Obama...Is He Telling the Truth?

[owequitit]

Oil is exchanged in the Commodities Market.
Supply is regulated by OPEC, (Organization of oil exporting countries) and demand regulated by a combination of "reserves" that certain countries maintain, and actual user demand.

What is missing from this equation (and what you see in the MSM) is refining.

Iran, for example, exports a lot of oil to other nations. That oil is crude, and is only good for certain industrial uses until it is refined. The US has a LOT of refineries, and deals struck between the government and the refining companies is one reason that the US has lower gas prices that the rest of the world.

Also, we use more gasoline than diesel, because gas is more refined than diesel. We have the refineries to produce gas, and it is cheap domestically. When we export our refined product out of the country, the oversees buyer assumes the payment of the export taxes, as well as our price offset, and gasoline is much more expensive for the importers.

The US (and other interests)have OPEC over a barrel, in that most countries that have oil as a resource, don't have the refineries to use it. They MUST export, in order to either get refined fuel, or get paid for their crude.

(On a side note, this in only one reason I don't think Iran is perusing a nuclear weapon. They would be cutting their own throats in the process.)

So, The O only has the power to put initiatives and regulations before congress. He cannot tell Exxon (or whoever)that they have to cut profits to provide the people with cheaper fuel. He must put a bill to congress. Creating those regulations, which if passed, would force oil corps to lower domestic price; would upset Nationalities who rely on our refined fuels, because their prices would skyrocket. (Those are a lot of 3rd world countries btw.)

The "reserves" the US has, which are supposed to be for Military use when shit hits the fan, could be opened to public use. That is within his power; But reserves would then be distributed to filling stations by the very companies that wouldn't cut their domestic prices/profits, and they would not do it as a service to the government, either. So in the end, we would pay either way.

The hypocritical part (not necessarily from you) is that when a Republican is in Congress, suddenly the President is in control of every facet of every market and is COMPLETELY responsible for the surge in prices (see the endless reports and complaining about gas prices when Bush was in office and this happened back in 2008).

Also, just a note about refineries, they are extremely high dollar investments, and what most people don't realize is that:

A) accounting for equipment downtime (maintenance, overhaul, etc.), we are at pretty much 100% refining level. This is one of the flaws in the drill baby drill mantra. Even if we could produce the supply, we couldn't refine it without additional capacity.

B) The problem with that is that legislation is such that it takes an oil company 15-20 years to clear the hurdles required to build a new refinery, which makes it cost prohibitive from a futures standpoint, and thus they are unwilling to invest in such infrastructure due to the high cost and uncertainty on return.

Also, I haven't done it in a number of years, but when gas was trending up in the early 2000's, if you actually calculated out the cost of crude and adjusted it for inflation, it was actually the same cost as several decades prior. The main component that had actually increased the cost of a gallon of gas was taxes.

[owequitit]

It's all bullshit and that is my opinion. We aren't fucking dumb unless you buy into the social media. How many years in a row do we see the gas prices go up during the summer? Every single year. I think the amount of people who drive during the summer isn't significant enough to drive the price up that much.

If they know every summer the demand jumps, why don't they start pulling more before it hits?

Refineries are more or less full tilt all the time, so there isn't anywhere to "pull" from. Thus, as demand fluctuates, so do prices. Plus, IIRC, the turn around time on a barrel of crude is nearly 3-4 months anyway from the time it is pumped to the time it is in your tank.

[Ralphie]

Man I don't know if it is just a coinky dink or a bird chirped in your ear, but boy am i glad to see some fresh posts from you Scott!!!!!

[owequitit]

Man I don't know if it is just a coinky dink or a bird chirped in your ear, but boy am i glad to see some fresh posts from you Scott!!!!!

I still check in mostly daily. I don't post much, unless I see something interesting or worth posting on. A little more active lately, because I am done with the classwork for my Master's and am just working on my thesis. However, I am so done with school right now, I haven't done much, and when I am "killing time" I stop by now and again.

That and I kicked my work schedule back a tad because the pace of the last year and a half was not safely sustainable, and I really didn't feel like becoming a statistic or an example.

[zack_odom]

Im happy to learn this stuff. Thanks alot Scott! I love discussing this kind of stuff. Be watching I wanted to discuss this movie I saw as well. I will be posting later when I get home from work. Hopefully you will see it, and then you can help set the record straight! I love how knowledgeable you and other people are on this site. Its so awesome. I also like the way you respond specifically, with such grace, and eloquence. Im in a good mood now.

[Ralphie]

I still check in mostly daily. I don't post much, unless I see something interesting or worth posting on. A little more active lately, because I am done with the classwork for my Master's and am just working on my thesis. However, I am so done with school right now, I haven't done much, and when I am "killing time" I stop by now and again.

That and I kicked my work schedule back a tad because the pace of the last year and a half was not safely sustainable, and I really didn't feel like becoming a statistic or an example.

Oh congrats on finishing your masters!

Ya smart move!

I still post here and there but not half as much as i use to lol.