the price per barrel dropped slightly yesterday, but now that a tsunami has hit japan, will this affect gas prices?
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could gas prices go up even more? (tsunami)
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Do you really expect prices to drop? I suspect the major oil companies will view this as an oportunity to make more money.
Originally Posted By: Eddie
Do you really expect prices to drop? I suspect the major oil companies will view this as an oportunity to make more money.
How does the oil company control the price of oil? There are only two main organizations that control the price of oil - OPEC and market speculators.
I remember back in late 2008 with the price of oil real high that Valero, a major gasoline refinery in Texas, lost $400 million in one quarter because the price of oil was so high compared to the price of refined gasoline. They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
Do you really expect prices to drop? I suspect the major oil companies will view this as an oportunity to make more money.
How does the oil company control the price of oil? There are only two main organizations that control the price of oil - OPEC and market speculators.
I remember back in late 2008 with the price of oil real high that Valero, a major gasoline refinery in Texas, lost $400 million in one quarter because the price of oil was so high compared to the price of refined gasoline. They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
Oil is off this AM. USA is still the largest economy....depends mostly on our demand.
I'm thinking an initial drop, then the oil speculators get their ducks in a row to start the next run-up in oil prices.
Originally Posted By: SVTCobra
I remember back in late 2008 with the price of oil real high that Valero, a major gasoline refinery in Texas, lost $400 million in one quarter because the price of oil was so high compared to the price of refined gasoline. They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It's hard to scale that sort of business... a long trip from discovered reserves to market. Think of how long it takes to set up a rig, crude transportation, then find an existing refinery, tune it for the crude coming in, anticipate the mix of diesel/gas/jet fuel/etc the world will need, then ship it out again. And everyone's watching everyone else trying to guess their next move.
The speculators HELP this decision making immensely by analyzing everyone's output and setting target prices in the future. Fall 2008 was an odd time to be in the oil business with prices of everything falling out because demand dropped a couple percent.
I remember back in late 2008 with the price of oil real high that Valero, a major gasoline refinery in Texas, lost $400 million in one quarter because the price of oil was so high compared to the price of refined gasoline. They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It's hard to scale that sort of business... a long trip from discovered reserves to market. Think of how long it takes to set up a rig, crude transportation, then find an existing refinery, tune it for the crude coming in, anticipate the mix of diesel/gas/jet fuel/etc the world will need, then ship it out again. And everyone's watching everyone else trying to guess their next move.
The speculators HELP this decision making immensely by analyzing everyone's output and setting target prices in the future. Fall 2008 was an odd time to be in the oil business with prices of everything falling out because demand dropped a couple percent.
And demand dropped a couple percent because Goldman pumped & dumped oil futures-crashing the economy in the process, and demand in the US has been basically flat to declining ever since.
Originally Posted By: demarpaint
I'm thinking an initial drop, then the oil speculators get their ducks in a row to start the next run-up in oil prices.
+1
Someone, somehow, will find a reason to cause a run-up to capitalize off of this event. Truth be told, if the prices I posted on GasBuddy this morning aren't up by at least 10-cents on my trip home tonight, I'll be extremely surprised.
I'm thinking an initial drop, then the oil speculators get their ducks in a row to start the next run-up in oil prices.
+1
Someone, somehow, will find a reason to cause a run-up to capitalize off of this event. Truth be told, if the prices I posted on GasBuddy this morning aren't up by at least 10-cents on my trip home tonight, I'll be extremely surprised.
Kestas
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It seems that when ANYTHING happens, the price of gas goes up.
Originally Posted By: SVTCobra
They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It means they have made small profit on variable cost but isn't enough to cover the fixed cost, or they have signed contracts that guarantee certain prices to their customer, but they forgot to contract for a fixed price on their supply.
They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It means they have made small profit on variable cost but isn't enough to cover the fixed cost, or they have signed contracts that guarantee certain prices to their customer, but they forgot to contract for a fixed price on their supply.
I am personally a fan of the "it's winter, so heating oil demand is driving up the price of gas!" "Oh wait, it's summer, the summer driving season is driving up the price of gas!" theories. Sooooo pretty much the price of gas goes up all year!
Originally Posted By: PandaBear
Originally Posted By: SVTCobra
They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It means they have made small profit on variable cost but isn't enough to cover the fixed cost, or they have signed contracts that guarantee certain prices to their customer, but they forgot to contract for a fixed price on their supply.
It means that other people (countries) were able to produce refined gasoline cheaper than Valero could, and since Valero does not control the market, had to sell refined gasoline at a net loss.
Originally Posted By: SVTCobra
They kept on refining the gasoline because it was cheaper to lose money refining gasoline than it was to shut their refineries down. I would think that if they control the price of oil, then why would they purposely lose money refining gasoline?
It means they have made small profit on variable cost but isn't enough to cover the fixed cost, or they have signed contracts that guarantee certain prices to their customer, but they forgot to contract for a fixed price on their supply.
It means that other people (countries) were able to produce refined gasoline cheaper than Valero could, and since Valero does not control the market, had to sell refined gasoline at a net loss.
Watch what goes on in the Persian Gulf. If the Bahrain govenment is replaced by a Iranian friendly government and Saudi has more internal issues my best guess is the price will escalate. Iran is the 800 lb gorilla and waiting for the USA to further reduce troop strenght in Iraq. This is the area and the situation that will directly determine what we will pay at the pump. Iran's goal is to be the dominant player in the Middle East and particularly the Persian Gulf. What is going on in Libya is a side show compared to what could happen. Just my opinion.
Originally Posted By: demarpaint
I'm thinking an initial drop, then the oil speculators get their ducks in a row to start the next run-up in oil prices.
Agreed. I'm not sure how much of an impact the Japan situation will have, but there is also a lot of unrest brewing in Saudi Arabia and other Mid-East countries which traders are closely watching. My gut instinct is that a combination of both issues will soon drive prices higher.
I'm thinking an initial drop, then the oil speculators get their ducks in a row to start the next run-up in oil prices.
Agreed. I'm not sure how much of an impact the Japan situation will have, but there is also a lot of unrest brewing in Saudi Arabia and other Mid-East countries which traders are closely watching. My gut instinct is that a combination of both issues will soon drive prices higher.
Originally Posted By: Jim_Beverlin
Watch what goes on in the Persian Gulf. If the Bahrain govenment is replaced by a Iranian friendly government and Saudi has more internal issues my best guess is the price will escalate. Iran is the 800 lb gorilla and waiting for the USA to further reduce troop strenght in Iraq. This is the area and the situation that will directly determine what we will pay at the pump. Iran's goal is to be the dominant player in the Middle East and particularly the Persian Gulf. What is going on in Libya is a side show compared to what could happen. Just my opinion.
This! A war here is just waiting....Then you guys will be screaming about the gas prices......
Watch what goes on in the Persian Gulf. If the Bahrain govenment is replaced by a Iranian friendly government and Saudi has more internal issues my best guess is the price will escalate. Iran is the 800 lb gorilla and waiting for the USA to further reduce troop strenght in Iraq. This is the area and the situation that will directly determine what we will pay at the pump. Iran's goal is to be the dominant player in the Middle East and particularly the Persian Gulf. What is going on in Libya is a side show compared to what could happen. Just my opinion.
This! A war here is just waiting....Then you guys will be screaming about the gas prices......
Of course they will, earthquake will have no effect.
Raising prices is all part of the plan.
Don't forget to vote for your favorite plan in 2012!
Raising prices is all part of the plan.
Don't forget to vote for your favorite plan in 2012!
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I don't think earthquake and tsunami will have short term effect.
If anything the amount of economic activities would be lowered and work like a recession for japan.
My guess is if Saudi or Nigeria has any instability, it could easily go up to $6-7 a gallon.
If anything the amount of economic activities would be lowered and work like a recession for japan.
My guess is if Saudi or Nigeria has any instability, it could easily go up to $6-7 a gallon.
Would think they'll go up when they start to rebuild . Will be use of heavy machinery , oil/gas plants are down , and the U.S. supplies JAPAN with oil / gas . So , we'll likely have to supply more for the future . Thus I say UP within a month . Hope I'm wrong .
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