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To: thackney

A few questions if you care to offer an opinion.

Do we have a shortage of available crude today?

Do we have refinery capacity to increase output production? If so, by how much?

Who sets the price of crude?

What is the average supply/storage of crude onhand at any given time? Where would additional supply be stored?

As I see it if there isn’t a shortage of available crude or a shortage of supply of refined product on hand then additional supplies aren’t going to get refined or into the market place. As long as the market is an open market then the speculators will drive the price. What are we going to do with all the reserves in the US? Set a price on what it can be sold for and require it be used only for product in the US?


35 posted on 04/26/2011 12:22:20 PM PDT by deport
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To: deport
Do we have a shortage of available crude today?

At current prices? No. Try to price it at $20 and you will have a heck of a shortage. Supply and demand are curves based on price, not a fixed amount.

Do we have refinery capacity to increase output production? If so, by how much?

Do you mean capacity to increase domestic oil production? Sure! We could nearly triple our domestic oil production before reaching our current refinery capacity. We would substitute that imported oil with our domestic oil if we reached that amount.

Who sets the price of crude?

The market. Most oil is not bought and sold over the NY stock exchange. Most oil used in refineries is long term contracts.

What is the average supply/storage of crude onhand at any given time?

The US, outside of the strategic reserve, typically has 20~30 day supply in commercial stocks.

http://eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_VSD_NUS_DAYS&f=W

Where would additional supply be stored?

What additional supply? If we increase domestic production, as we have slightly the last couple years, we would reduce imports, as we have.

http://eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A

http://eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMUS2&f=A

As long as the market is an open market then the speculators will drive the price.

If you believe it is only speculation driving market prices, why is the spot market, which requires taking immediate delivery of the oil bought, at nearly the same price?

36 posted on 04/26/2011 12:40:45 PM PDT by thackney (life is fragile, handle with prayer (biblein90days.org))
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