for oil experts

[baltimorened]

so oil is priced based on global markets.....why?

why can't we have one price for oil drilled in the US and a separate price for our oil that we sell overseas? other than it's always been this way?

Aren't drugs sold this way, we pay one price and Europeans, for example, pay a different one?

 

[dandeman330]

Because if I'm a company that's producing oil in the US and someone offers me more money for that oil then I'm going to sell it to them. It's a closer to a free market. Now shipping laws effect somewhat. It's one of the reasons gas in California is higher. They aren't allowed to get Gulf Oil due to the Jones Act.

The Europeans have price controls and the US has a free market with drugs in simplistic terms.

 

[nytigerfan]

so oil is priced based on global markets.....why?

why can't we have one price for oil drilled in the US and a separate price for our oil that we sell overseas? other than it's always been this way?

Aren't drugs sold this way, we pay one price and Europeans, for example, pay a different one?

oil drilled in the US and Venezuela and Iran is all very different. Different uses, different refining methods. Yokels who claim the US is energy independent or naïve about the types of oil, energy, etc., or what we need for what.

so the price variability is based on the type of oil. But if we have a disrupted source in the Middle East it’s not like that can just be easily replaced with oil from other parts of the world.

 

[PalmettoTiger1]

so oil is priced based on global markets.....why?

why can't we have one price for oil drilled in the US and a separate price for our oil that we sell overseas? other than it's always been this way?

Aren't drugs sold this way, we pay one price and Europeans, for example, pay a different one?

First I really know very little about oil pricing

That being said now I will demonstrate my ignorance

The big oil number the news keeps screaming is not the price oil is sold under long term contracts

My understanding is that is the spot price or price if you need to buy some extra oil to fill a contract. Requirement

For example let’s say you have sold all daily the 2 million barrels production from an oil field for $40 a barrel and you run short then you pay the spot price

That’s what drives me nuts as inventory valuation has the oil selling for $4.50 a gallon for example when they brought the gas into inventory at $2.00 a gallon

Gas is usually only sold at a small premium so I keep thinking why the huge price jump

Of course I am talking out my buttocks so please help explain to me how the oil companies manage the long term sales with the spot markets pricing

 

[baltimorened]

oil drilled in the US and Venezuela and Iran is all very different. Different uses, different refining methods. Yokels who claim the US is energy independent or naïve about the types of oil, energy, etc., or what we need for what.

so the price variability based on the type of oil. But if we have a disrupted in the Middle East it’s not like that can just be easily replaced with oil from other parts of the world.

I understand all that..but right now I keep hearing that we are producing more oil than ever before....plus we are now getting a few hundred thousand barrels/day from Venezuela. The cost to produce is the same now as it was prior to the Iran excursion. So that tells me the American oil companies are making a ton of profits. I'm not against profits, for sure.

Back in the late '70s - '80s, we imposed an excess profits tax on oil companies and I have seen some Democrat proposals to do it again now. In order to do that you'd have to set a case price in order to determine what is excess. So rather than tax, set the base price and pass that excess on to consumers in the form of lower gas prices.

 

[dandeman330]

I understand all that..but right now I keep hearing that we are producing more oil than ever before....plus we are now getting a few hundred thousand barrels/day from Venezuela. The cost to produce is the same now as it was prior to the Iran excursion. So that tells me the American oil companies are making a ton of profits. I'm not against profits, for sure.

Back in the late '70s - '80s, we imposed an excess profits tax on oil companies and I have seen some Democrat proposals to do it again now. In order to do that you'd have to set a case price in order to determine what is excess. So rather than tax, set the base price and pass that excess on to consumers in the form of lower gas prices.

 

[baltimorened]

first I like liz ann sonders. She's really sharp.

I guess then I'd have a couple of questions/statements, not that I discount her chart, why would we set our refineries to process the wrong kind of crude, and given this we really aren't energy independent, and we're more dependent on the strait of Hormuz than what we're being told.

After looking it up, you and Liz ann are right....seems as if we refine more from Mexico and Canada than what we do our own. there is a mismatch

thanks for pointing this out. I had no idea.

 

[dandeman330]

first I like liz ann sonders. She's really sharp.

I guess then I'd have a couple of questions/statements, not that I discount her chart, why would we set our refineries to process the wrong kind of crude, and given this we really aren't energy independent, and we're more dependent on the strait of Hormuz than what we're being told.

After looking it up, you and Liz ann are right....seems as if we refine more from Mexico and Canada than what we do our own. there is a mismatch

thanks for pointing this out. I had no idea.

Me either. I've followed her since she used to be on Wall Street Week w/Louis Rukeyser in the late 80s early 90s. She's extremely knowledgeable and I'm sure she has plenty of oil/gas experts that she can rely on.

Maybe those refineries were built in 70s when we relied more on foreign oil? Surprised that as we generated more oil in the US from the gulf and/or fracking more refineries weren't built to handle that type of crude. US Companies also don't want to reopen their Venezuelan refineries since they got burned when they were nationalized by Venezuela.

To add on reliance on Straits of Hormuz, I don't think we are but other parts of the world are and if they can't get their oil from there they go to other markets which drives the price up in those markets due to increase in demand. I do know a lot of the ingredients that we use for fertilizer comes through there which could become an issue for farmers at some point.

 

[nytigerfan]

first I like liz ann sonders. She's really sharp.

I guess then I'd have a couple of questions/statements, not that I discount her chart, why would we set our refineries to process the wrong kind of crude, and given this we really aren't energy independent, and we're more dependent on the strait of Hormuz than what we're being told.

After looking it up, you and Liz ann are right....seems as if we refine more from Mexico and Canada than what we do our own. there is a mismatch

thanks for pointing this out. I had no idea.

thank you for admitting this. The left leaning ones of us on this board have been trying to tell the MAGAs for years that the US is not truly energy independent (like Trump said we were in his first term). We are absolutely dependent on foreign oil, even if we produce more than we consume.

In response to your question about why we don’t have refineries that can produce our own oil… my understanding was that the US oil companies think that refining our own oil is too expensive and erodes profits. I cannot remember all the reasons why.

 

[dandeman330]

thank you for admitting this. The left leaning ones of us on this board have been trying to tell the MAGAs for years that the US is not truly energy independent (like Trump said we were in his first term). We are absolutely dependent on foreign oil, even if we produce more than we consume.

In response to your question about why we don’t have refineries that can produce our own oil… my understanding was that the US oil companies think that refining our own oil is too expensive and erodes profits. I cannot remember all the reasons why.

How much oil does the United States import (and why)?

About 60% of the crude oil that runs through U.S. refineries is extracted right here at home. However, our refineries run on many different types of crude oil, some of which we don’t produce here or can’t economically transport. In those cases, we use imports.

www.afpm.org

 

[baltimorened]

How much oil does the United States import (and why)?

About 60% of the crude oil that runs through U.S. refineries is extracted right here at home. However, our refineries run on many different types of crude oil, some of which we don’t produce here or can’t economically transport. In those cases, we use imports.

www.afpm.org

and supposedly most of that is imported from Canada and Mexico..shortly also venezuela

 

[ANEW]

and supposedly most of that is imported from Canada and Mexico..shortly also venezuela

We built refineries in the gulf primarily for Venezuelan crude to begin with. I believe.

 

[baltimorened]

We built refineries in the gulf primarily for Venezuelan crude to begin with. I believe.

well, seems like we got at least one right.

 

[Rastafarian]

Because if I'm a company that's producing oil in the US and someone offers me more money for that oil then I'm going to sell it to them. It's a closer to a free market. Now shipping laws effect somewhat. It's one of the reasons gas in California is higher. They aren't allowed to get Gulf Oil due to the Jones Act.

The Europeans have price controls and the US has a free market with drugs in simplistic terms.

CA has is higher because they have a different spec for gasoline.

 

[ANEW]

CA has is higher because they have a different spec for gasoline

Yes and to exacerbate that problem further, there is a different formula required in the summer.

Add to that ginormous state tax of about 0.60/gal. Other states are in the 0.20-0.40 range.

 

[baltimorened]

Yes and to exacerbate that problem further, there is a different formula required in the summer.

Add to that ginormous state tax of about 0.60/gal. Other states are in the 0.20-0.40 range.

Californians like paying more for things

 

[ANEW]

It’s pretty crazy that when you take away state and federal tax on gasoline, a gallon of gas would be generally less expensive, or at least comparable in cost with milk.

 

[TigerRagRob]

Because if I'm a company that's producing oil in the US and someone offers me more money for that oil then I'm going to sell it to them. It's a closer to a free market. Now shipping laws effect somewhat. It's one of the reasons gas in California is higher. They aren't allowed to get Gulf Oil due to the Jones Act.

The Europeans have price controls and the US has a free market with drugs in simplistic terms.

gas tax in Cali has alot to do with the price in Cali also. Not to mention the different blends of fuel due to local regulations. Also Cali wont build refineries so finished product has to be shipped in from other places which adds to the cost. A whole lot of self-inflicted wounds in Cali...

 

[TigerRagRob]

I understand all that..but right now I keep hearing that we are producing more oil than ever before....plus we are now getting a few hundred thousand barrels/day from Venezuela. The cost to produce is the same now as it was prior to the Iran excursion. So that tells me the American oil companies are making a ton of profits. I'm not against profits, for sure.

Back in the late '70s - '80s, we imposed an excess profits tax on oil companies and I have seen some Democrat proposals to do it again now. In order to do that you'd have to set a case price in order to determine what is excess. So rather than tax, set the base price and pass that excess on to consumers in the form of lower gas prices.

The oil from Venezuela isnt used for making gas and diesel. Its heavy crude which is high in sulfur.

• Venezuelan heavy crude is not ideal for making gasoline and other light products.
• It is much better suited for making asphalt, bunker fuel, and heavy industrial products.

 

[TigerRagRob]

CA has is higher because they have a different spec for gasoline.

I once read that we have like 40 different specs for fuel that the refineries have to produce for the country do to each states regs and we dont have enough refineries...

 

[TigerRagRob]

It’s pretty crazy that when you take away state and federal tax on gasoline, a gallon of gas would be generally less expensive, or at least comparable in cost with milk.

Gov bashed the oil industry for the money it makes, but they are the ones doing the work for pennies on the dollar profit. The GOV does zero work and makes even more profit from the taxes from it than the industry does...

 

[nytigerfan]

Californians like paying more for things

yep. Like how they pay for all the mooching southern red states that take more from the government than they contribute. Red states are welfare states.

 

[baltimorened]

yep. Like how they pay for all the mooching southern red states that take more from the government than they contribute. Red states are welfare states.

true, but isn't that the policy the democrats and republicans support? I would think that folks like Bernie Sanders and AOC would applaud the transfer from the have to the have nots...

I think that we'd be a lot better off if we got away from this robin hood approach to one where each state had to take care of itself...less federal taxes, the tax and spend, high debts etc...let the states decide for themselves what policies are important to their citizens and how much they're willing to pay for it.

 

[TigerRagRob]

https://www.marinetraffic.com/en/ais/home/centerx:-48.6/centery:32.2/zoom:4

 

[TigerRagRob]

yep. Like how they pay for all the mooching southern red states that take more from the government than they contribute. Red states are welfare states.

Dem voters

 

[nytigerfan]

Dem voters

you nailed it buddy. All poors on government assistance vote dem. All those trailer parks in the rural areas of red states wit Trump flags flying are secretly dem voters.

your stupidity is overwhelming. It offends me.

 

[firegiver]

Short story seems to be: Its a global market and shipping crude around the way it is today, is the most profitable for the energy companies, which operate at a global scale. They don't GAF about American crude independence or the middle class or any of that BS. They care about shareholder profit.

 

[TigerRagRob]

you nailed it buddy. All poors on government assistance vote dem. All those trailer parks in the rural areas of red states wit Trump flags flying are secretly dem voters.

your stupidity is overwhelming. It offends me.

most of the right are middle class. The left is made up from the extremes of the economic ladder. The very wealthy and the poor for the most part. You know, all those elitist leftist that think they are way smarter than everybody else, the same leftist that looks down their noses at people of color and think that we are too dumb to know how to get an ID, or how to used the internet, dont have computers etc. In your mind without you we would still be in huts rubbing sticks together. Hell without you leftist we would all be dead and we owe you for our very existence. Thats why you get so upset when we dont agree with you. Every single time one of us leaves the plantation it upsets you. How dare those brown people not follow your lead. I mean who do we think we are? The left will always be the party of hate and racism no matter how much projecting you do. Its a stain that you cant disappear...

 

[baltimorened]

Because if I'm a company that's producing oil in the US and someone offers me more money for that oil then I'm going to sell it to them. It's a closer to a free market. Now shipping laws effect somewhat. It's one of the reasons gas in California is higher. They aren't allowed to get Gulf Oil due to the Jones Act.

The Europeans have price controls and the US has a free market with drugs in simplistic terms.

@dandeman330 ...just saw a graphic of ships heading to the US for oil. I assume we're pumping enough but the chain is only as strong...do we have the capacity to pump from the land into the boats at a reasonable pace, or will we have a bunch just waiting their turn to be loaded?

 

[dandeman330]

@dandeman330 ...just saw a graphic of ships heading to the US for oil. I assume we're pumping enough but the chain is only as strong...do we have the capacity to pump from the land into the boats at a reasonable pace, or will we have a bunch just waiting their turn to be loaded?

I've seen that graphic. Here’s a good article from WSJ. The limit will be how ships can ports handle.

https://www.wsj.com/business/energy-oil/u-s-oil-blockade-is-set-to-boost-american-exportsand-prices-at-the-pump-005e1a70