on TV, but its every one else that actually stops it from happening.

That is so true. The same thing applies to atomic energy plants, everybody thinks we need them, just not very close to where they live.

I live out here in the boonies and I would support an atomic energy plant being built here if they could tie it in with a refinery being built somewhere near the coast. The energy from the nuclear palnt could be sent to whoever/wherever they are kind enough to let a refinery be built.

Of course we would want some of that cheap electricity for our area also.

 

[Engineer]

Economic confidence survey falls to 2 year low as gas prices/hurricane scare the population.

Thursday September 01, 2005 --As the aftermath of Hurricane Katrina continues to devastate New Orleans and surrounding areas, America's economic confidence has fallen to its lowest level in two years.

The Rasmussen Consumer Index fell five points on Thursday to 97.6. This is the first time the Index has fallen below the 100.0 mark since October 3, 2003 and is the lowest reading since September 11, 2003. The Index measures the economic confidence of American consumers on a daily basis.

The baseline for the Rasmussen Consumer Index was established at 100.0 in October 2001. The current level of 97.6 means that current levels of economic confidence are lower than they were in the aftermath of the 9-11 terrorist attacks.

That's says quite a bit right there!

 

[Gamingphreek]

Ok, i haven't been reading this thread.

Can some explain to me if gas prices will ever drop to a reasonable price again (Im only a Senior in HS). Also, aside from losing the refineries in New Orleans, what is causing prices to go up.

As i am a HS student and taking 5 AP classes i can only work 15 hours a week. This is almost taking my entire salary just to fill up on gas ('92 Toyota 4x4).

I live in Fredericksburg VA, and i jumped into Wawa before they changed the price. Everyone around them had just finished jumping to $3.30, i got in a $2.99.

-Kevin

 

[dcaron]

Originally posted by: rahvin
It was interesting a couple weeks ago when the media started reporting the prices of the oil futures as if they were the actual price of oil. Dave's blanket acceptance that somehow the future's price and the actual price being one in the same is an indication of the reason the media is doing what they are doing.

For the record, commodity futures are one of the most volitle and risky investments in the market and can have absolutely no indication of future prices or even current prices. The market is speculating on future supply dissruptions, something that could or could not happen. This speculation and the price of futures has NO impact on the price of gas you pay at the pump and will have no impact unless the events the market is trying to predict actually occur.

Maybe they 'shouldn't' have an effect (if what you are saying is correct), but I think that they do. The fact is that the owners of the gas stations that we buy gas from see the same news we do, and they often raise their prices based on this news. Thats how they know when the right time to gouge is.