Bodman: Supply Issues to Blame for Prices

[NVMojo]

WASHINGTON (AP) -

U.S. Energy Secretary Samuel Bodman pinned soaring crude oil and gasoline prices on supply issues Friday, and said the switch to ethanol may cause prices may climb higher.

Bodman, departing Saturday for the International Energy Forum meeting in Qatar, was quick to state that short-term solutions weren't forthcoming.

more...

http://www.lasvegassun.com/sunbin/stories/invest-corp/2006/apr/21/042107671.html

[TAPat]

1. Seems that I'm just having one word to say these days...

asshole

[NVMojo]

2. yeah! Asshole in QATAR!!!!!

[Warpy]

3. It's a switch FROM gasohol, you mean

because areas like this one, a city in a valley, use gasohol to decrease winter smog problems.

That's the excuse, anyway. The truth is that the refineries are awash in stored gasoline. They're just trying to get us to stop bitching about their buddy George. They're just trying to teach us a lesson.

[PublicWrath]

4. refineries have been cutting back gas production,

they've been using the spring changeover and maintenance
as an excuse to reduce production more than usual for this
time of year. Even a tiny restriction in gas production
allows huge profits to be reaped on top of (and in addition to)
the high crude prices.
Price manipulation. Period.

[TexasLawyer]

6. Technically , that's a "supply" based price effect

as in-- where's the supply?

-- Sorry, we're hiding it. Whoa-- look at the price go up.

That's one of the ploys used by Enron-era electric power marketers selling into the California market.

[PublicWrath]

7. Here's something on CA gas in particular.. what bastards

California Refiners Export Gasoline as Prices Zoom Statewide: Price Manipulation Charged By Consumer Advocates

4/21/2006 2:42:00 PM


SANTA MONICA, Calif., April 21 /U.S. Newswire/ -- A consumer group called on state legislators to respond to new state government data showing oil companies are slowing production and exporting supply to drive up the price of gasoline. The Foundation for Taxpayer and Consumer Rights (FTCR) called on legislative leaders and the Governor to immediately consider regulation of the state's refiners by the public utilities commission and pass legislation returning windfall profits to motorists via rebate.

-snip-
Although inventories are very slightly above the level this time last year, the week-to-week production cut and the switch to more export gasoline inevitably pushed market prices higher, in tandem with rising crude oil prices.

"Oil companies as usual cite dubious unplanned shutdowns or 'routine maintenance' as their reason for restricting the supply of gasoline in California, but the switch to export, in the face of gasoline prices rising well over $3.00 for regular in many locations, is completely indefensible," said Judy Dugan, research director for FTCR. "This is classic price manipulation. Only by providing a generous supply of gasoline in the state could refiners help to stabilize these unaffordable prices. Their intent is clearly the opposite."


The refineries' drop in production comes on the heels of an April 18 report from FTCR, by independent oil industry analyst Tim Hamilton, that most of the increasing price of gasoline is pure profit for the refiners -- that the price of crude oil justifies less than a quarter of recent price increases, even before the latest price spike. Read the report and news release at: http://www.consumerwatchdog.org/energy/pr/?postId=6133
........

[ClintonTyree]

5. Hmmm...

winter is over, there's no need to supply people with heating oil, the yearly summer driving "crisis" isn't even close yet, more wells are coming back on-line almost daily in the Gulf of Mexico, Bush has "jawboned" the Saudis, they're at "full" capacity......where the hell did the shortage come from all of the sudden. It wouldn't be a MANUFACTURED shortage now, would it? :eyes:

We HAVE to get these oil-men out of the damned White House and as long as Bush is in it the White House IS damned. Our entire COUNTRY is damned! :grr: I'm so fucking pissed off at Bush and his money grubbing pals I can't see straight. :silly:

[TexasLawyer]

8. Exchange rates

One price factor that is often left out of the conversation, but is almost as important as supply and demand, is the role of the US economy (and specifically the strength of the dollar) in setting crude oil prices.

The buying power of the dollar is seriously eroding vis a vis other currencies. (Blame US Budget deficit, balance of trade deficit, bad tax policies, etc...) If Saudis sell oil in today's dollars, they need to sell it for 40% more than they did 5-6 years ago just to be even with what they used to get for their crude in un-eroded Clinton-era dollars.

(Castles in Germany and Patek Phillippe watches for the Saudi Princes are sold in Euros, you know.)

Domestic producers get a windfall when the international price for crude drifts upward. Their production costs aren't necessarily increasing, but their sales price can increase to reflect the going price of crude on the international market.

The US imports approximately 30% of the crude it consumes. The remaining 70% domestic supply gets the float up to the international price. Goody!!! (for them, that is).

http://www.eia.doe.gov/oiaf/aeo/pdf/overview.pdf

[TexasLawyer]

9. U.S. inventories at 8 YEAR HIGH

so you know this supply explanation is not the full one.

Oil Settles Above $70 a Barrel, Despite Inventories at 8-Year High
By Bhushan Bahree in New York and Ann Davis in Houston

Word Count: 1,527
April 18, 2006

Crude oil closed above $70 a barrel for the first time, highlighting a phenomenon reshaping the petroleum world: Investment flows into oil futures are supplanting nitty-gritty supply-and-demand data as prime drivers of prices.

In contrast to past bull markets in crude, this year's run-up has occurred even though oil inventories in the U.S., the world's largest market, have swelled to their highest levels in nearly eight years.

http://online.wsj.com/google_login.html?url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB114532452352528310.html%3Fmod%3Dgooglenews_wsj

[TexasLawyer]

10. Refiners say don't blame high prices on us

April 18, 2006 04:49 PM US Eastern Timezone
NPRA Comments on Senator Schumer's Statement on the U.S. Refining Industry

WASHINGTON--(BUSINESS WIRE)--April 18, 2006--NPRA, the National Petrochemical & Refiners Association, today issued the following statement on Senator Schumer's (D-NY) comments on refinery capacity and gasoline prices.

<snip>

"In addition, the FTC has directed or participated in several studies over the past five years on the subject raised by Senator Schumer. The results have been unanimous: a variety of market-related factors are responsible for high prices, and the practices of the refining industry are not among them. Lastly, refiners have steadily expanded capacity at existing facilities over the last decade, the equivalent of adding a new refinery each year. Also, plans to increase U.S. capacity by over 1 million b/d have been widely discussed by the industry in public forums, including the press. In short, the U.S. refining industry is hard at work doing its job -- providing a steady supply of petroleum products for the nation's consumers, even under difficult conditions."

NPRA is a national trade association with more than 450 members, including most U.S. refiners and petrochemical manufacturers.

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060418006123&newsLang=en

[William Seger]

11. "...the FTC has directed or participated in several studies..."

Well, if Bush's FTC didn't find any problems, that's good enough for me! After all, we know that Bush demands nothing less than honest, objective analysis from ALL the departments under his administation...

[sandnsea]

12. Bush threatened to nuke Iran!!

For fuck's sake, that is why oil prices soared. Can they not tell the truth about any damned thing.

[Trajan]

13. Blame ANYONE but US !

Amazing how this eely, oily, unctuous bunch of slime balls REFUSE to assume ANY responsibility for governance ....

This is THEIR watch .... This is THEIR moment in time .....

It is NOT the fault of the common american citizen that the marketplace does NOT have viable alternatives to these sources ... It is NOT our fault that fuel producers have not properly prepared for changing market conditions in a timely manner ....

This is the plan for them: use whatever laws exist to create scarcity; like Enron laughing as it shut down generating stations for 'maintenance' .....

EVERYTHING is going according to THEIR plan .... which is to ramp up profits by the fucking boatload for the friends and accomplicies of the GOP ....

The champaigne glasses have not stopped clinking in Texas for many months now ...

[0007]

14. The plan

IOW You suck em in and I'll suck em off