Gas price whiners

"Michael Johnson, PE" > wrote in message
...
> You need to learn marketing 101 regarding supply and demand. If you
> don't increase supply or decrease demand you will not effect the price.
> You evidently don't know that the companies other than Exxon and Mobil
> will RAISE the price of their gas due to the increased demand. Exxon
> and Mobil won't have to lower their prices at all because they will have
> the lowest price by default. Plus, where do you think these small gas
> stations get their petroleum products? It is from the big companies.
> The big boys will make money regardless. If you want to lower the price
> of gasoline then increase the supply and/or lower the demand. It's real
> simple.
>
>
Well yes and no. My Master's thesis (The structural determinates of gasoline
shortages in the US by PAD's) in 1974 following the supply crisis of 1972/3
examined a multitude of variables. Interestingly, the only statistically
significant variable that explained price changes in the study was market
share. This may not be true today and may explain why there is little if any
difference in price between the majors in any given market area. Attempts to
buy market share by lowering the price is immediately matched by the
competition. Market share today is probably driven by marketing hype ( my
additives are better than yours).

Another thing about gasoline production. IIRC when you refine that barrel of
crude about 60% of the distillate will be gasoline leaving the balance for
all the other distillates and the crud (bunker and asphalt). I'm not sure
but that may mean that the internal combustion engine will always be needed
unless another viable use for gasoline is found.

--
Richard

'94 GT 'vert
Under Drive Pulleys
Transgo HD2 Reprogramming Kit
High Stall Torque Converter
4:10 Gears
Gripp Sub Frame Connectors (welded)
FRPP Aluminum Drive shaft
FRPP M5400-A Suspension
Laser Red

In California, when a refinery goes down, the law of supply and demand
continues. So, if one less refinery is providing product, this would
tend to indicate less supply, with continued stable to increasing
demand. The price rises. I have heard that refineries tend to process
at maximum prior to shutting down in order to stockpile while off
line. Seems like here (Calif) the refineries don't plan to shut down.
They have fires, and other breakdowns which are "unexpected".

The crude produced in the Gulf of Mexico right now is facing similar
circumstance. Many of the rigs were damaged and output to refineries
is greatly reduced. According to differing reports, this could account
for between 17 and 24% of US usage. And it is estimated that is may
take several months before everything is back to full capacity. That
is going to decrease supply, even if demand remains stable, so prices
will rise.

One of the oil company heads stated that he does not believe that the
price per barrel can be sustained at $70, or $60, or even $50 per
barrel. That the price must come down or the world faces a major
change in societal structure. Then he said that he has been wrong
before.



On Tue, 30 Aug 2005 12:23:11 -0400, ZombyWoof >
wrote:

>On Mon, 29 Aug 2005 22:49:50 -0700, Quiet Desperation
> wrote:
>
>>In article >, Michael Johnson, PE
> wrote:
>>
>>> Who, or what, is responsible for it?
>>
>>It's the traders on the oil markets reacting to world event. For
>>example, the hurricane today has caused several refineries to be shut
>>down. That drove the price sike past $70 per barrler. And you don't
>>just start those refineries up in one day when the sun comes out again.
>>
>For some reason I just can't wrap my pea brain around why a refinery
>being shutdown would cause the product they consume to go up. Logic
>would dictate that it would go down as it is not being consumed while
>the refinery is shut down. Also, refineries have a finite capacity to
>convert oil to gas. Once that capacity is reached they can't consume
>any more oil to convert. If the wells are still pumping it out and
>the refineries are at maximum, where the hell is all the crude going
>to go (yes I know other markets), but it is our refinery capacity more
>then anything else that impacts supply & demand for refined fuel.
>
>>Everyone is always looking for a conspiracy, but the truth is pretty
>>much right out in the open. Futures markets and global demand (China,
>>as Rich said, being a big factor).
>>
>>Sorry, folks, but there really are no secret global cabals (or at least
>>none worth spending any brain cells on). Civilization is sort of boring
>>that way.

Spike
1965 Ford Mustang fastback 2+2 A Code 289 C4 Trac-Lok
Vintage Burgundy w/Black Standard Interior; Vintage 40
16" rims w/BF Goodrich Comp T/A gForce Radial
225/50ZR16 KDWS skins; surround sound audio-video.

Gad what fools these morons be....
Children are obscene but should not be heard
Give me a peperoni pizza... or give me a calzone!

On Mon, 29 Aug 2005 23:08:11 -0700, Quiet Desperation
> wrote:

>In article >, dwight
> wrote:
>
>> If you want to blame the Chinese for the rise in gasoline prices OVER THE
>> PAST TWELVE MONTHS, then I would remind you that China existed for a few
>> years before that. Their industry did not rise up whole in that short span
>> of time.
>
>No, but their demand for imported oil has. This has been pretty widely
>reported.

Maybe they are stockpiling it. Part of the Great Plan. Force the enemy
to spend more than it can afford, until it's system collapses under
it's own weight. Sounds a bit like what happened to the USSR.
>

>No magic. No governemnt agendas. No secret cabals. Just natures and
>people being wasteful and/or stupid.

I dunno about that. Those space aliens out at Area 51 might be doing
something sneaky....
>
>Personally, I think it's a bubble. It may spiral as high as $90 or
>$100, but I think it'll eventually fall back to the $20 to $30 range
>again as things easr in Iraq & Venezuela and the weather calms down and
>the investors begin to bail like they did from the tech stocks.

One of the cable news shows interviewed one of the oil company heads,
and he didn't go as low as $20-30, but he did say he didn't believe it
could be sustained at even $50.
>
>But China and India ain't goin' anywhere...

Spike
1965 Ford Mustang fastback 2+2 A Code 289 C4 Trac-Lok
Vintage Burgundy w/Black Standard Interior; Vintage 40
16" rims w/BF Goodrich Comp T/A gForce Radial
225/50ZR16 KDWS skins; surround sound audio-video.

Gad what fools these morons be....
Children are obscene but should not be heard
Give me a peperoni pizza... or give me a calzone!

In article >, ZombyWoof
> wrote:

> For some reason I just can't wrap my pea brain around why a refinery
> being shutdown would cause the product they consume to go up.

Futures markets react when someone in Ulan Bator sneezes. Go figure.

Personally, I think part (not nearly all) of the problem is the
4,423,452 different "blends" of gas that are all over the country.
You drive up to a pump these days, and you will see 87, 89, 91, 92
octane. Unless your owners manual says so, 99.9% of the vehicles
produced today run perfectly (and are designed) to run on 87 octane.
That, and the blended fuels that the enviromentalist, and EPA have
forced on consumers in different parts of the country have effectively
screwed up the supply delivery of fuels across the country. If there
is a "surplus" of gas in the upper midwest, and a shortage of fuel say
in southern California, the excess cannot be piped through the
nationwide pipeline distrubution system because it isn't "compatible"
with their blend.
THANKFULLY, the head of the EPA wednesday, put a temporary stop
to that and mandated that the fuel blends won't matter until the
current "crisis" is over (it's set to expire on Sept 15th).
Yes, I think part of the "suv" craze might be coming to an end. Heck
the bulk of these vehicles are never driven in 4WD, or off road
anyway. part of this has to be the "keep up with the Jones" mentality
of the population. Do I think SUV's should be outlawed...nope...I
just think it's silly to have one, but I won't stop someone from
owning one if that is their choice. I'm sure that europe is laughing
that we are finally paying "our fare share" since our gas has been
cheap, compared to europe. I think that we as a nation missed our
chance in the 70's to become independent of the mideast oil, but
rampant enviromentalism wacko mentality stopped it. Maybe we can
tell the tree huggers and snail darter idiots out there that we should
come first. Heck, even if and when we have (as they like to put it)
an enviromental "disaster", we clean it up better than anyone in the
rest of the world. We are sitting on tons upon tons of oil...but we
can't pump it out of the ground. We haven' built a refinery plant in
almost 30 years in this country because of the "not in my back yard"
mentality of the public. Maybe that can end to. Too much political
correctness and wacko envromentalism are mostly, but not all of
where the blame should be.



>Well yes and no. My Master's thesis (The structural determinates of gasoline
>shortages in the US by PAD's) in 1974 following the supply crisis of 1972/3
>examined a multitude of variables. Interestingly, the only statistically
>significant variable that explained price changes in the study was market
>share. This may not be true today and may explain why there is little if any
>difference in price between the majors in any given market area. Attempts to
>buy market share by lowering the price is immediately matched by the
>competition. Market share today is probably driven by marketing hype ( my
>additives are better than yours).
>
>Another thing about gasoline production. IIRC when you refine that barrel of
>crude about 60% of the distillate will be gasoline leaving the balance for
>all the other distillates and the crud (bunker and asphalt). I'm not sure
>but that may mean that the internal combustion engine will always be needed
>unless another viable use for gasoline is found.