Down with the evil Gas lords. (yes, i am brave enough to post another from myspace)

[KrazyHorse]

Originally posted by Kaak
I'll admit, I had no idea. My bad.

You have no idea, period.

How much longer can he keep this up, folks?

[JohnT]

Originally posted by Kaak
I also admitted there that wasn't familiar with 10-k.

Originally posted by Kaak
I'll admit, I had no idea. My bad.

But this is the point, the entire problem with this "discussion".

You are not familiar with the terminology, the laws, nor even the basic financial documents of the oil industry (or any company, for that matter). You have people who study this stuff for either their professional interest or investment interest, you're getting it all wrong, and yet you won't stop.

It would be akin to my arguing physics with KH for 300 posts using only my memories of HS physics lab, a few discussions I had over the years, and that "really interesting" Timothy Ferris book I read a couple of years ago.

[Kidlicious]

Here's a graph of the capacity vs. utilization. Utilization does normally decrease when capacity increases.

[KrazyHorse]

Arguing oil with any Canadian nowadays is probably a bad idea. We've all become instant experts over the last couple of years...

[KrazyHorse]

If his father really is in the oil biz I'm surprised he didn't know how big the Saudi company was, or how royalties worked, or who was paying who to drill offshore, or the existence of a global market, or...

[Spiffor]

Originally posted by KrazyHorse
More demand for oil means higher prices on each barrel of oil

QFT. At least, as long as oil is allocated in a market-like fashion (which is the case in pretty much the entire world but Venezuela's *****es)

which means more expensive gasoline.

That much is definitely not as clear. As you know, there is no 1:1 correlation between the production costs and the market price, far from it. Actually, since the market price is entirely defined by supply and demand, the higher production costs should only result in price hikes as more suppliers are forced out of business, which would result in a lower supply.

This is not what is happening. No gas-company is in the crapper, AFAIU, far from it. I don't think there is any reduction in the gas-supply, at least in the American market (things might be different in Africa or somesuch).

Think of it this way: gas-companies have afforded to make the end-customer bear the cost of increasing oil prices. It's not like they decided to do that in the last resort, in a desperate bid to remain economically alive, after having saved every single penny they could in their production process. No. All companies have increased their gas prices according to the oil prices in a fully natural fashion.

Considering that each of these companies is making profit without any problem (both mean and marginal), why doesn't any of these companies start an aggressive commercial policy in order to attract more custmers? That's the real-world supply-side mechanism in setting the price. Why don't we see it occuring at US pumps (and in no other pumps that I know of, incidentally)

[Kidlicious]

Originally posted by JohnT


Refined in the US != Sold in the US.

I doubt if much gas is imported. I think the norm is to import the oil and refine it for local markets.

[KrazyHorse]

Originally posted by Spiffor

which means more expensive gasoline.

That much is definitely not as clear. As you know, there is no 1:1 correlation between the production costs and the market price, far from it. Actually, since the market price is entirely defined by supply and demand, the higher production costs should only result in price hikes as more suppliers are forced out of business, which would result in a lower supply

?

If oil goes up in price then refined products go up in price, and vice versa. The only exception is when refining capacity is especially tight. We saw that for a few weeks after Katrina. Usually, gas and oil are pretty tightly knit (with some, but not that serious fluctuations)

[Spiffor]

Originally posted by Imran Siddiqui
Add to that the fact that gas had been seriously underpriced in the US from the mid 80s to 2001, and you were guarenteed to see a shooting up of prices.

btw.

Maybe now you guys will finally see the light and invest in mass transit, and slow down on the suburbian hysteria

[Zkribbler]

Originally posted by KrazyHorse
Arguing oil with any Canadian nowadays is probably a bad idea. We've all become instant experts over the last couple of years...

[Arrian]

Or at least carpool and buy more fuel efficient cars. Mass transit has significant downside (individual flexibility) that would require gas prices to go up a lot more before I'd be taking the bus.

-Arrian

[KrazyHorse]

Originally posted by Spiffor
Think of it this way: gas-companies have afforded to make the end-customer bear the cost of increasing oil prices

Of course they did. What they're selling is refined oil. The cost of oil is not a minor part of the cost of gasoline; it's a very large part of it. It's like saying that the canned corn manufacturers have managed to pass on the cost of increasing corn prices. No ****.

[Imran Siddiqui]

Originally posted by Spiffor
Maybe now you guys will finally see the light and invest in mass transit, and slow down on the suburbian hysteria

Unlikely. The US has tons of land and people aren't going to want to crowd into cities. Maybe people will drive less, but more likely people will suck it up... or increase mass transit somewhat (but not that much).

It's an entirely different situation. Y'all live crowded because you have to. We don't have to and we don't want to (I enjoy living in the suburbs for one).

[JohnT]

Exactly why would I need mass transit? The entire city is but 20 miles across... but it's 100 miles to the next big city (Chattanooga). The Knoxville population is too small to support a local rail system, and the cities aren't close enough to amortize that cost by linking the lines together.

[Kaak]

Originally posted by KrazyHorse
If his father really is in the oil biz I'm surprised he didn't know how big the Saudi company was, or how royalties worked, or who was paying who to drill offshore, or the existence of a global market, or...

My dad worked in the oil business until I was ~3, and then started again after I went off to school 7 years ago. As for the global market of oil, I agree the whole world uses oil, but prices are not the same everywhere.