Corpusfishing.com

[Big John]

Oil prices and gasoline prices end the week at record highs, despite the following energy report:

U.S. gasoline inventories rose by 2.4 million barrels to 205.1 million barrels.

Refinery utilization rose 1.4 percentage points to 90.2 percent of capacity, increasing gasoline production by 323,000 bpd to nearly 9 million bpd.

Average gasoline demand over the past four weeks fell 0.1 percent from a year ago to 9.14 million bpd.

Crude stocks rose unexpectedly by 300,000 barrels to 347 million barrels, their highest in almost eight years.

OPEC will ship 520,000 bpd more oil in the four weeks to May 27 to 24.78 million bpd, said Roy Mason of consulting group Oil Movements. (thats an extra 15 million barrels - get top dollar while you can, right?)

"The major surge in exports showing up are because long-haul sailings from the Gulf will be arriving in the third quarter when crude runs peak during the summer driving season," Mason told Reuters.

FROM REUTERS online


This seems ridiculous. We have more oil and gasoline inventories than we have had in 8 years! 8 years ago, gasoline was less than a $1 a gallon! This is really ticking me off! This is not following supply and demand patterns anymore, and it is really starting to stink of market manipulation.
_________________
GOBZA!!!
Save $$$ - Get Coupons local businesses today! - http://www.gobza.com/29472

[txag05]

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2006-05-10T190203Z_01_SP137660_RTRUKOC_0_US-MARKETS-OIL.xml

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2006-05-10T153126Z_01_N10436037_RTRUKOC_0_US-MARKETS-ENERGY-NYMEX.xml

"The U.S. Energy Information Administration said gasoline inventories rose by 2.4 million barrels last week to 205.1 million barrels and were just above the lower end of the average range for this time of year."

"Problems at Valero's Texas City, Texas, refinery and ConocoPhillips' Bayway plant in New Jersey pushed oil prices into positive ground after prices fell when weekly U.S. inventory data showed a build in gasoline inventories last week."

The problem is that Iran is faking that they have a nuke program to drive up oil prices so they can make $$$ so they can afford to buy a nuke program.....

[rabbit]

A scam is a scam and no matter how many excuses you make its still a scam.
_________________
Fishing and Kayaking its a rough life but somebody has to do it.

[Big Sherm]

I'm sorry but you have to look South for the problem. I know Iran runs their mouth to make money but Mex. is the number exporter of oil to this country. Any clue where the nearest middle east counrty? is ranked 7th. with Saudi Arabia. Look I hate the gas prices, but what are our elected officials going to do about(pass more gas taxes or cut the taxes and raise the property and school taxes). I heard Trent Lott 2 weeks ago actually say the truth " He said "the blame should go to the polititions and Oil companies. The political persuasion that shall not be mentioned won't pass bills to drill in Alaska or build new refineries, yet the Republicans are supported by the Oil companies. And why is it when a barrel of oil rises by $3 in a day gas prices go up $.20 that night?"
Say what you want but it's a locked market and the oil co.'s and Pol.'s are all in it together. We rely on oil so much that they can bend us over and there's really nothing we can do about it. California has tried Propane trucks before and the US Gov. came in and said in order to have a Propane driven vehicle you have to pay $800+ a year for the permit(yet it burns cleaner more efficiently and maint. is cheaper), and they are giving drilling in Alaska more thought and publicity than ehtanol, why because GW says "well we can't use it all because I like to eat it(corn)"

Sorry for the rant but I'm just as sick as ya'll are about this #$%!

[Twiztedrods]

All of our fishing trips are more expensive...but at leaste I live here and it is kinda cheap ...just kiddin Big John. You are gonna have to make it to one of our BBQs or Fishing Adventures...it will be worth the gas money.
_________________
Proud Founding Member of the Port A Holes

[BaitBoy]

I STILL hold the view that Chinese investment in their infrastucture build-up, Iranian atomic technology fears, Nigerian civil unrest (search MEND in Nigeria on the web,) Hugo Chavez' solidification deal with Bolivia, Venezuela (his country where he just in that last 3 days forced nationalization of oil production - I'm not even going to try to explain that here, find out for yourself,) and Cuba, and a few more such international events cause the oil market traders to bid up the prices of the spot market.

You've got the internet, search it out for yourself. Watch the spot market prices on an hourly basis for yourself. If you want to beat the price of gas then involve yourself in the trading market for petroleaum. You will soon find yourself worrying about the possibility of every international action having an adverse effect on market prices and your best bet as such an investor is to put your 'buy' options in as quick as you can to lock in your price at the lowest level possible. The oil companies just benefit by that transaction you just pulled off if they hedged their bets and invested their research and exploratory dollars wisely and are able to produce at a price per barrel lower than your bid.

Oz, with your education in the industry, or any of you financial field educated wizards refute my assumptions?

[Big John]

Baitboy, glad you bring that up.

I have an MBA in Finance, taught Macro, Micro and Political economics for 4 1/2 years at UTSA, and worked as a financial Advisor for UBS Paine Webber in Corpus Christi, as my last job, and my father's family all made their money in oil in the 70's and 80's before the market collapsed the first time around, and we still talk oil alot.

On a simple supply versus demand scale, our supply exceeds the demand, that is why we can build inventories - ie, invneotries are higher than they have been for 8 years. When you have more supply than demand it is called a surplus situation. In this case it is being stored. When there is a surplus ,all thing being equal and laissez-faire with no market manipulations, the price of the rpoduct should decline. So why has the price of oil just hit an all time new high?

market risks. These same market risks have always been there. We have dealt with OPEC strangling supply before. We have long dealt with the irregularities of foreign governemnts "repatrioting" our oil company's assets. We have dealt with wars before.

The problems at the refineries is that we cannot produce enough gasoline? When is the last tiem you saw a story about a city running out of gas? Has the Tiger Market on SPID ever been closed due to no gasoline? Even if that were the case, the price of oil, the raw material, should fall. If we can't process it any faster, then how is demand increasing? It makes no sense.

The largest problem, if you talk to old school industry analysts is the number of specualtors trading in the market. There used to be an excess of contracts of 10% in the 90's ( the number of contracts more than what was needed to conduct actual business between producers, refiners, and retailers. However, that had jumped from 10% to 400% before I left being a broker in October. Too many people trading. So, you start getting "herd mentallity" like in the stock market. Everyone one runs the same way. So far it has been mostly up. However, the last time oil was really hot and there was an excess of contracts was in the mid-80's. there was a 200% excess then, Remember what happened then. The price of oil was artificially being held up, and when it started dropping, it fell back to the single digits per barrel. It wasn't the hot sector after that, so most moved on to the next hot thing.

Even then, you would still be hard pressed to get the jumps in oil we have had given how the market works. Changes in supply would demonstrate equally step changes. In other words, the price of gas at the pumps would fall as quickly after spring break as it raises the week before it. Gas would plummet in price at the pumps the day after Memorial day. But they don't. I have never seen gas go down 25 cents in a day, but I sure as heck have seen it jump that high overnight. It takes weeks for the price to come down part of the way back down from a weekend price hike. Smells of market manipulation and price fixing.

When inventories are at an 8 year high and oil is at a record high price, while year over year demand is down, it makes no sense, unless someone is helping it along.
_________________
GOBZA!!!
Save $$$ - Get Coupons local businesses today! - http://www.gobza.com/29472

[BaitBoy]

That' is exactly what I am talking about:

"Too many people trading. So, you start getting "herd mentallity" like in the stock market. Everyone one runs the same way. So far it has been mostly up. However, the last time oil was really hot and there was an excess of contracts was in the mid-80's. there was a 200% excess then, Remember what happened then. The price of oil was artificially being held up, and when it started dropping, it fell back to the single digits per barrel. It wasn't the hot sector after that, so most moved on to the next hot thing."

It moved to real estate. Now, it is heading back, or should I say, it IS back, in oil.

I was in there. through the heart of the build-up in the late 70s through early 80s made a killing then, too. Understand the bidness completely.

Now, I am in the Defense bidness and have quite a perspective that most don't have, and probably digest the international input somewhat differently than most folks do. Wish I could invest based on what I do understand but 'wouldn't be prudent' to do so. It is all still market driven, but market driven takes on more colors than it used to based on what I extracted as your quote from above.

We will have the ability to discuss this more when we are down there come July on our vacation.

[txag05]

i'm still not sure where you're gettin that we're @ 8 year highs....that reuters report said we're on the low side of the average for this time of year.....

have any references?

[Big John]

The first part with the facts and figures is a direct quote from Reuters online. I added the bolding of some important text and the total additional amount of barrels coming from the Saudis.

I wish I could find the link, but becuase there are more than 500 hundred new stories every day on Reuters, it just makes it impossible.

However, there are new stories today talking about how the IEA and our own domestic people have reduced the forecasts for oil by huge amounts. Oil has fallen a little bit, but not alot, and not enough. There is another interesting sotry about how ethanol blending requirements are helping reduce gasoline demand and inreasing corn prices.


And about foreign demand for Baitboy,

China has consistently been blamed, as their growth continues as supersonic speeds. However, their actual demand for oil and gas are constantly below the forecasts, and by a large amount, becuase they are investing huge amounts to build their domestic supplies. Granted they still pull alot of oil, but not nearly as much as has been feared.

And you are right, I think the industry is right were it was in the early 80's and we will soon have a popping of the bubble. When we do, be prepared for the whole stock market to tank for a little while, but then recover quickly under lower energy prices.
_________________
GOBZA!!!
Save $$$ - Get Coupons local businesses today! - http://www.gobza.com/29472

[Mudflap]

The cost of what a gallon of gas costs isn't determined by what they paid for it, but what it will cost for them to replace it. That is why when you see the price go up for the cost of a barrel, it goes up immediately at the pump. Until the cost of a barrel goes down, it doesn't matter what the inventories are in this country. The price of a barrel is determined on the world market and since we import 60% of our oil... If you have a 55 gallon barrel of oil and it costs you $70. Thats $1.27 before you have done anything with it. Throw in the 50 to 60cents a gallon tax, cost of refinement, transportation, marketing. Funny thing is the oil companies only make 7% profit on a gallon. Take that away and a three dollar a gallon is now $2.79. The solution is to tell the politicians to quit listening to the whacko movement and develop our sources. For those of you that talk about ethanol, bio-deisel or whatever, what do you think will happen later when it is 'Big Ethanol'?

[OIL FIELD TRASH]

>>>>>If you have a 55 gallon barrel of oil and it costs you $70. Thats $1.27 before you have done anything with it. Throw in the 50 to 60cents a gallon tax, cost of refinement, transportation, marketing. Funny thing is the oil companies only make 7% profit on a gallon. Take that away and a three dollar a gallon is now $2.79. The solution is to tell the politicians to quit listening to the whacko movement and develop our sources. For those of you that talk about ethanol, bio-deisel or whatever, what do you think will happen later when it is 'Big Ethanol'?<<<<<<


It's actually worse than that. A "legal" barrel of oil is 42 gallons, so @ $70 a barrel you're at $1.67 per gallon... if you consider that most oil has 1-2% sediment and water, it's a little more than that. Like you said, you have to weigh the costs of producing the oil, transportation to the refinery, refining process, additives per distributer, transportation to the gas station, profit for the gas station, and finally taxes.

To tell you the truth, the BIG profiteer in gasoline is the federal government!!

[Bwanablue]

OFT, not just the feds. Federal tax is 18.4 cents per gallon. State tax is 20 cents per gallon. State severance tax is 4.6% of sales price per barrel or 32.2 cents at $70 oil for a total of 73.2 cents or 24.4% of a $3.00 gal. It dwarfs any profit percentages anywhere in the production, distribution or sales chain.
_________________
If at first you don't succeed, neither have I.

[crab_n_fisher]

Wow, Big John!

My step-dad has been stationed all over the world, from Iran (he was escorted out by troops before the Shah's 1979 uprising), Kuwait, Quatar, Greece, Austrailia, Indonesia, Mayra Jayra, and for years on the North Slope of Alaska, all the way to St. Croix, to god-knows-where-else in the oil field in his 37 year career. He holds opinions very much like you and your family! .... Momma claims she was forced out of business in 1986, from her last jewelry store, due to oil prices as well -- for many of her customers were from the industry.

I never knew you taught college....That is neat..... My dad studied at Purdue, and taught from 1968-1977 for the Texas Ed/UA Apprentice Program!....

Thank you for your "most excellent" insight. I'll send it to Pops. You never know, he may want me to chime in with a post of his, to congratulate not only you, but your shared wisdom of the family! ....

[WD-40]

Gas consumers are paying for the Bush administrations
war. The money has to come from somewhere,
Can't just say we are raising taxes to pay for the war.
We will pay for the war with higher gas prices.
And it was funny as hell when he said there will be
an investigation to price manipulation. Cheney has
little boy Bush right in his pocket on this one.
Short Rope,
Tall Tree.
_________________
noketcham noeatem