Fucked at the pump!

[SEEGERMANY]

Trust me, I'm all for alternative forms of power, whether it be wind, solar, hydro, even nuclear. We as a country need to be self sufficient, especially when it comes to oil. If we don't eventually get to that point, we're gonna find ourselves in a conflict with some Middle Eastern country who in the past has supplied us with oil. They're gonna look at us and say "look you fucking morons, you want us to supply you with oil so you can fuel the tanks to kick our asses?"

My dad raised me to conserve our resources. But like millions of others, I've squandered these resouces at times. IT'S CALLED LIVING! I burn too much gas. I use paper towels instead of a dish rag. I eat off plastic. I'll gladly use solar power if and when it's available and affordable. I'll put a fucking windmill on my rooftop if the homeowner's association promises not to kick me out of the neighborhood.

The government says that their resources are limited. Well, so the fuck are mine. Drill for the oil, get busy processing it, and when my Suburban finally wears out, I'll buy an electric scooter and put a fucking Jackson/Charvel sticker on the fender!

[OnlineStageGear]

I assume that's some "be all and end all" of oil deposits?

You know it takes at least 10 years to see any results from drilling, right? It's not a quick fix. We'll be paying $17 per gallon before that can be refined.

The goal is to become less dependent on oil, not find more. IMHO.

Even if we just agree to start drilling more oil, that would effect the mark overnight.

[Bengal]

Even if we just agree to start drilling more oil, that would effect the mark overnight.

That is an interesting take that I've never thought of before. Seems to be logical.

[ABSOLUT CHARVEL]

That is an interesting take that I've never thought of before. Seems to be logical.

yes, but which way?

[yard dawg]

Part of the problem is two fold...Notice I said part of, not the bulk of but just part of.

This administration has taken from the "education" budget and providing no incentives.
The first time in American history, few engineers and scientists will be graduating pursuing careers in his or her field of science, medicine and etc.
No engineers and scientists means no innovation.
No innovation means, markets shrink, competition stifled and etc. because the minds to create and innovate aren't enough.
Also, the first time in American history the labor force (those that do the actual physical work) that the innovators create, aren't enough.
In other words, we don't have enough workers to do the work.

This is the deliberate and intended work of turning this Country into a poor and rich only, eliminating the working class. You do this by not providing enough and discouraging the volume of Engineers and Scientists.

WHAT!!!!! Not enough workers? There is a plant opening up near me that had 8000 people apply for a few hundred jobs? Does that sound like a labor shortage? We have too many illegals here taking jobs from americans. Thats a real problem IMHO not a labor shortage.

Why would anyone want to be an engineer when all those jobs are being outsourced to India and China.


We need to drill here and teach people to drive motorcycles instead of huge SUVS

[AdRock]

yes, but which way?

Chances are it probably wouldn't move because they are so slow to respond to a drop in price. It annoys me to no end that when the price of a barrel goes up you'll see an increase at the pump within a day at most. However, when the price of a barrel drops you don't see a drop at the pump for a good while.

[YetAnotherOne]

I have a question or 2. How does the flow of oil go? Take me from the ground to the pump please. How does the commodities market get involved? In everything you can always follow the money to find the culprit.

Its my opinion thats its a combo of the specualtors,low dollar value and the big oil companys but I want to know for sure.

CM did yoeman's work in the explanation a few posts up, that's about as concisely as it can be stated thought there are a few other points worth considering.

There exist hedging rules in the US that are designed to avoid just the sort of speculative commodities bubble we find ourselves in with oil right now. I'm certainly no expert but IIRC oil producers are prohibited from having open contracts that exceed their approximate annual production and other crude users are prohibited from having open contracts that exceed their annual usage. Other rules prohibit individuals and other entites from upsetting the balance of buy/sell contracts in the market in an attempt to prevent bubbles / panics.

Big oil, while they're doing just fine right now thanks, is probably very limited in their ability to exert considerable pressure on the markets via their hedging activities both due to limitations imposed on them and via the fact that they require their available hedges to cover themselves in the case of extraordinary events. E.g., suppose Exxon runs an oilfield in Nigeria and has guaranteed XXX,XXX bbl/week to a refinery elsewhere in the world; clearly Exxon would need to hedge that contract against the political instability in Nigeria and the possiblity that they might be evicted, shut down, or overrun by an armed faction.

In the US at least some specific concerns in at least the airline and trucking industries have obtained exemptions allowing them to trade unlimited oil futures and certain financial concerns have crawled through these loopholes and are driving the current bubble. Who? Your guess is as good as mine but the most nimble money out there is typically found in hedge funds so they're certainly on the suspect list but I'd wager that investment banks hurt by the housing/credit crisis are looking to turn a quick buck to right their books as well, and there's no shortage of other likely culprits. So it's just a bunch of rich Wall St. guys, right? Not exactly, the largest hedge fund investors in the US (by far) are pension plans & university endowments with CalPERS (the California Public Employees Retirement System) being the single largest hedge fund investor on the planet. Big business in bed with Wall St., union bosses, and big government? Say it ain't so!

Consider also that a lot of money fled the speculative bubble in real estate last year and has been looking for somewhere to go. All it took was for the fed to devalue the dollar by pumping a bunch of new currency into the banks to start a capital flight that saw investors trade their rapidly-devaluing dollars for commodities they believed would hold value. In the past metals were the preferred commodities, this time it's oil.

At any rate it's a bit of a perfect storm. It's primarily big finance and their clients rather than big oil that's driving the futures prices though there is actual growing demand for oil, not just futures in oil, in some areas as well.

Where you don't want you money when the coming implosion happens: regional refiners, pipeline companies, wholesale crude purchasers, etc. Anyone off Wall St. but who is forced or tempted to hedge against rising prices is very likely to be one of the last ones standing when the music stops on this particular game of musical chairs. Given that these segments of the energy industry typically run on single-digit margins they have no room for mistakes but they're probably among the most likely to make them.

Time to continue burying bullion out on the back 40.

[YetAnotherOne]

This administration has taken from the "education" budget and providing no incentives.

Nonsense. Federal spending on education more than doubled under the Bush administration to levels never seen before in our nation. IIRC we now spend more than double per capita on each student as the next most wasteful nation.

Sincerely,

An ex-engineer who rapidly discovered that the rewards were far more lucrative in law & finance than in science & technology.

[ABSOLUT CHARVEL]

NO NO NO! you guys have it all wrong!

Its WALMART!!!!

They are the root of all evil.

They import shit from China. Stuff made there takes away jobs here (Unemployment)
They are fueling the China indrustry which means the demand of oil has increased and supply is down = higher $ at the pump = more Walmart shoppers = Walmart will take over the world!!!!!

(now where did i put my meds?)

[Soap]

NO NO NO! you guys have it all wrong!

Its WALMART!!!!

They are the root of all evil.

They import shit from China. Stuff made there takes away jobs here (Unemployment)
They are fueling the China indrustry which means the demand of oil has increased and supply is down = higher $ at the pump = more Walmart shoppers = Walmart will take over the world!!!!!

(now where did i put my meds?)

:ROTF:

[YetAnotherOne]

NO NO NO! you guys have it all wrong!

Its WALMART!!!!

They are the root of all evil.

They import shit from China. Stuff made there takes away jobs here (Unemployment)
They are fueling the China indrustry which means the demand of oil has increased and supply is down = higher $ at the pump = more Walmart shoppers = Walmart will take over the world!!!!!

(now where did i put my meds?)

Have you read the series of recent, and quite serious, thoughts that have been floating around in some corners of the media which relay a bunch of ideas on how Wal Mart can solve most of the issues with the US health care system if the government will just stay out of their way long enough?

[eddie_van_earache]

if i jsut stand at the pump and let someone kick me in the balls ever time the the gallon dial changes can i get a discount? If so.. sign em the F up!!!!

[Bengal]

All I know is gas went from $3.68 to $3.89 overnight here from Friday to Saturday. 21 cent increase in 12 hours.

What I want to know is this. How can a station increase the price when they don't get any new stock? They supplier has not come and refilled the underground tanks. They have already bought that gas at a price, right? So why does it go up when it's already been paid for by the station? That's what irks me. Maybe there is a good reason for it but I've never heard one.

[YetAnotherOne]

That sort of price increase is probably mostly due to the extremely low margins gas stations make on their retail fuel sales. Consider California's running analysis of retail gasoline prices which is probably a fairly reasonable breakdown. Retail margins, the markup your local filling station charges you per gallon, are included in the "Distribution Costs, Marketing Costs, & Profits" category. Note that as of the week of June 2 those costs contributed $0.01/gallon to the price of gasoline in California for branded gasoline and a net -$0.25/gallon (implying sales below cost by stations) for unbranded gasoline. Remember that the retail margin is included in those figures so they represent an absolute maximum, the actual retail margin will be less or more negative as the case may be.

When you realize just how thin your local station's margins are the reason for early price increases becomes obvious: in a market where prices are rising rapidly your local station must increase prices on existing stock to cover the purchase of their next bulk delivery. If they don't raise prices prior to their next bulk purchase their current sales won't cover the next delivery and that portion of the business will slide into the red. You'll only see these retail prices drop as a result of competition with other stations but they'll always rise in anticipation of rapidly rising wholesale prices.

[Predator1]

It's a free market system. They can sell it for what ever they can get for it. The market set's the price.