Posted on 03/15/2012 6:01:03 AM PDT by SeekAndFind
Just last week Bloomberg had an article the US oil companies have exported a record barrels of refined gasoline. Highest level in history. Why not keep it here and flood the system-would that not lower our prices?? And why are we exporting Alaskan oil?? Help me out here if I am wrong.
I'm not an expert here but I think the oil industry does not want low gas prices.
We also live in a global economy now with developing countries needing a increased supply each year and if the the worlds economy rebounds it will get even worse.
First of all, that $147 for oil lasted for a couple hours on a futures exchange, very little if any oil ever went to a refinery at that price.
Secondly, since 2008, we have had a growing glut in Cushing, OK where the WTI is delivered for the NYSE price of oil. In mid 2008, the WTI was at a premium over most of the oil going to most of our refineries. So the average oil price the refineries were paying in July 2008 was $129, not $147.
U.S. Crude Oil Composite Acquisition Cost by Refiners
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=R0000____3&f=M
Today, the spot market (oil delivered for cash within days, the "now" price":
Louisiana sweet, St. James = $127.23
Alaska North Slope, Pacific delivery = $121.53
http://online.wsj.com/mdc/public/page/2_3023-cashprices.html?mod=topnav_2_3000
Brent (imported light sweet from UK) = $123.99
WTI Cushing Spot = $105.93
http://www.bloomberg.com/energy/
So most of the oil going to our refineries is near the price back in summer 2008.
Thirdly, with the declining dollar, it has gotten a bit more expensive to refine the crude to products.
Who is to say it will not be exported?
The oil we get from the Alaskan pipeline is exported to other countries. I'm not sure the oil industry wants low prices. See my post #41. I think they will lower it down to a level the American public finds tolerable, and that is the best we can hope for.
Try and explain Natural Gas to the people whose votes really run Nooyawk State, the Third Worlders and their enmployers of NYC.
Refinery capacity has finally exceeded demand, a combination of years of expansion and upgrades, combined with a falling US demand.
Refineries will not continue to produce more than is bought. It is a fungible global product and it is not going to be priced lower than the difference of transportation cost to the next market.
Right now, we are importing some extra crude oil, refining it and selling the surplus on the global market. That keeps us with some surplus refining capacity, more jobs and a better trade balance.
And why are we exporting Alaskan oil??
We don't. Until 1996 it was illegal to export Alaskan oil. By that time we reached such a glut on the Pacific West Coast, Alaskan Oil was at ~25% discount to Texas. Alaskan North Slope work was falling fast.
They allowed export at that time and for the next few years about 5% was exported. By 2000, the West Coast demand had reached the West Coast production and the exportation, small as it was stopped on its own.
It is ~1,200 miles to the Washington Refineries. It is about double that the most southern California refineries. It is triple that distance to Tokyo. Nobody is exporting Alaskan Oil to Asia when there is a large importing demand already on our West Coast.
"Snide" fits you well.
Approving Keystone and opening up drilling in the Gulf and Alaska will impact future supply, and cause a decrease in current prices.
Government should not control gas prices, one way or the other.
Not True.
It is far more likely that Newt’s energy policy will lead to $2.50 gas than Obamacare will lower healthcare costs. Or that ANY of the Marxist’s economic plans will stimulate growth.
For more information proving where Alaskan Oil Goes:
http://www.freerepublic.com/focus/f-news/2695708/posts?page=9#9
(Also more info farther down that same thread)
I'm not sure the oil industry wants low prices.
I don't know of any private industry that wants low prices for their products. Do you?
It really does not matter if we increase production for export. The increase adds to supply. And, it tends to keep other suppliers in line. Is there some special reason why we must pay the Worthy Oriental Gentlemen of the Middle East $150/barrel for a commodity that costs them $3.50 max to produce?
Another reason to increase Domestic Production? Threat value. Between US, Canada, Mexico, and the rest of Latin America, we need Muslim oil like we need a sick camel on the lawn.
Step (1) Absolutely shut down, close, mine, and arm the Mexican Border
(2)In exchange for babysitting, feeding, and incarcerating the 20 million or so illegal Mexican population that is now here, the Mexican Government turns over its inefficient, corrupt, and just plain dumb oil production to the American companies from whom they stole it in the first place.
(3)We lock in a price of $35-50/barrel
(4)If Chico and the Man don't go for the deal, start deporting Mexicans.
(5)Finish the Spanish-American War and annex Cuba as a Commonwealth like Puerto Rico (which is what the more intelligent among the Cubans wanted anyway) and its oil.
(6)Revive the Monroe Doctrine in regard to this hemisphere and especially in regard to the CHICOM.
(7.) The cornerstone of my policy:Shoot 10 environmentalists a week
Thanks. I was thinking it was.
Crude oil production in the United States dropped every year in the last 5 years of the Bush presidency. The only reason gas prices crashed in 2008 was the global financial crisis, which greatly lowered demand.
But won't OPEC just decrease production if the price drops due to exportation from the US?
PS, Thackney-thanks for the info on the other post.
They can, and they are beyond our control.
But if they do decrease production, it means more dollars and jobs for us. It also means less dollars and jobs for them.
There is a limit to how much some could cut back. I don't think Iran or Venezuela could handle hardly any cuts at all. If it meant a break-up of OPEC for lack of member control, that's an even bigger win.
You can also reduce demand by having more trucks converted to dual-fuel (diesel or Liquified Natural Gas). Crude oil is currently eight times as expensive as natural gas on an energy-equivalent basis. The problem is a lack of LNG fueling stations along major highways. Take just some of the money we're pissing away subsidizing electric cars and get a few truck stops along I-95 to supply LNG and we could start a big change in transportation energy consumption.
I wonder how the author feels about the specious promises Obama and the Left keep making. If they kept 10% of their promises, the country would be a paradise. I still remember folks gleefully talking about how, with Obama as President, they wouldn't have to fill their gas tanks. Now, many of them can't afford to fill their gas tanks.
Besides, Newt's promise isn't specious - it can be achieved with sensible energy policy and the disolution of the EPA...
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