Opec President Sees No Problem With $60 Oil

[eolesen]

Jim, you're absolutely right that capacity has increased at the existing refineries, but it doesn't change the fact that the refining capability within the US is now concentrated into the hands of a few players who are just as good at limiting production as OPEC is.

 

[jimntx]

The great majority of the refining capacity has ALWAYS been concentrated in the hands of a few of the majors. The large refineries that were closed were owned and operated by the majors. The others were marginal producers. Texaco closed at least 3 of its refineries during the 80's and 90's, and it closed/sold the Getty refineries whose territory overlapped a Texaco refinery.

 

[NeedForSpeed]

Unfortunately the President of the USA doesn't see anything wrong with $60 a barrel either.

[post="243925"][/post]​

Useless post.......The President Of the United States has NOTHING to do with the price of oil!!!!! Get over your Kerry loss, and your bitterness, and better yet, educate yourself as to how politics/the government work! GOOD DAY!!!!!

 

[SpinDoc]

Useless post.......The President Of the United States has NOTHING to do with the price of oil!!!!! Get over your Kerry loss, and your bitterness, and better yet, educate yourself as to how politics/the government work! GOOD DAY!!!!!

[post="244189"][/post]​

The price of a gallon of regular at your local
filling station still comes down to the greedy
SOB's who control the refineries. If they
increased refining capacity and put more
gasoline and kerosene into the market, the
price would come down to the appropriate
levels to stimulate the overall economy.

They just refuse to do it because they like
the profits from an artificially low supply of
refined petroleum in the U.S. End of story.

If I could fully express my disdain for the
fokkers who control our refined petroleum
products in the U.S., most of their CEO's
would be tied to a chair in a very cold room
for many hours with a loaded weapon
pointed at their heads. This would continue
until they came to their senses and did the
right thing by increasing refining and
lowering their prices. Call me crazy, but
I hate it when monopolistic corporations
screw things up the way they have for
the past 3 years.

 

[Pacemaker]

Assuming industry fundamentals remain unchanged you will see all but Southwest either in BK or teetering on the edge within 18 mos. The current administration is not going to be amenable to government subsidies or re-regulation.

Could cabotage be the ultimate solution? The American public is already conditioned to buy their furniture and appliances from China; what about a ticket to fly to Disneyland?

Hopefully a remedy - removal of excess capacity or falling fuel prices - will prevent such a doomsday scenario. But given the choice between Amtrack Airlines or Dragonair, I think you'll see the latter before you see the former.

 

[Boomer]

If the problem were really the refinery capacity, why have the US airlines under the banner of the ATA not vertically integrated and either purchased or developed a refinery system for the airlines?

Given the access to the capital markets that such a move would allow, vertical integration into ownership of the refineries would benefit both the travelling public and the airlines in the same way that the creation of ARINC was allowed by Congress.

 

[JS]

If the problem were really the refinery capacity, why have the US airlines under the banner of the ATA not vertically integrated and either purchased or developed a refinery system for the airlines?

Given the access to the capital markets that such a move would allow, vertical integration into ownership of the refineries would benefit both the travelling public and the airlines in the same way that the creation of ARINC was allowed by Congress.

[post="244355"][/post]​

Probably because 1) it's expensive, and 2) you can't just produce jet fuel and nothing else. If I were an airline, I wouldn't want to get into the business of petroleum refining. Let someone else do that.

Something else to consider is that if there were a conspiracy to cut refinery capacity, anyone with the capital (which would not be the airlines) could have built their own refineries and made lots of money selling oil products.

Even OPEC, which is blatantly honest about the fact that they are a cartel and collude to hold down production to prop up prices, cannot avoid the temptation of competition in its member countries cheating on their quotas.

 

[mweiss]

They just refuse to do it because they like
the profits from an artificially low supply of
refined petroleum in the U.S. End of story.

Nice story. Here's reality...they don't increase capacity because the cost of doing so without violating the pollution controls is too high. It's cheaper to refine the stuff elsewhere and import it as finished goods. With demand for petroleum products shooting up in Asia, the price is going to continue to rise. This shouldn't come as a shock to anyone.

Whether or not it makes sense to change the pollution controls is for a different discussion. I'm not going down that path.