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Gasoline production is ahead of projections and demand is down in the US.

First, an admission. In addition to being a player of horses, I am also in the retail gasoline business.

With that said, I can speak only to the demand in the Houston market. It is not only up, it is way the hell up. We are wearing out our pumps trying to meet that demand.

As for production being ahead of projections, I find that hard to believe since we have built not one single new refinery in this country in the past 28 years. Our existing refineries are, and have been for quite some time, running at over 95% of their capacity.

One last admission before I go. My price for regular unleaded went from $1.68 to $1.75 this morning. Why? Demand! My supply cost was up a bit also, but it was far south of a 7 cent increase. My gallons of gasoline sold for the first eight hours of business today was not down one iota as a result of the price increase.

God, I love capitalism. But before anyone rips into me with a vengeance, let me add that my beloved capitalistic society has afforded me the opportunity to bleed like a stuck hog on many occasions also. Such is life.

I would actually make an argument here that tightening up the margin requirements at the Chicago Merc might get some of the rampant speculation out of the market so that the primary buyers of oil contracts are actually oil consumers, not Marc Rich and George Soros. These oil prices are not being caused by anything actually happening in the world, they are being caused by speculation about what MIGHT happen in the world. And the tighter the market, the wilder the swings in price. While this would likely not affect HORSEPLAYER much, it could get some of the middlemen out and remove the fat from this price.

But it is also about 33% our fault for not building any new refinery or drilling capacity. You can't have 1M SUV's being sold and no new production or refining. This is like California and the electrical problem 2 years ago - an incredibly tight market and no surplus capacity allows any one big player to screw everybody down the pipeline. And I would bet my life that if you could start subpeona'ing some of the major contract buyers, you would find some shady, shady people and some illegal market manipulations.

I'm all for free markets but I'm for transparent markets and this one is as murky as a crawfish pond.

>As for production being ahead of projections, I find that hard to believe since we have built not one single new refinery in this country in the past 28 years. Our existing refineries are, and have been for quite some time, running at over 95% of their capacity.<

I seem to remember a couple of refineries were down for several months in late spring and early summer.I remember hearing in the last week that gasoline purchases were lower than projected this summer but i do not have source.

I grew up in my father's service station back when we had gas wars at $.25 per gallon.My dad always said we would get a price war about 10 days after a snow storm up north.(Need to keep pipeline moving.)

I have been a vender to "C stores for 20 years and understand the margin problem fully.You guys need to get the margins up where you can buy and sell more candy for me.