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[SapientWolf]

More quotes from the petroleum report:

The United States has always been tied into the global petroleum product markets, but this export growth has transformed its position from a net petroleum product importer into a net petroleum product exporter in short order. In terms of gasoline, the United States remained a net importer for 2011 as a whole; however, on a monthly basis, it was a small net exporter by the end of the year.

So why do Gulf Coast refineries export product rather than send more to the East Coast, especially the Northeast, which receives much gasoline import volumes? Both pipeline capacity and domestic waterborne shipping constraints currently discourage increased volumes from traveling from the Gulf Coast to the East Coast. As long as European and other gasoline supplies remain competitive, the East Coast will continue to draw on these supplies.

http://205.254.135.7/oog/info/twip/twip.asp

So basically, we have excess gasoline and it's still more cost effective for some areas to import.

 

[Fatalah]

US oil companies export a great deal of American oil overseas. China needs oil, and there is money to be made. Keep the price of gas low for the American consumer? What, at the expense of losing billions in profit?!

For the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

 

[Zhengi]

Who cares if the price of gasoline doesn't go down? Producing more gasoline in the US means that we are less dependent on foreign oil and this is at least one good thing we can take out of drilling more.

 

[Dreams-Visions]

US oil companies export a great deal of American oil overseas. China needs oil, and there is money to be made. Keep the price of gas low for the American consumer? What, at the expense of losing billions in profit?!

good luck getting the average voter to accept this when a Mittens and Newt are out there saying they can magically give everyone $2.50 gas.

 

[DonasaurusRex]

Who cares if the price of gasoline doesn't go down? Producing more gasoline in the US means that we are less dependent on foreign oil and this is at least one good thing we can take out of drilling more.

uhhh what? more of a resource isnt helpful if its too expensive. Its fucking stupid. At the end of the day we want an energy source that allows ALLLLLL THE OTHER sectors of the market/economy to operate as cheaply as possible. If having all the oil we can dream of doesnt lower the cost of transportation then its stupid to pay for more drilling.

 

[Vicetrailia]

Drill baby Drill! More money NOW! Fuck green energy until the wells run dry and we can control it. Fuck off consumers who want cheaper gas.

Was that too serious?

Oh yeah I forgot about ANWR. Preserving 100% Natural Enviroments gettin' in the way of my money.

 

[mj1108]

Drill baby drill

Spoiler

so the speculators can get richer

 

[Jason's Ultimatum]

The problem is that any drilling would take years to have an effect on gas prices.

 

[hukasmokincaterpillar]

Position Limits, baby, Position Limits!

Hrmm, doesn't have quite the same ring.

Senate Dems ask the CFTC is they would be kind enough to start doing their job.
http://www.reuters.com/article/2012/03/21/usa-oil-limits-idUSL1E8ELNOC20120321

 

[Raistlin]

I was under the impression the more direct issue for the US is the lack of refineries, not oil production. We've closed tons over the years.

 

[Black Mamba]

I was under the impression the more direct issue for the US is the lack of refineries, not oil production. We've closed tons over the years.

and still expanded capacity.

 

[Zhengi]

uhhh what? more of a resource isnt helpful if its too expensive. Its fucking stupid. At the end of the day we want an energy source that allows ALLLLLL THE OTHER sectors of the market/economy to operate as cheaply as possible. If having all the oil we can dream of doesnt lower the cost of transportation then its stupid to pay for more drilling.

No it isn't because the US would still be producing something. That means relying less on others for something we can make ourselves and as others have posted, we can export and have less of a trade deficit. Prices are controlled by the other oil producing countries. This doesn't mean that the US can't benefit by producing its own oil and capitalizing on the price.

 

[antonz]

and still expanded capacity.

Problem is almost all the expanded production has gone to exporting. We are basically letting China etc take all the oil from America.

 

[clav]

Position Limits, baby, Position Limits!

Hrmm, doesn't have quite the same ring.

Senate Dems ask the CFTC is they would be kind enough to start doing their job.
http://www.reuters.com/article/2012/03/21/usa-oil-limits-idUSL1E8ELNOC20120321

Probably won't pass given the deadlock within Congress.

 

[Fatalah]

Problem is almost all the expanded production has gone to exporting. We are basically letting China etc take all the oil from America.

Yeup.

 

[ConfusingJazz]

Problem is almost all the expanded production has gone to exporting. We are basically letting China etc take all the oil from America.

They aren't taking it, people are selling it. Thus the reason people want to drill more: get more oil to sell, not to decrease price.

 

[marathonfool]

What incentive is there for oil companies to keep gas prices low when it's bringing them record profits? The incentives are completely out of whack with the welfare of the country. This is hardly a simple supply/demand issue.

 

[Black Mamba]

What incentive is there for oil companies to keep gas prices low when it's bringing them record profits? The incentives are completely out of whack with the welfare of the country. This is hardly a simple supply/demand issue.

oil companies don't choose the price, the world market and futures trading market does. oil companies also don't determine gas prices. Well, not necessarily.

Oil is sold for more than just gas production. Like plastic.

While you're right it's not simply supply/demand because of the speculation in futures trading, US oil companies have no say in oil prices.

Which makes them a perfect candidate for taxing, of course, since they can't actually pass on the tax to consumers. But I digress....

 

[NEOPARADIGM]

Problem is almost all the expanded production has gone to exporting. We are basically letting China etc take all the oil from America.

lol

 

[thefit]

There is no US Oil Company, they are all privately owned companies that can do whatever the fuck they want with the oil they can drill all they can and never have to keep any of the oil here free market wins again!

If newt wants $2.00 gas (lol) he'd have to nationalize the oil and heavily subsidize it.

 

[empty vessel]

Yep. I work in the oil industry and I'll be the first to tell anyone that we need to tamp down this theory that more drilling will reduce domestic prices. The U.S. doesn't have a national oil company, they're all multinational entities that deliver crude to the world market. It's not ours by default.

Exactly. The irony is that the Republicans are advocating socialism. Of course, they are doing it as a ruse to trick Americans into supporting the narrow interests of private oil companies.

 

[Black Mamba]

There is no US Oil Company, they are all privately owned companies that can do whatever the fuck they want with the oil they can drill all they can and never have to keep any of the oil here free market wins again!

If newt wants $2.00 gas (lol) he'd have to nationalize the oil and heavily subsidize it.

Not true. he can successfully enact his policies causing another worldwide recession. You'll see $2.00 gas soon enough.

 

[marathonfool]

oil companies don't choose the price, the world market and futures trading market does. oil companies also don't determine gas prices. Well, not necessarily.

Oil is sold for more than just gas production. Like plastic.

While you're right it's not simply supply/demand because of the speculation in futures trading, US oil companies have no say in oil prices.

Which makes them a perfect candidate for taxing, of course, since they can't actually pass on the tax to consumers. But I digress....

Speculators react to geo-political conflicts, fear of shortages, and refinery output. Oil companies tend to control the last two. While I don't expect oil companies to make risky investments, operating refineries have decreased in this period of increasing oil prices.

 

[thefit]

Not true. he can successfully enact his policies causing another worldwide recession. You'll see $2.00 gas soon enough.

I like it, can't worry about gas prices when you wont have a job a drive to.

 

[Black Mamba]

Speculators react to geo-political conflicts, fear of shortages, and refinery output. Oil companies tend to control the last two. While I don't expect oil companies to make risky investments, operating refineries have decreased in this period of increasing oil prices.

Oil companies don't control those. Those are by external shocks or political stuff. OPEC can potentially create a shortage, but the US multinational companies cannot.

As far as refineries go, as I said, their capacities have been expanded. There are less refineries, true, and that is due to crowding out of smaller firms.

But refinery shortages are not caused by oil companies. They don't just stop refining to increase prices (that's actually illegal). If there's a natural disaster or some kind or accident, that could cause a refinery shortage and affect gas prices, then yeah, but oil companies don't control that.


Oil prices are based on 3 things: daily production capacity, daily demand, and the oil futures market. problem is the oils futures market, and all futures market, were intended for hedgers to protect their investments in needing that commodity, but it's now rampant with speculators who treat it like a casino game.

 

[marathonfool]

But refinery shortages are not caused by oil companies. They don't just stop refining to increase prices (that's actually illegal). If there's a natural disaster or some kind or accident, that could cause a refinery shortage and affect gas prices, then yeah, but oil companies don't control that.


Oil prices are based on 3 things: daily production capacity, daily demand, and the oil futures market. problem is the oils futures market, and all futures market, were intended for hedgers to protect their investments in needing that commodity, but it's now rampant with speculators who treat it like a casino game.

Price gouging is illegal. I'm asking the question of how their incentives line up with increasing operating refinery. Their profits incentives are currently out of whack with refinery investment. Of course that is just one part of the equation.

Regulating the oil market as a less fungible trading commodity could be a possible way to keep the speculators out and investors in. I'm haven't done enough research to see if this is a good idea or a really bad idea.

 

[Black Mamba]

Price gouging is illegal. I'm asking the question of how their incentives line up with increasing operating refinery. Their profits incentives are currently out of whack with refinery investment. Of course that is just one part of the equation.

This is true. They have no incentive to increase refining capacity right now, for the most part. Just stating how they don't actively do anything to affect prices. Inactivity here, I suppose.

This affects gas prices, however, not oil prices. And even then, companies will still charge near the import price because...why sell cheaper (of course, import price should drop some)?

Regulating the oil market as a less fungible trading commodity could be a possible way to keep the speculators out and investors in. I'm haven't done enough research to see if this is a good idea or a really bad idea.

We used to regulate the commodities market better. Then Wall Street convinced us to deregulate most things. Worked out well for the housing market, why wouldn't it work out well for oil?

 

[SickBoy]

Just for the record, because a handful of people seem to have stated it in this thread:

"Petroleum products" is not the same thing as "oil"

Sure, the U.S. may have exported more finished petroleum products than it imported, but in terms of crude oil, it's still by far an importer: the EIA's 2011 summary suggests imports were more than 150% of domestic production (exports were less than 1% of imports)

Anyhow, just wanted to toss in that clarification.

 

[speculawyer]

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

Yeah . . . but that is just that liberal math sciency stuff they indoctrinate you with in college. Like evilution.

 

[Black-Box]

why would they drop price when no one is complaining about it, in ontario we got them to drop prices btw...looks like we got to do it again

 

[speculawyer]

Price gouging is illegal. I'm asking the question of how their incentives line up with increasing operating refinery. Their profits incentives are currently out of whack with refinery investment. Of course that is just one part of the equation.

Uh . . . not really. It is illegal in some states during times of emergency. But in general, no it is not illegal.

http://en.wikipedia.org/wiki/Price_gouging#Laws_against_price_gouging

 

[SpeedingUptoStop]

JUST PRESS THE MAGIC PRICE DROP BUTTON, OBAMA

 

[Wazzim]

JUST PRESS THE MAGIC PRICE DROP BUTTON, OBAMA

 

[Large Professor]

If US politicians are genuinely interested in bringing gas prices down they need to:
- Reach a diplomatic agreement/make peace with Iran.
- Tell the Fed to stop printing money.
- Do something about the financialization of oil.

 

[thatbox]

JUST PRESS THE MAGIC PRICE DROP BUTTON, OBAMA

The magic price drop button would only magically drop prices by a few cents (if at all), and would be astoundingly irresponsible.

If US politicians are genuinely interested in bringing gas prices down they need to:
- Reach a diplomatic agreement/make peace with Iran.
- Tell the Fed to stop printing money.
- Do something about the financialization of oil.

Why?

 

[Black Mamba]

Uh . . . not really. It is illegal in some states during times of emergency. But in general, no it is not illegal.

http://en.wikipedia.org/wiki/Price_gouging#Laws_against_price_gouging

IIRC, using market power to reduce supply to price gouge does violate the sherman anti-trust act.

 

[Raistlin]

and still expanded capacity.

I'm pretty sure we've lost, not expanded capacity.

 

[SpeedingUptoStop]

The magic price drop button would only magically drop prices by a few cents (if at all), and would be astoundingly irresponsible.

You KNOW he's just waiting for election season to really get going before he gets gas back down to $1.28/g. Come on, he's the President!

 

[Bulbo Urethral Baggins]

Obama yesterday:
"We have subsidized oil companies for a century. We want to encourage production of oil and gas, and make sure that wherever we’ve got American resources, we are tapping into them. But they don’t need an additional incentive when gas is $3.75 a gallon, when oil is $1.20 a barrel, $1.25 a barrel. They don’t need additional incentives. They are doing fine."

Can someone please explain wtf Obama is talking about? Does he really think oil is $1.20/barrel?

 

[Black Mamba]

I'm pretty sure we've lost, not expanded capacity.

UPDATE 1-US 2010 oil refining capacity highest in 29 years-EIA

We've lost refineries, but they've expanded the current refineries more than the small ones shut down.

Obama yesterday:
"We have subsidized oil companies for a century. We want to encourage production of oil and gas, and make sure that wherever we’ve got American resources, we are tapping into them. But they don’t need an additional incentive when gas is $3.75 a gallon, when oil is $1.20 a barrel, $1.25 a barrel. They don’t need additional incentives. They are doing fine."

Can someone please explain wtf Obama is talking about? Does he really think oil is $1.20/barrel?

I think he's saying $120 a barrel, not $1.20.

 

[Large Professor]

Why?

Investors are fleeing into 'real' assets such as oil because of the inflation they think the Fed is creating with its money printing (the ever growing balance sheet of the Fed).

Producers of oil want more US dollar for their product as the purchasing power of the USD is falling (due to money printing).

 

[bill0527]

Who cares if the price of gasoline doesn't go down? Producing more gasoline in the US means that we are less dependent on foreign oil and this is at least one good thing we can take out of drilling more.

Only if you make the people producing more gasoline in the U.S., keep the gasoline they produce in the U.S.

Are you ready to take a communistic step to make sure it stays here?

There's absolutely no reason to believe that the people producing it in the U.S. won't put it out on the worldwide market and sell to the highest bidder.

 

[thatbox]

Investors are fleeing into 'real' assets such as oil because of the inflation they think the Fed is creating with its money printing (the ever growing balance sheet of the Fed).

Producers of oil want more US dollar for their product as the purchasing power of the USD is falling (due to money printing).

Damn, you, Fed! Damn you for creating such high inflation!

 

[rpmurphy]

Drill baby Drill! More money NOW! Fuck green energy until the wells run dry and we can control it. Fuck off consumers who want cheaper gas.

Was that too serious?

Oh yeah I forgot about ANWR. Preserving 100% Natural Enviroments gettin' in the way of my money.

Green energy is just as much of a "solution" to the oil problem as drill-baby-drill. There is no magic pill that we can swallow and wake up the next day all better with sunshine and roses.

 

[Large Professor]

Damn, you, Fed! Damn you for creating such high inflation!

I'm not saying there is high inflation (yet). I meant to say that the Fed's actions are creating the perception amongst some investors that there is a risk of severe inflation.

 

[Black Mamba]

I'm not saying there is high inflation (yet). I meant to say that the Fed's actions are creating the perception amongst some investors that there is a risk of severe inflation.

that is is what investors who try to swindle people what others to think.

 

[LosDaddie]

It's alwAys a great joy of mine to ask these DRILL BABY DRILL republicans how they intend to keep all this new oil they want in the USA, for patriotic American use.

 

[bill0527]

I'm not saying there is high inflation (yet). I meant to say that the Fed's actions are creating the perception amongst some investors that there is a risk of severe inflation.

Haven't they been thinking that economy crippling inflation is coming since oh..around 2007?

Every year I hear about massive inflation since the summer of 2007 when I took my principles of investments course at college. They teach you in Econ and finance courses that one of the catalysts for a rise in inflation is having a monetary policy where the fed keeps putting money into the system, which in turn devalues the dollar. The theory is that the fed circulates more dollars which means banks can loan more money, therefore consumers can purchase more goods and services to keep the economy moving. The byproduct is that if consumers have more money to spend on said goods, supplies will go down, and demand goes up, so you end up with an increase in the price of goods and services - or the textbook definition of inflation.

We haven't had this sharp rise in inflation that the gurus have been predicting.

 

[SapientWolf]

Haven't they been thinking that economy crippling inflation is coming since oh..around 2007?

Every year I hear about massive inflation since the summer of 2007 when I took my principles of investments course at college. They teach you in Econ and finance courses that one of the catalysts for a rise in inflation is having a monetary policy where the fed keeps putting money into the system, which in turn devalues the dollar. The theory is that the fed circulates more dollars which means banks can loan more money, therefore consumers can purchase more goods and services to keep the economy moving. The byproduct is that if consumers have more money to spend on said goods, supplies will go down, and demand goes up, so you end up with an increase in the price of goods and services - or the textbook definition of inflation.

We haven't had this sharp rise in inflation that the gurus have been predicting.

That's because the demand for money is still low. They can increase the supply all they want but they can't force people to spend it.

 

[thatbox]

That's because the demand for money is still low. They can increase the supply all they want but they can't force people to spend it.

They can by raising inflation.