Re: (OT:) The price of a barrel goes up...
- From: "Jeff Strickland" <crwlr@xxxxxxxxxxx>
- Date: Sun, 01 Jun 2008 04:36:42 GMT
"Jeff" <kidsdoc2000@xxxxxxxxxxx> wrote in message news:3ub0k.906$BV.544@xxxxxxxxxxx
Moe wrote:Jeff wrote:Norm De Plume wrote:The true cost, even with the 4 dollar drop in crude this week, hasn't been passed on, If you think 4 dollar gas is expensive try pushing you car as far as it will go on a gallon of gas. The price won't bother you nearly as much after you've pushed it a few miles.
Mike hunt wrote:
I guess it depends on ones definition of "The price of gas goes up every
time crude goes up" Last year a time crude was around $60 a barrel and
gas was around $2.60. Today crude is up to $130 a barrel yet gas is not up
to $5 a gallon, it is $4. Obviously it did not go up EVERY time crude
when up ;)
From the information you provided, it is not obvious the price of
gasoline rose every time the price of crude rose. At best you've
shown that the price of gas did not go up proportionally as much as
the price of crude. Perhaps your 3% CO2 atmosphere is affecting your
mental process, as it did when you said the Federal Reserve didn't
exist in the early 1940s. ;)
Actually, if you subtract the cost of transportation, refining and taxes, then I think you would find that the price of gasoline is pretty closely related to the cost of crude oil. However, it is not perfectly related. Politics and supply and demand play a role, as do other factors.
Jeff
That, IMHO, is a stupid comment.
The hot money is now looking at refineries,
http://www.insidefutures.com/article/67199/$140%20Next?.html
Notice how the Crack Spread reached $30/bbl at the end of May 2007. But this year, the spread has struggled for most of 2008 to get above $15/bbl. And now it appears the spread has is once again gaining some momentum, climbing its way back towards the $30 level, which I believe it will try to get back to. However, it has a way to go and from there it will require a shift in momentum to turn it around. When we see the Crack Spread start trading sideways, after it moves above $30/bbl, then a top might be forming.
Gee, the oil companies, including refineries, are in business to make money.
But Jeff, they made gobs of money when they were regulated back in the '60s and before. I remember tanks in Long Beach that went up and down as they filled and drained. We had Gas Wars, where the oil companies spurred demand by dropping the price of gas relative to the gas station on the other corner.
Oil Company Stock (energy stocks in general, and utility stocks in particular) were among the best stocks to hold in grandpa's portfolio.
California deregulated the electricity markets back in 1996, and it has been perhaps the worst thing for the consumer that has ever happened. We have passed a host of environmental laws that prevent any new plants being built here. It is not enough that environmental rules demand cleaner plants, they prevent any new plants from being built, and all but shutter existing plants when a company is sold because the new owner has to bring the plant up to a new set of rules -- a good thing, by the way -- that are very costly to implement. The buyer already has a presence here, so it simply ups production at the plant it already has, and shutters the one it just bought -- which begs the question, why buy a company in an environment that forces you to close the operations of the company you just bought? The assumption I make is that the imputus to buy a company is to grow, but how much growth do you realize when you have to close operations of the company you bought, instead of meld those operations into your own existing business? The answer is, they do not buy companies to grow, they buy them to control the market. If they want to control themarket, then they ought to be controlled themselves, and they should be forced to report record profits as a result of record sales, not record prices.
.
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