Fan in Chicago Posted September 22, 2005 Share Posted September 22, 2005 Apart from the human and property destruction that this Cat 5 hurricane may cause, let me pre-warn everyone here about another disastrous effect. Most people are already worried that gas prices may be affected if the hurricane really hits the Houston area. But I don't know if anyone understands the magnitude. Katrina hit an area where about 10-15% of crude oil is processed into gasoline etc. The Gulf coast capacity is about 40% of the national total !!! Imagine if refineries get hit there. I would venture $4-$5 gasoline if the worst happens. Also, there are oil and gas platforms there in the sea which, if idled, will severely damage the crude and natural gas supply for months. Ofcourse if the refineries are down also, you won't need that much crude oil. But, in summary, be warned of an impending calamity for transportation fuels for much of this year. Link to comment Share on other sites More sharing options...
KD in CA Posted September 22, 2005 Share Posted September 22, 2005 bummer.... I guess I'll fill the tank tomorrow. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted September 22, 2005 Author Share Posted September 22, 2005 bummer.... I guess I'll fill the tank tomorrow. 450079[/snapback] That may save you a few bucks this week, but the combined effect of Katrina and Rita will continue to cause supply disruptions through the end of the year. Link to comment Share on other sites More sharing options...
sweet baboo Posted September 22, 2005 Share Posted September 22, 2005 ummm...can someone explain this to me http://finance.yahoo.com/q/bc?s=XOM&t=3m http://finance.yahoo.com/q/bc?s=BP&t=3m http://finance.yahoo.com/q/bc?s=CVX&t=3m CNN and others speculated that gas would be $4 a gallon after Katrina, so the oil companies knew they could get away with raising the price so that it would sell at 3.30 a gallon and people would think that a crisis was averted. Right now, there are people all over reading and hearing about this possible hike in prices and trying to figure out how high this speculation will allow them to make the actual price. The oil market right now seems to be driven by speculation and, when CNN publishes articles like this and oil companies are making record profits, I have to wonder where the media's allegience lies. Link to comment Share on other sites More sharing options...
KD in CA Posted September 22, 2005 Share Posted September 22, 2005 That may save you a few bucks this week, but the combined effect of Katrina and Rita will continue to cause supply disruptions through the end of the year. 450321[/snapback] I'm sure. Heating costs this winter will be horrendous. Link to comment Share on other sites More sharing options...
Cheeseburger_in_paradise Posted September 22, 2005 Share Posted September 22, 2005 I'm sure. Heating costs this winter will be horrendous. 450623[/snapback] Let the Yankees freeze in the dark. Just kidding Link to comment Share on other sites More sharing options...
stuckincincy Posted September 22, 2005 Share Posted September 22, 2005 Let the Yankees freeze in the dark. Just kidding 450634[/snapback] OK, no more Ohio corn for you and your hogs... Link to comment Share on other sites More sharing options...
TheMadCap Posted September 22, 2005 Share Posted September 22, 2005 ummm...can someone explain this to me http://finance.yahoo.com/q/bc?s=XOM&t=3m http://finance.yahoo.com/q/bc?s=BP&t=3m http://finance.yahoo.com/q/bc?s=CVX&t=3m CNN and others speculated that gas would be $4 a gallon after Katrina, so the oil companies knew they could get away with raising the price so that it would sell at 3.30 a gallon and people would think that a crisis was averted. Right now, there are people all over reading and hearing about this possible hike in prices and trying to figure out how high this speculation will allow them to make the actual price. The oil market right now seems to be driven by speculation and, when CNN publishes articles like this and oil companies are making record profits, I have to wonder where the media's allegience lies. 450585[/snapback] I can't help but agree with you here. I think that the media is doing us a disservice by pounding this idea down our throats. If nothing else, it would temp oil companies to gouge prices as much as they can. I wonder why it is that our gov't won't put a bit more pressure on them in light of their record profit gain this past year? Link to comment Share on other sites More sharing options...
Campy Posted September 22, 2005 Share Posted September 22, 2005 If nothing else, it would temp oil companies to gouge prices as much as they can. 450813[/snapback] Oil companies might be price gouging? Say it ain't so! [/sarcasm] Link to comment Share on other sites More sharing options...
Alaska Darin Posted September 22, 2005 Share Posted September 22, 2005 I can't help but agree with you here. I think that the media is doing us a disservice by pounding this idea down our throats. If nothing else, it would temp oil companies to gouge prices as much as they can. I wonder why it is that our gov't won't put a bit more pressure on them in light of their record profit gain this past year? 450813[/snapback] I can't imagine why the Republicans wouldn't do that? [/sarcasm] Link to comment Share on other sites More sharing options...
stuckincincy Posted September 22, 2005 Share Posted September 22, 2005 Some oil analyst on CNN said the "Explorer" pipeline that transfers finished product from the TX refineries north through OK, MO, ILL and IND has been shut down today. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted September 22, 2005 Author Share Posted September 22, 2005 The oil market right now seems to be driven by speculation and, when CNN publishes articles like this and oil companies are making record profits, I have to wonder where the media's allegience lies. 450585[/snapback] Let me try an analogy - a tad weak but let us see if it works. Say you are one of three network admins hired in the early 90s by a company in the middle of Iceland, where no computer jock wants to go work. Over the years, the company did very well and kept increasing the size and complexity of the network. Software got upgraded and you three did well to keep up. In the late 90s, one of the three left and you two were left to handle duties but it was okay as your productivity increased. Come 2004, Microsoft started major upgrades to their systems and you two started working 14-16 hours a day compared to 12 hours before. You are taxed, start falling sick but keep working hard anyway. Come 2005, company gets a huge new contract and network traffic continued to increase along with demands on your time. Now in summer, the other programmer gets cancer and goes on a 3 month treatment while also using all the vacation he never took. You are the only one left. You go to your boss and ask to be paid twice as much. he has to pay you as he has no other option. in a nutshell that is what is happening. Network = gasoline demand, network administrators = refineries, cancer = katrina/rita (sorry), you = oil company It is supply/demand dude. Please don't equate it to gouging as the reason you ask for the double pay is to compensate for the 16 hours you are putting in and the fact that the boss does not have a choice. Link to comment Share on other sites More sharing options...
meazza Posted September 23, 2005 Share Posted September 23, 2005 Let me try an analogy - a tad weak but let us see if it works.Say you are one of three network admins hired in the early 90s by a company in the middle of Iceland, where no computer jock wants to go work. Over the years, the company did very well and kept increasing the size and complexity of the network. Software got upgraded and you three did well to keep up. In the late 90s, one of the three left and you two were left to handle duties but it was okay as your productivity increased. Come 2004, Microsoft started major upgrades to their systems and you two started working 14-16 hours a day compared to 12 hours before. You are taxed, start falling sick but keep working hard anyway. Come 2005, company gets a huge new contract and network traffic continued to increase along with demands on your time. Now in summer, the other programmer gets cancer and goes on a 3 month treatment while also using all the vacation he never took. You are the only one left. You go to your boss and ask to be paid twice as much. he has to pay you as he has no other option. in a nutshell that is what is happening. Network = gasoline demand, network administrators = refineries, cancer = katrina/rita (sorry), you = oil company It is supply/demand dude. Please don't equate it to gouging as the reason you ask for the double pay is to compensate for the 16 hours you are putting in and the fact that the boss does not have a choice. 450884[/snapback] the effect of hurricane rita hasnt shut down anything until now, probably today, so then the effect of the hike in gas prices should be felt by sunday, monday as that is when companies buy their from the oil that is pumped and refined thursday friday saturday... what i wanna know is, there were several parts of ontario and quebec that had gas at 2.00$ + a litre which is like the equivalent of about 7-8$ a gallon... thats gauging Link to comment Share on other sites More sharing options...
Fan in Chicago Posted September 23, 2005 Author Share Posted September 23, 2005 the effect of hurricane rita hasnt shut down anything until now, probably today, so then the effect of the hike in gas prices should be felt by sunday, monday as that is when companies buy their from the oil that is pumped and refined thursday friday saturday...what i wanna know is, there were several parts of ontario and quebec that had gas at 2.00$ + a litre which is like the equivalent of about 7-8$ a gallon... thats gauging 451164[/snapback] Pipelines carrying products out of the gulf states started shutting down on Wednesday, largest refinery shut down Thursday morning. Also, it is possible people are panic buying causing a sudden spike in demand prior to the actual supply crunch. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted September 23, 2005 Author Share Posted September 23, 2005 Pipelines carrying products out of the gulf states started shutting down on Wednesday, largest refinery shut down Thursday morning. Also, it is possible people are panic buying causing a sudden spike in demand prior to the actual supply crunch. 451373[/snapback] Egads - that was my post # 666. Maybe I am helping the devil after all with posts like this that support the oil industry Link to comment Share on other sites More sharing options...
stuckincincy Posted September 23, 2005 Share Posted September 23, 2005 Egads - that was my post # 666. Maybe I am helping the devil after all with posts like this that support the oil industry 451376[/snapback] In economist Thorstein Veblen's 1904 text, "Theory of The Business Enterprise", he noted that the oil industry is more or less the favorite whipping boy of the press and politicians and the general public, to be blamed whenever socially or politically expedient. And Veblen was no friend of the oil industry. Link to comment Share on other sites More sharing options...
finknottle Posted September 25, 2005 Share Posted September 25, 2005 I can't help but agree with you here. I think that the media is doing us a disservice by pounding this idea down our throats. If nothing else, it would temp oil companies to gouge prices as much as they can. I wonder why it is that our gov't won't put a bit more pressure on them in light of their record profit gain this past year? 450813[/snapback] Can somebody give me an argument as to why oil companies shouldn't be allowed the charge what the market will bare? Why are they different from other businesses? Link to comment Share on other sites More sharing options...
Cheeseburger_in_paradise Posted September 25, 2005 Share Posted September 25, 2005 Can somebody give me an argument as to why oil companies shouldn't be allowed the charge what the market will bare? Why are they different from other businesses? 452845[/snapback] I'll try. Barriers to entry in the industry. Not just any one can start up an oil company and become dominent by offering a better product or a lower price. Oil companies are not monopolies exactly. Because they positioned themselves way back when, I think they operate more like oligarchies, like a part of government that's controled by only a few. I guess the politics of the situation cause concern for price gouging. Still no one complains when the soft drink companies make obscene profits. Link to comment Share on other sites More sharing options...
Taro T Posted September 25, 2005 Share Posted September 25, 2005 I'll try. Barriers to entry in the industry. Not just any one can start up an oil company and become dominent by offering a better product or a lower price. Oil companies are not monopolies exactly. Because they positioned themselves way back when, I think they operate more like oligarchies, like a part of government that's controled by only a few. I guess the politics of the situation cause concern for price gouging. Still no one complains when the soft drink companies make obscene profits. 453214[/snapback] Furthering your argument: the thing is, you can stop buying soft drinks (it took me three years of trying, but I finally did it). In the short term (say, next 5 years) you can only reduce your oil consumption, not eliminate it. The oil companies are a different beast altogether. I think the govt. screwed up when they let the oil companies remerge. I've heard that Exxon-Mobil controls 40% of the oil supply (unfortunately, I haven't heard a definition of what "control" is). Oil is a bit different from other commodities in that it appears to be a finite resource (like gold or silver) but once it is used it is gone (unlike say wheat or corn or even gold which can be remelted and remolded). Typical supply and demand theory doesn't fully hold, in that someone who has oil resources has a finite supply and (if he has 40% of supply, as I have heard Exxon-Mobile has; again, I repeat, I have not heard how this percentage of supply is defined) isn't necessarily going to put product on the market once his margin cost is exceeded. With a finite supply and no fear of product coming back on the market from customers, it is in the seller's best interest to limit current supply and raise prices both now and in the future. Yes there is a price that will increase conservation and limit demand, but what that price is is not entirely clear. That is part of the reason we have witnessed such large increases in price over the last 2 years. Dave. Link to comment Share on other sites More sharing options...
finknottle Posted September 26, 2005 Share Posted September 26, 2005 Furthering your argument: the thing is, you can stop buying soft drinks (it took me three years of trying, but I finally did it). In the short term (say, next 5 years) you can only reduce your oil consumption, not eliminate it. The oil companies are a different beast altogether. I think the govt. screwed up when they let the oil companies remerge. I've heard that Exxon-Mobil controls 40% of the oil supply (unfortunately, I haven't heard a definition of what "control" is). Oil is a bit different from other commodities in that it appears to be a finite resource (like gold or silver) but once it is used it is gone (unlike say wheat or corn or even gold which can be remelted and remolded). Typical supply and demand theory doesn't fully hold, in that someone who has oil resources has a finite supply and (if he has 40% of supply, as I have heard Exxon-Mobile has; again, I repeat, I have not heard how this percentage of supply is defined) isn't necessarily going to put product on the market once his margin cost is exceeded. With a finite supply and no fear of product coming back on the market from customers, it is in the seller's best interest to limit current supply and raise prices both now and in the future. Yes there is a price that will increase conservation and limit demand, but what that price is is not entirely clear. That is part of the reason we have witnessed such large increases in price over the last 2 years. Dave. 453353[/snapback] I think the Exxon-Mobile figure comes from a loose distinguishing between 'commercially owned' and 'quasi-government ownd;' with things like Russian oil falling in the latter. Anyway, so what if they ratchet up the cost? Ideally speaking, behavior will adjust and society will adjust. Maybe some farmers will find it more profitable to stop selling their lands for development and decide to make organic fuels instead. Maybe people will stop buying hummers. I still see no need for government price intervention in any situation other than to moderate abrupt spikes. And that is on national security grounds rather than to punish gouging. Here's a hypothetical question: Refiner X figures out an incredible way to produce finished output at the same quanity and quality but using only 10% of the raw crude. They keep the refining metod a trade secret, and continue to price the output at the current unchanged market price thereby making a whopping profit. Are they gouging? Should they be punished for their innovation? Link to comment Share on other sites More sharing options...
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