Re: Texas oil is up again
- From: "John Galt" <whoisjohngalt@xxxxxxxxxxxxxx>
- Date: Thu, 3 Jan 2008 09:58:55 -0600
"Jean Paul" <jobbahut@xxxxxxxxxxx> wrote in message
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"John Galt" <whoisjohngalt@xxxxxxxxxxxxxx> wrote in message
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"Gary" <none@xxxxxxx> wrote in message
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Have you noticed that when oil hit $100 a barrel yesterday, that
British North Sea crude never got over $98 a barrel. I wonder why it
is that our friends and allies in England always charge us less for
oil that do the Saudis and the Texas oil shieks ?
Not to screw up a good conspiracy theory, but the regional variations per
barrel have to do with the quality of the crude -- the lower the quality,
the more expensive the refining process, and that cost is reflected in
what a refiner will pay for the crude.
JG
John, here is something that I wonder about. We know that the $100/b
price we see is the spot price on the world market. It is set by bidders
bidding up that price.
1. Who controls the bidders?
Nobody. They work for both the majors and the independents.
2. Do the majors such as Exxon Mobil pay the world market price or do they
have contracts with the Saudis and others that are much lower than market?
Possibly. The majors have complex agreements and they expect to be paid back
for the investments that they are making that the individual countries
prefer not to make. This can possibly take the form of a per-barrel rebate
until a given amount of money has been recovered.
I live near the refiners here in Texas and have many friends that work for
the petrochemical industry and we hear things from them. Several of my
friends have lived and worked in Saudia Arabia running their oil
operations. They tell me that Exxon does not pay that price for their oil.
They have long term contracts at much lower prices but charge for the
gasoline as if they paid the higher spot market price. Hence, their
record profits.
Sure.
Just a tidbit of info in case you didn't know this;
During the Desert Storm I war in which the US and others kicked Saddam
Hussein's army out of Kuwait, part of the deal with Kuwait and Saudi was
not only military bases there but also they contracted to provide the US
with oil at $10/ b for a period of 10 years.
That's not a problem for them. Back twenty years ago I remember that the
Saudis were said to be profitable at $2 a barrel. Adjust all that for
inflation and currency fluctuattions, and you still don't get up to $10
bucks, I don't think.
JG
JP
Why is it that every time we bomb the Arabs, the price of West texas
crude oil goes up ? By the reaction in oil prices -- you'd think
it was little Texans being blown up. I never could understand that
relationship.
With friends like the Saudis, the Israelis and the Texas shieks --
the working people in America can't afford any enemies. It's hard
enough to enrich our "allies".
.
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