BP Shuts Down Oil Pipeline

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Originally posted by eljefino: ...Not much you'd think but it's hard to get through to the vast majority. Still seems to be lots of people out there who think "others" should take the subway, others should trade in SUVs, others should carpool. Yet they're somehow special [I dont know] and the others should save them some gas.... [Smile]
This is one of, if not THE major problem in the world. Everybody thinks they're somehow exempt, special, etc.
 
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Originally posted by Al:
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Originally posted by jmacmaster: I agree with Bryan, and the many experts, who say that there is no oil shortage. There never has been.
There is no shortage at 3.00 gas..but there will at $2.50
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Originally posted by jmacmaster: My answer is that its not the news media that's doing the manipulating. Its the oil industry.
I'd explain how oil is priced-again..but I'd be wasting my time.
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Originally posted by jmacmaster: A lot of people are fond of chanting "supply and demand", "supply and demand", "the market determines the price", "the market determines the price". Well, they need to take a course on economics.
No disrespect but I doubt you understand how the free market, commodities (futures/options) operate. [Frown]

Anyone who thinks that there will be an oil shortage at $2.50, but not at $3.00, obviously knows nothing about economics, and I'm not going to waste my time arguing with them. This is an inane claim. Some of us would love to read your views as to how oil is priced, so long as you do not spout and chant the view that "the market should determine the price and supply and demand determines the price". Anyone who believes this has not been following the history of the oil industry's manipulation, price fixing, and price gouging. That history goes back to 1890, when the U.S. Congress passed the Sherman Antitrust Act, two of the main purposes of which were to stop price fixing and price gouging by big businesses, particularly the Standard Oil Company, which supplied absolutely essential products and services to the American public, but conspired to price fix and price gouge the public. I am well aware of how the free market SHOULD operate in an ideal world of theoretical economics in which it is allowed to freely operate without manipulation by those who seek to price fix and price gouge. I have read and studied the basic and classic texts on economics. In fact, I read them in the 1960's and have read many books on economics, theoretical, practical, and otherwise, since then. One of the things that I like about BITOG is that most people don't try to pass themselves off as experts on things that they know little, if anything, about. I suggest that you stick to subjects that you know a fair amount about.
 
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IN REGARD TO BP'S NEWS RELEASES ON THE ALASKAN OIL PIPELINE SHUTDOWN These self-serving statements by a company that is a member of an industry that has historically shafted the American public are to be taken with a grain of salt. We are seeing, yet again, an industry that is attempting to pull the wool over our eyes with misleading and deceptive statements as to the reasons for the obscene price increases for their product. We saw this a couple of years ago, when many of the states deregulated the electricity industry (at the behest of that industry) with the claim that deregulation would result in increased competition by the companies providing electricity, supposedly resulting in lower prices for electricity. The result was increased electricity prices in most of the nation. In the Pacific Northwest, which had the lowest electricity rates in the nation before deregulation, the price of electricity skyrocketed. There was NO competition by the electricity companies. It came to pass, as reported in the news media, that deregulation resulted in price fixing, price gouging, and a movement by the electicity companies to reduce supply and at the same time claim that tremendous increases in demand led to the increased rates for electricity. Those of you who bothered to follow this fiasco read the transcripts of tapes, reported in the national news media, made by California electric companies executives, in which they bragged and laughed about how they were purposely reducing the supply in order to create a demand crisis that would allow them to drastically increase prices under the rubic of the much chanted phrases of "supply and demand" and "let the market determine the price". For those of you who follow, for whatever reason, the prices of building materials, the same type of thing happened with OSB (oriented strand board), also called waferboard, a couple years ago. The price went from about $8 for a 4x8 sheet to over $18 a sheet. The industry claimed that the reason was that 2 or 3 waferboard plants had burned down and 2 or 3 others had to be shut down for refurbishing to modernize them. It then came to pass that those 4-6 plants produced about 2-3% of the waferboard in this country and the whole thing was an industry contrived price gouging of the American public. I could give other examples, but I think that I've made my point. As I have said before, the economic theory of supply and damand market pricing only works when supply is not manipulated by those who are supplying the product or service. And such manipulation is rampant in this country, in industry after industry. If you don't believe me, take the time to read the history of the enactment, and reasons for, the antitrust laws that this country has enacted since 1890. Talk is cheap people. But it is better that you walk the walk and take the time and energy to inform yourselves before you voice your uninformed opinions.
 
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I was going to reply to JAcmaster but I am tired after working two 16 hour days in a row with one more to go before I get out of here. It's OK to be Cynical.. But the line between cynicism and paranioa can be an elusive and thin one. Judge for yourself.
 
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Originally posted by Bryanccfshr: Thank you, I apoligize if I ever offend anyone in my chalenges or rebuttals, I'm just trying to make sure my fellow BITOGers have access to the truth. Here's a decent article today that is pretty spot on. THe sensationlism in the press is cooling off and more rational articles are coming forth. http://money.cnn.com/2006/08/08/news/economy/oil_infrastructure/index.htm?cnn=yes
I very much doubt that you've offended anyone on this site. However, BP's press statements do not convince many of us. We'd rather see some independent, neutral, nonpartisan analysis of what happened, what's the problem, and what it will take to fix it. BP obviously has an agenda, the agenda being to sell as much oil as it can at the highest price that it can. I personally heavily diccount the statements of an entity whose goal is to sell me its product. A case in point -- the "tornado" device that one puts in the air intake system of one's motor vehicle, shown by independent analysis to be a farce and an attempt to fleece the public.
 
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Originally posted by keith: [QUOTE]Overall, BP will lose money on this shutdown.
Not necessarily so. BP will lose the profits off of the Alaska Pipeline. However, the closure of that pipeline has already resulted in increased prices for petroleum products and we will probably see more petroleum price increases allegedly caused by the pipeline shutdown. BP pumps oil in numerous places besides Prudhhoe Bay. It is quite possible that the INCREASE in BP's profits from oil pumped by BP from those other sites is larger than the profits lost by the Alaskan Pipeline shutdown.
 
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Originally posted by Bryanccfshr: I was going to reply to JAcmaster but I am tired after working two 16 hour days in a row with one more to go before I get out of here. It's OK to be Cynical.. But the line between cynicism and paranioa can be an elusive and thin one. Judge for yourself.
With all due respect to Bryan, what I've said in my recent posts is a matter of well documented American history. It is fact, for anyone who wishes to take the time to delve into the matter. This is not cynicism, and its not paranoia. It happened. Deal with it. Name calling is one of the usual resorts of those who do not have the facts, truth, and reason on their side. A lack of knowledge of history is an epidemic among the people of this country. As a famous man once said: "Those who do not know history are condemned to repeat it". The lessons of the past have much to teach us. Bryan said: "Judge for yourself". I can live with that. [ August 09, 2006, 01:45 AM: Message edited by: jmacmaster ]
 

Al

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Originally posted by jsharp: I'm sort of curious as to how the oil futures market actually works since they seem to be the ones that have given us the panic pricing recently.
I am not passing myself off as an expert as some have suggested. I have though traded Stock Options currencies on the Forex Market. Essentially the price of all commitietes are determined at the spot markets which are located in NY and Chicago. Only a small percentage of a particular commitity is sold on the "spot market". However this price ultimately controlls what all of the current product is valued at. A wholsaler then can sell this product at that price. You could argue that it is a conspiracy, however that seller could offer his product on the "Spot Market" if he so choses or if anyone felt that the product was priced too high. As far as futures go. basically you purchase a contract of large amounts of product whereby you pay a percentage of the total value. You actually own the rights to either buy or sell the product. Options on the other hand only mean you have the "Right" to exercise an "option" on the product. Your loses are limited to the cost of the option whereas in futures your losses or gains are almost unlimited. But again it all ties into the "Spot" market as the controlling price. An internet search will get you clearer information. Those who think the whole thing is a conspiracy are free to join in on the "conspiracy" to earn or lose money.
 
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Originally posted by jmacmaster:
quote:
Originally posted by keith: [QUOTE]Overall, BP will lose money on this shutdown.
Not necessarily so. BP will lose the profits off of the Alaska Pipeline. However, the closure of that pipeline has already resulted in increased prices for petroleum products and we will probably see more petroleum price increases allegedly caused by the pipeline shutdown. BP pumps oil in numerous places besides Prudhhoe Bay. It is quite possible that the INCREASE in BP's profits from oil pumped by BP from those other sites is larger than the profits lost by the Alaskan Pipeline shutdown.

While BP operated the oil fields, I think they share rights to the oil with Exxon/Mobil and someone else. 26% sticks in my mind for some reason. I think that's BP's actual piece of the pie?
 

Al

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I guess most people even the dumb ones are understanding that the mainstream media's goal is to push fear/anxiety to get listeners: Gasoline has dropped 20 cents on the spot market in the last 4 days. Its a plot by those evil oil companies to confuse us I tell 'ya.
 
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In Helena, Montana, its gone up an average of 7 cents a gallon at the pump in the last 4 days. In the last 14 days, its gone up an average of 18 cents a gallon at the pump.
 
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We will all pay more each time something like this happens. For all the doubters of an actual shortage, ask yourself this question... when was the last time you heard of a MAJOR oilfield discovery???
 
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