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U.S. Oil Production Keeps Rising Beyond the Forecasts
nytimes ^ | JAN. 24, 2014 | FLOYD NORRIS

Posted on 01/24/2014 9:25:04 PM PST by ckilmer

OIL production in the United States rose by a record 992,000 barrels a day in 2013, the International Energy Agency estimated this week.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy
KEYWORDS: frackingoil; oil; oilproduction

OIL production in the United States rose by a record 992,000 barrels a day in 2013, the International Energy Agency estimated this week.

“We keep raising our forecasts, and we keep underestimating production,” said Lejla Alic, a Paris-based analyst with the agency.

The increase left United States production at 7.5 million barrels a day, with both November and December production estimated to have been over eight million barrels a day.

American consumption of oil also rose last year, by 390,000 barrels a day, or 2.1 percent, to 18.9 million barrels a day. The agency increased its estimate of American oil use in the final quarter of the year, although it lowered its estimate of the increase in some other countries, including China. Over all, world consumption rose 1.4 percent, making 2013 the first year since 1999 that the use of oil in the United States rose more rapidly than in the rest of the world.

The agency said that demand was strong in the petrochemical industry in the United States, which has benefited from the fact that rising supply has left American crude oil prices lower than those in many other countries. The agency estimated that demand for gasoline in the United States rose as a result of increasing consumer confidence and more sales of sport utility vehicles.

American Oil Production Leaps

United States crude oil production

 

Despite the 2013 increases, oil use in most developed countries remains well below the levels of 2007, the last pre-recession year. The United States is estimated to have used 8.5 percent less oil in 2013 than it did in 2007, while demand is down by about 25 percent in Italy and Spain, European countries that were hard hit by the euro area’s problems. Germany stands out, with 2013 usage equal to that of 2007.

In the developing world, oil use has been rising steadily. Demand in China and Brazil is up more than 30 percent since 2007, and India’s consumption is 17 percent higher.

The agency estimates that in 2014, the 34 mostly rich countries in the Organization for Economic Cooperation and Development will consume less than half the oil used in the world. That would be a first: As recently as 2004, their share was over 60 percent, and in 2013, it was estimated to be 50.5 percent.

Over the same period, the United States’ share of the market fell to 21 percent from 25 percent, while China’s share rose to 11 percent from less than 8 percent. But the American share was estimated to have risen slightly in 2013, the first annual increase since 1999.

The increase in United States production in 2013 exceeded the increase of 836,000 barrels a day in 2012. The largest increase before that, of 751,000 barrels, was in 1951, according to the United States Energy Information Administration.

In percentage terms, the 15.3 percent increase in 2013 was the largest since an 18.9 percent gain in 1940.

American oil production fell steadily from the early 1990s through 2008, but has since risen for five consecutive years, largely because of increased production of shale oil. Not since the late 1960s, when production in Texas was peaking and Alaska oil was beginning to come on stream, has there been such a string of annual increases.

As a result, United States oil production climbed to the highest level since 1989, although it remains well below the record production of 9.6 million barrels a day, set in 1970.

The agency forecast that American production would continue to rise in 2014, adding 782,000 barrels, to 8.3 million barrels a day.

If that forecast proves to be accurate, United States oil production will have increased 46 percent over the three years from 2011 to 2014. There has not been a three-year increase that large since the years 1921-24, exactly nine decades earlier.

1 posted on 01/24/2014 9:25:05 PM PST by ckilmer
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To: thackney

you have to click on the NY Times article to see the graphs properly.


2 posted on 01/24/2014 9:26:35 PM PST by ckilmer
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To: ckilmer

OMG, we’re goin’ to be saved from Bammy.


3 posted on 01/24/2014 9:30:58 PM PST by Paladin2
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To: ckilmer

We would climb right out of the present recessional blues if we build the necessary pipelines and approve the attendant refineries required.

Monkeys throwing darts would be an improvement over the current regime.

“Recovery” is obviously not the goal of the obama cabal...


4 posted on 01/24/2014 9:34:43 PM PST by One Name (Ultimately, the TRUTH is a razor's edge and no man can sit astride it.)
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To: ckilmer

I can see an executive order in the offing that will stop all this potential economic fuel freedom.


5 posted on 01/24/2014 9:35:07 PM PST by doc1019
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To: ckilmer

So why wont the price of gasoline drop?


6 posted on 01/24/2014 9:38:18 PM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: mylife
So why wont the price of gasoline drop?

There isn't enough light crude refining capacity, as I understand it.

7 posted on 01/24/2014 9:53:41 PM PST by Kennard
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To: Kennard

No, they (we) are exporting gasoline, and we are paying the global market price.

I want a big discount...like a buck.


8 posted on 01/24/2014 9:58:51 PM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ckilmer
"...agency estimated that demand for gasoline in the United States rose as a result of increasing consumer confidence..."

Sounds like he's huffing gasoline.

9 posted on 01/24/2014 9:59:51 PM PST by 2ndDivisionVet (Jealousy is when you count someone else's blessings instead of your own.)
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To: mylife; Kennard

There’s plenty of refining capacity. However, despite the rise in production in the USA supply and demand worldwide are pretty well balanced. According to the EIA in the USA alone—oil consumption rose for the first time by “380,000 bbl/d (2.1%) in 2013” But demand also rose elsewhere around the world.
http://www.eia.gov/forecasts/steo/report/us_oil.cfm
Now production increased by almost a million barrels a day. But the extra crude just meant that overseas oil that normally is shipped to the USA for refining,,,,—was sent elsewhere. Typically the USA will refine oil into gasoline and other products and then sell overseas what’s not sold at home. There is no ban on selling refined petroleum products abroad...just the crude.


10 posted on 01/24/2014 10:03:01 PM PST by ckilmer
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To: 2ndDivisionVet
"...agency estimated that demand for gasoline in the United States rose as a result of increasing consumer confidence..."

Sounds like he's huffing gasoline.


Yep. Lead based too.
11 posted on 01/24/2014 10:21:23 PM PST by PA Engineer (Liberate America from the Occupation Media.)
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To: ckilmer
There’s plenty of refining capacity. However, despite the rise in production in the USA supply and demand worldwide are pretty well balanced.

Yes, gasoline moves with Brent, not WTI. But there is a light sweet crude refinery capacity issue, which will get progressively more severe as tight oil production hopefully increases over the next few years. Were it not for the capacity constraint, or if the federal government permits crude exports, practically speaking to nearby Mexican or Latin American refineries, gasoline production would increase by several millions of barrels per day. Lower transportation costs would then impact gasoline prices.

This is what got me thinking about refinery capacity and gasoline prices.

12 posted on 01/24/2014 11:48:54 PM PST by Kennard
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To: One Name
Monkeys throwing darts would be an improvement over the current regime.

Left strictly to the realm of probability, the Administration would make the right decisions some of the time. The absence of such indicates either very consistent stupidity or malignant behaviour.

13 posted on 01/24/2014 11:49:33 PM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: ckilmer

I’m not sure how this happened. When Sarah Palin said “Drill, baby, drill,” the far left, including NYT, assured us that it would take more than a decade for new oil to come on line. How did we get new oil so quickly just by drilling?


14 posted on 01/25/2014 3:08:18 AM PST by Pollster1 ("Shall not be infringed" is unambiguous.)
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To: One Name
We would climb right out of the present recessional blues if we build the necessary pipelines and approve the attendant refineries required.

We still need to complete some pipelines but the US already refines more product than we use. We do not have a refinery shortage.

15 posted on 01/25/2014 6:15:50 AM PST by thackney (life is fragile, handle with prayer)
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To: ckilmer
There is no ban on selling refined petroleum products abroad...just the crude.

There should be.

16 posted on 01/25/2014 6:56:42 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER
I want a big discount...like a buck.

Michelle Bachman promised gas under $2 if she became President. That was a promise that would have been met.

17 posted on 01/25/2014 7:01:38 AM PST by Balding_Eagle (Over production, one of the top 5 worries for the American Farmer every year.)
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To: ROCKLOBSTER
I want a big discount...like a buck.

The regime is committed to reducing the use of carbon based fuels and driving the populace toward (more easily controlled) public transit.

18 posted on 01/25/2014 7:05:11 AM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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To: mylife
So why wont the price of gasoline drop?

Because global demand for crude oil has risen with the increases in global supply.

Image and video hosting by TinyPic

19 posted on 01/25/2014 7:06:51 AM PST by thackney (life is fragile, handle with prayer)
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To: ROCKLOBSTER
There is no ban on selling refined petroleum products abroad...just the crude.

There should be.

Which would mean the end of any surplus refining capacity in the US, closing of more US refineries, investment put into other countries and not the US.

Loss of jobs, worse trade balance, does that really sound like a good idea?

Now we import more crude oil than we need, sell the surplus products at a higher price than we paid for the crude oil.

The is more to economics than just the demand curve. Put more artificial barriers on the industry and you will diminish the supply.

20 posted on 01/25/2014 7:11:54 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

Seems like gas has been stuck at $3.05 for donkeys years despite market fluctuations.


21 posted on 01/25/2014 7:13:57 AM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: nascarnation

We need to slash or kill the corporate income tax, and impose an export duty on petroleum products.


22 posted on 01/25/2014 7:15:32 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: mylife

Can you say EPA and Sierra Club and all the other wacko enviromentalists that lobby to cut our throats in DC.


23 posted on 01/25/2014 7:16:53 AM PST by Busko (The only thing that is certain is that nothing is certain.)
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To: thackney

Do you really think $3.50/gallon gasoline is acceptable?

If we have such a surplus of gas in the US, it should cost less. Charge the offshore bastards more.

We owe them nothing.


24 posted on 01/25/2014 7:23:43 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER

Why do investors in oil companies owe you a price discounted below the market rate?

Is that the type of company you invest in for your retirement? Why do you think of those resources they paid for belonging to you? Why should my minerial lease and investment give you a discount?


25 posted on 01/25/2014 7:25:20 AM PST by thackney (life is fragile, handle with prayer)
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To: ROCKLOBSTER

I will say this...if gas was $1.50 a gallon, every illegal with a hooptie would be cruising 24/7.

There is some value in limiting the mobility of the lower echelons of society, LOL.


26 posted on 01/25/2014 7:25:55 AM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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To: Busko

Sierra club is one of the biggest shams around.
One of their favorite gigs is to complain that people are having to much fun with public land.
Buy a bit of adjacent land then file a complaint about the public land being abused.

Play the watermelon complaints in court using the watermelon philosophy and get that public land protected from the PUBLIC.

Then they file a case saying that the Goobermint can not restrict the from egress and regress to their property.

Voila!
Now The sierra clubbers essentially have annexed great swaths of land that only they may use and they don’t pay taxes on it.

WE DO.


27 posted on 01/25/2014 7:28:12 AM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: thackney

Feels like we are getting made accustom to higher prices despite unprecedented output.


28 posted on 01/25/2014 7:32:26 AM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: thackney
Why do investors in oil companies owe you a price discounted below the market rate?

1) Because the world hates the US and screws us a million times over in "free and fair trade".

2) Because cheap energy is what has traditionally made the US economy outperform all others.

3) Because they could creatively design it themselves without coersion if they wanted to. Maybe even increasing profit.

Is that the type of company you invest in for your retirement?

I don't know, is there one?

Why do you think of those resources they paid for belonging to you?

In many cases, those leased mineral rights are a birthright that belongs to the American people and with your plan, are being virtually given away to our enemies.

Why should my minerial lease and investment give you a discount?

So you fully believe the current fuel prices in this depression are acceptable. You seem to be one of those responsible for the continued gouging of the US public.

Ska-rew the "global economy" why the hell would we want ourselves weakened and them strengthened? It's gotten horribly that way already.

29 posted on 01/25/2014 7:45:54 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: mylife

Not just output, the demand is just as high. Like it or not, oil is a global commodity. Even with our relatively high production, we still import nearly half the oil that runs through our refineries.


30 posted on 01/25/2014 7:53:38 AM PST by thackney (life is fragile, handle with prayer)
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To: ROCKLOBSTER

You have an entitlement attitude no different than a welfare queen.

Those oil reserves are owned by other people. Those oil companies are owned by investors, most of that mutual funds and other retirement type accounts. THEY do not owe you anything.


31 posted on 01/25/2014 7:55:36 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

We refine more oil than anyone.
Seems like we should set the price.

Ol Hugo Chavez hated us and smelled the sulfur when GWB was in the room.

Venezuela’s oil is heavy sulfur crude.
They cant refine it.
We do.

At any rate, I do understand that it is a world market.


32 posted on 01/25/2014 8:00:51 AM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: thackney

All this time I defended the oil companies saying “They don’t set prices, it’s determined by the speculators” “The government is the culprit here, they are doing everything they can to screw up the energy sector”

Now, it appears, you have yanked the rug out from under those positions.

You didn’t deny that $3.50 gas is a burden to the average worker. In fact, it’s just hunky-dory with you....isn’t it.

I don’t have to tell you that those fuel prices are reflected in everything that is transported, manufactured or kept warm.

Thanks for the prolonged depression.


33 posted on 01/25/2014 8:07:29 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: mylife

We refine more oil than anyone.
Seems like we should set the price.

And we should sell it below market rates? Is that how you value your labor and investments?

- - - - - -

Venezuela’s oil is heavy sulfur crude.
They cant refine it.
We do.

Most of venezuela’s oil is refined outside the US.

http://www.eia.gov/countries/analysisbriefs/Venezuela/images/crude_oil_exports.png

http://www.eia.gov/countries/cab.cfm?fips=VE


34 posted on 01/25/2014 8:11:22 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

It’s also true that US gasoline usage has gone down....DUH! Usage is down because people can’t afford it, and the economy is stagnant.

To what benefit? The green weenies?

There’s also the concept of profit due to volume, not just price. The lower the cost, the more you sell. And you don’t have to ship it as far.


35 posted on 01/25/2014 8:12:35 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER

Again, I understand you don’t like the fuel prices.

But tell me why those owners need to sell to you discounted prices any different than the owners of steel, gold, corn, wheat, electricity, etc...

You want other people to invest and take the risks while you reap the rewards. The energy sources of this country are great because we reward the individuals that risk and invest.

You are promoting a communist view that we should take from the wealth of others to give to you.


36 posted on 01/25/2014 8:14:36 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

I defer to your expertise, but no we should not sell below market value.

I only question why the cost of gasoline has stayed at the $3 mark despite boons in output.


37 posted on 01/25/2014 8:18:04 AM PST by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: thackney
You are promoting a communist view that we should take from the wealth of others to give to you.

No, I'm not...and that's twice you've insulted me bitch.

If OPEC can hold back production to drive up the global price of crude, why can't we do the same with fuel?

You want other people to invest and take the risks while you reap the rewards.

US consumers have been unwillingly "investing" since 2008 and guess who's been reaping the rewards....go ahead, we're waiting.

There has to be a private sector formula that helps both the US economy and the domestic producers. Some numbers wizard could easily figure this out.

The same thing has been practiced by the pharmaceutical companies, they give their product to socialist countries and charge the crap out of us here.

It should be the other way around.

38 posted on 01/25/2014 8:24:38 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER
US consumers have been unwillingly "investing" since 2008 and guess who's been reaping the rewards....go ahead, we're waiting.

And unlike the fatass nosepicking speculators, we actually take possession of our "investments"...something else that desperately needs to be changed.

39 posted on 01/25/2014 8:49:50 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER
If OPEC can hold back production to drive up the global price of crude, why can't we do the same with fuel?

The U.S., as well, is reducing the global supply of crude by prohibiting crude exports. We are therefore increasing the international price of crude (Brent) and decreasing the domestic price of crude (WTI). Yet the U.S. does not restrict the export of gasoline and other refined products, so U.S. businesses must pay a higher international price for gasoline while domestic producers of crude are penalized with a lower price for their product. We are thereby discouraging domestic exploration and production and discouraging domestic business activity, while giving a bigger crack spread to domestic refineries. If that isn't bad enough, domestic refineries, in the absence of an adequate supply of domestic light sweet crude, have been refitted, at enormous cost, to handle foreign (Canadian and Venezuelan, etc.) heavy sour crude. Now that tight oil production has increased the supply of light sweet crude, refineries lack the capacity to refine that light crude, so the U.S. export prohibition threatens to limit tight oil production. How will several million barrels a day of forecast additional light crude production be refined if it cannot be exported?

With the impact of the heavy hand of government in the export prohibition now clear, what is the linkage to domestic gasoline prices, which are theoretically an international market? If the export restriction was removed, then over the next few years, the U.S., with domestic production increases, might export say, three million barrels per day of crude oil. Other things being equal, that would decrease the international price of crude. That would decrease the international price of gasoline. Also, because the additional supply of gasoline would be relatively local, as in Canada, Mexico, etc., lower transportation costs would dictate that U.S. gasoline prices would be lower again: lower than gasoline prices elsewhere.

So I take exception to your being accused of not supporting the free market. It is your accusers who are hiding behind a government restriction on free market activity in the form of the crude export prohibition.

40 posted on 01/25/2014 10:26:45 AM PST by Kennard
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To: Kennard

Thank you both for that detailed explanation and for coming to my defense.

I was wondering what happens when everyone in the world starts utilizing our current fracking and horizontal drilling practices, and the global market is awash in all kinds of crude.


41 posted on 01/25/2014 11:28:48 AM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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To: ROCKLOBSTER
I was wondering what happens when everyone in the world starts utilizing our current fracking and horizontal drilling practices, and the global market is awash in all kinds of crude.

For sake of discussion, what will happen is that crude prices will drop to around $75, below which most tight oil & gas E&P doesn't pay.

42 posted on 01/25/2014 12:00:18 PM PST by Kennard
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To: ROCKLOBSTER
No, I'm not...and that's twice you've insulted me bitch.

I am sorry you feel insulted by my words. What actions I thought you were suggesting seemed to fit that. Perhaps I misunderstand what you are suggesting actually be done to correct the problem you see. If you could explain what specific actions you suggest taking, we could have a more reasoned discussion.

If OPEC can hold back production to drive up the global price of crude, why can't we do the same with fuel?

Now I am confused even more. I thought you wanted to lower prices, not raise them.

US consumers have been unwillingly "investing" since 2008 and guess who's been reaping the rewards....go ahead, we're waiting.

I greatly disagree, there has been massive US investment in the production from our shale fields and associated work with that production. It is why the demand for experienced hands in those fields has shot up very high along with the work hours and wages.

There has to be a private sector formula that helps both the US economy and the domestic producers. Some numbers wizard could easily figure this out.

If you could be more descriptive of what you think should happen, it would help. Because of the relatively high prices, we have had large investments in domestic production and climbing production rates.

In post #8 you said your reduction in gasoline price should be a buck. That is $42 a barrel. The means gasoline selling for less than the price of oil used to make, the transportation pipelines, refineries, distributors all working for a loss?

In post #16, you said we should ban exporting refined products. That means shutting down refineries, loss of jobs, loss of refinery capacity and more money paid to imports from other nations while they build up the refineries.

It is action like those you suggested that drove my descriptions. If you are just complaining and expecting magic to happen, then we can stop our discussion.

The same thing has been practiced by the pharmaceutical companies, they give their product to socialist countries and charge the crap out of us here.

Perhaps if we started by exporting our lawyers and politians that make doing business so expensive and difficult in the US...

43 posted on 01/25/2014 3:05:04 PM PST by thackney (life is fragile, handle with prayer)
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To: Kennard
So I take exception to your being accused of not supporting the free market. It is your accusers who are hiding behind a government restriction on free market activity in the form of the crude export prohibition.

If you are speaking of me, I have never supported the crude oil export. In reality, if eliminated, it would have little effect in exports, as we are still the largest importer. But it would give the producers more confidence to invest in more production without creating the situation of the late 90's on the west coast.

44 posted on 01/25/2014 3:08:38 PM PST by thackney (life is fragile, handle with prayer)
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To: Kennard

Sorry I left out a rather important word.

I have never supported the crude oil export BAN.


45 posted on 01/25/2014 5:15:59 PM PST by thackney (life is fragile, handle with prayer)
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To: thackney
I am sorry you feel insulted by my words.

A non-apology apology if I ever saw one. I'm sorry that I'm so thin-skinned that terms like welfare queen and Communist raise my hackles.

I thought you wanted to lower prices, not raise them.

I do, it's just that I don't care about "global" prices, only lower domestic prices. Just like they don't care what we have to pay when we are at their mercy. OPEC has been using us wrong for quite a while, and funding terrorists to boot.

there has been massive US investment in the production from our shale fields and associated work with that production. It is why the demand for experienced hands in those fields has shot up very high along with the work hours and wages.

Yeah yeah yeah...that's all very good. Production is up markedly. But gas prices have not come down "markedly". Wages have not gone up overall and millions are unemployed. Businesses can not afford to operate. Looking at the the real unemployment numbers, the shrunken workforce numbers, and the millions more on welfare...we're in a depression.

There is a surplus of motor fuels, but instead of domestic supply/demand driving down the prices...it gets exported.

So US consumers helped fund the R&D, and get stuck with the perpetual shaft. The yardstick is, how much gas can you buy for an hour's work compared to even 10 years ago.

If you could be more descriptive of what you think should happen, it would help.

C'mon, you charge them more, charge us less...even if it's only a few cents...no government required. If we are or become a major producer, we should be able to rule the roost on world prices.

In post #8 you said your reduction in gasoline price should be a buck. That is $42 a barrel. The means gasoline selling for less than the price of oil used to make

I'm familiar with the relationship of crude to gas, however, it hasn't been an honest straight line, gas went down some, then the "global price" kicked in. Don't like it.

you said we should ban exporting refined products. That means shutting down refineries, loss of jobs, loss of refinery capacity and more money paid to imports from other nations while they build up the refineries.

OK, that's an extreme description, and it may not have to happen as you laid it out. Certainly a short term domestic fuel-glut would help gin up the economy, and should "the globe" quickly catch up with their own application of modern extraction techniques and new refineries, "the globe" would be in a lot better shape economically. Of course that would be a massive timing issue, and need to be based on a reversible domestic policy.

I just fail to understand why it is up to us to ease their burden when we are in an economic death spiral.

Hey I'm not the professional here, nor an economic Einstein, but I know expensive fuel is absolutely killing us.

Perhaps if we started by exporting our lawyers and politians that make doing business so expensive and difficult in the US...

Nobody can disagree with that.

46 posted on 01/25/2014 5:41:53 PM PST by ROCKLOBSTER (Celebrate "Republicans Freed the Slaves" Month.)
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