Discussion in 'Fly Fishing Forum' started by jhaquett, May 12, 2007.

  1. gt

    gt Active Member

    yes tim, i simplified the example. of course demand varies by season in this country. the simple point i was making is that the price we see today in THIS country is the direct result of market manipulation by the oil and gas industry. the SUPPLY has been dramatically limited by taking refineries off line at exactly the time of the year demand increases.

    the supply side economics you are refering too has been debunked by many noted economists, over and over again, no need to rehash all of that retoric. what we the consumers are up against is an industry that controls all of the strings at this point so there is zero option at the moment except pay the price.
  2. Gary Thompson

    Gary Thompson dirty dog

    Does anybody know if it did any good yesterday.
    It seemed like the traffic was a little lighter going to and from work.
  3. ChrisW

    ChrisW AKA Beadhead

    Its open- and loaded with pike minnow...good fun on a four weight, for about 30 secs anyway.

    Oh and I drove there with biodiesel is that OK?

  4. Cactus

    Cactus Dana Miller

    You're waisting your breath Tim! gt would just rather believe that some faceless "corporation" is "screwing" him than face the facts. I have asked him twice "when should the refineries do maintenance if now is the "peak" demand time"? But he can't answer that question. No, it's all because "raygun" deregulated oil prices! I wonder what he was blaming "raygun" for 8 years ago when the price of gas was under a dollar?

    He refuses to look at the fact that there have been something like 30 government investigations, by both Democrats and Republicans, that show no manipulation or collusion of prices for gas.

    Of course, when the price drops in July and August (the TRUE peak driving season) as they did last year, all of these conspiracy subscribers will be silent. And when the next recession hits and oil prices crumble, they'll probably blame the auto makers for conspiring to lower gas prices so they can sell large cars. Probably even advocate a higher gas tax to RAISE the price of gas to cut consumption.

    It's so much easier to blame someone else for our troubles than accepting our own part and working to resolve them.
  5. gt

    gt Active Member

    the fuel you buy today was refined months ago. THAT is the issue here, limited supply! it is limited because of refinery shutdowns! when should they do maintenance? before the demand is what it is today. the 'investigations' have looked at price fixing and colusion, pretty damn hard for anyone to prove in a court of law. but, enron fell, so there is hope. did i cry when the gas and oil industry was making a buck a gallon, of course not, who did?????

    from todays pi:


    perhaps, if you stop to read and understand you will come to realize that deregulation was just the beginning. it took several decades to slowly solidify a position and put the consumer in the fix we are in today.

    so, cactus, explain why the billions of dollars in profit if all of this is simple supply side economics.
  6. Snake

    Snake tryin' not to get too comfortable

    It's messed up that the Fed (Federal Reserve Board, that dictates interest rates in the USA) doesn't count energy (ie petroleum and gas) or food costs into the Consumer Price Index (CPI), so all the economic indicators continue to look rosy. Meanwhile, consumers get screwed by Big Oil.

    Better lube up and get ready to take it harder, 'cuz it's just gonna get worse. :hmmm:
  7. Cactus

    Cactus Dana Miller

    It's not! Supply side economics is something totally different that generally addresses tax policy.


    What explains it is The Law of Supply and Demand! Demand is high and the supply, due to limitations in extraction and refining capacity, is high. Therefore the oil companies can charge more and people will pay it. If you don't like it, quit buying gasoline; enough people do that and the prices will fall. Or extract more oil and build more refineries and the price will also fall.

    You STILL haven't told us when demand for oil is low and refineries should do maintenance. You seem to know all about the secret price manipulations of the oil companies that even experienced investigators can't find; it should be simple to give us the dates of the lowest demand for oil!
  8. gt

    gt Active Member

    gee cactus, let me provide a bit of background since you don't seem able to read the links i have posted for yah.

    the supply of refined product was typically held at 16-18 weeks the year around. what we now see is a refined product supply of 6-8 weeks. this is not due to shortage of crude oil, increased extraction prices, lack of transport to refineries, demand from developing countries or any other reason under the sun save one: the petroleum industry discovered that by limiting the refined product, they could manipulate pricing.

    as i have pointed out, pretty straight forward and zero to do with supply side economics, which is a myth in its own right.

    now when can you do maintenance without impacting the refined product supply? well just about never at this point. that, of course was one of the primary reasons there was a 16-18 week of refined product in the 'pipelne', to account for maintenance, disruptions caused by illegal invasions, nature disasters and so on. but, that got in the way of obscene profits as i would call billlions per quarter, in fact all time record profits this world has never seen.

    but of course the boys at enron, ahhh, ohhhh, i mean the boys in the petroleum industry are all above board and really thinking about the customer at heart. its only the conspiracy theorists who have this totally incorrect.

    carry on.........tired of trying to explain the simple facts in our shared pain at the pump.
  9. gt

    gt Active Member

    for anyone interested in reading one of those 'useless' congressional reports, this one pretty well summarizes the current state of affairs and how we got to this point in time:


    it is interesting to note, in historical perspective, that JFK actually viewed the gas and oil industry as a critical industry for the security of our country and was about to set about controlling supply nationally. this is perhaps the one and only solution to the present set of circumstances but that's a total pipe dream with the Gas and Oil Party still holding veto power.
  10. Tim Garton

    Tim Garton Member

    gt... I don't want to seem overly combative and I apoligize for my earlier post that was needlessly harsh. You make some good points. But, I think they are incorrectly narrowly focused on some domestic oil conspiracy. I DO think there is a shortage of crude and I DO think is has to do primarily with an increased international demand for crude. That, coupled with our limited and aging refinery capability and no incentive or ability to build new ones until 2002 (when oil companies began to show a profit, according to the business section of the Seattle PI last Wednesday) means that as long as demand exceeds production anyone, in any industry, will raise their prices. I think you need to cast your net a little wider (a fishing analogy makes this semi-FFR :) )

    PS: I like to see some actual numbers (and maybe you links provided them... I don't know... I've been very busy and have only so much time to do in depth research) on what these "record profits" entail. If I made a buck last year and two this year that 100% profits but it doesn't mean I'm flush.

  11. 509

    509 New Member

    it is interesting to note, in historical perspective, that JFK actually viewed the gas and oil industry as a critical industry for the security of our country and was about to set about controlling supply nationally. this is perhaps the one and only solution to the present set of circumstances but that's a total pipe dream with the Gas and Oil Party still holding veto power.[/QUOTE]

    I think every President viewed the gas and oil industry as critical to the security of the country. The history of WWII showed that Germany and Japan felt the same way.

    My guess is that JFK was going to "control supply nationally" to protect oil and gas profits. In the 60's the US oil production was being threatened by the influx of cheap oil from overseas. So I'm pretty sure that Kennedy and the southern Democrats....(remember LBJ) were concerned that the US oil industry was going to be destroyed by cheap imports.

    One of the things that I learned in college was to be sure to understand historical events in the context of that day......not in the context of today's issues.
  12. 509

    509 New Member

    We own a few shares of BP. I checked its performance against the rest of the stock investments which are fairly conservatively invested.

    BP Everything Else

    2003 24% gain 29% gain

    2004 21% gain 16% gain

    2005 13% gain 21% gain

    2006 8% gain 18% gain

    2007 so far 7% gain 9.4% gain

    I keep thinking that one of these days BP will out perform the general market. Everybody keeps talking about the obscene profits, but it is not being reflected on the return on investment.

    The oil company profits have not been reflected in the stock prices. The increase in the stock prices
    is due to increased corporate profits.

    So why is everybody upset about oil company profits....ah, because they see the price posted everyday. And because every American thinks they have a god given right to cheap gasoline!!!

    I think Maria should start a federal program that provides oil company investors with at least the return on the S&P 500.
  13. gt

    gt Active Member

    if you have the time, i suggest you click on the last link i posted and read and learn. i know i have refined my point of view as a result of senator wyden's efforts.
  14. 509

    509 New Member

    Senator Wynden is not the sharpest tool in the shed.

    The quotes were from 1995 and 1996 when the refining industry was literally going out of business. Articles in Barrons highlighted the issue during those days, but nobody was paying attention. Least of all Wynden. As late as 2000 BP was shedding workers to insure that they could make money with oil at $11 per barrel. Nobody cared about closing refineries during those days....they were an environmental problem not a economic problem.

    You need a environment where companies make money, but have enough competition to insure that prices remain low. The problem is that most politicians are clueless about economics and journalists reporting in the mass media have even less knowledge. Which leads to a society where conspiracy theories abound and the need to face problems is shunted off into shouting matches.

    I quit reading mass circulation newspapers, watching TV news, except as entertainment or gathering information on the delusions of society. The real news is in the Wall Street Journal, Barrons, and other financial reporting.

    In the spring of 2001 the Bush Administration proposed an energy policy for this country. Was quite an interesting document. They even posted it on the White House web page. The reporting was that it was a sell-out to energy companies. I don't think any reporters in the mass media even read the report. There was stuff in there that looked at the stability of the electric grid. When the mid-west and east had the grid go down a couple of years ago.....it was not a surprise. Except for those that do not pay attention.

    There are no simple solutions to the energy mess.....the problem is that we have not taken any steps to resolve the mess.

    Thank god, that the market economy tends to do that on its own. Unless we screw that up.
  15. Tim Garton

    Tim Garton Member

  16. gt

    gt Active Member

    your diatribe is duly noted. however, you failed to address the substance of senator wyden's report findings.

    the date of the report is only relevant if somehow the conclusions have been overwritten by time passing. unfortunately, as we all now know, senator wyden was exactly on target. THAT would make him a bit sharper of a tack than you would make him out to be. character assination of the messenger has become a favorite tactic of some when the message being delivered actually brings the light of day to an ugly issue. but the tactic has worn out its newness and is recognized for what it is by most folks.

    the issues raised in the report remain and if anything have accelerated. this has nothing to do with a 'free market' economy. it has everything to do with corportate market manipulation with a single goal in mind, screw the customer, make obscene profits. still pretty straight forward. the cleverness is in 'how' this has been accomplished. but just like enron, something will surface to torpedo this whole empire.
  17. 509

    509 New Member

    Sorry about the comment about Senator Wynden. However, he is the Senator that in the middle of the invasion of Yugoslavia did not know the location of Bosnia. I always got the sense about him that it is about politics and not public service.

    The oil companies made some bad decisions in the late 1990's and given political developments since then it lead to the creation of the current situation. In the late 1990's the refineries were losing money and everybody was looking for ways to get out of the business. That and $11 a barrel oil lead to the major oil companies laying off people, cutting back on exploration, and generally cutting costs.

    What they missed was Nigeria and Venezuela going left. The fact that most national oil companies do not have the expertise to manage their fields and as a result oil production is dropping in those countries. The demand for oil from China.

    Even in the early years of this decade as oil prices started rising most oil companies believed it was just a temporary blip similar to the early 70's and early 80's. Remember both those times the oil companies got badly burned as prices dropped. The question these days...is peak oil theory correct??
    Is this going to be another temporary blip or the end of oil?? My guess is that it is the latter...given the demand from India and China and America's probable withdraw from overseas entanglements.

    It is always easier to blame somebody else. Oil companies made some bad decisions. The last two Presidents and Congress have also made bad decisions. Bush's mistake was that he didn't push hard enough for his energy program in 2001. Congress was just plain asleep at the wheel, since the problem was NOT NOW. Clinton was to busy partying and selling oil reserves to Al Gore's favorite oil company.

    Go to the library and do a search on oil companies and refineries in Barron's for the latter part of the 1990's. It was a different time, but the seeds of todays mess were sowed with the low prices then. Likewise, the high prices today will lead to lowering of demand.

    Really when you come down to it. Individually, we cannot influence the national debate much. But individually our economic decisions change markets and prices. If you do it first you reap the economic benefits much more quickly than your neighbors.

    People need to drop their commute mileage. Quit buying low mileage vehicles to commute to work. Quit using oil and natural gas to generate electricity. Start practicing conservation. It works everytime in lowering prices.
  18. Cactus

    Cactus Dana Miller

    While it may be true that some oil refineries have been closed (there can be MANY reasons for closing a refinery unrelated to "market manipulation"), refinery capacity in the U.S. increased 8.5% between 1995 and 2003. http://www.eia.doe.gov/emeu/aer/txt/ptb1109.html

    The trouble is that fuel usage by vehicles increased over 18% in the same time! http://cta.ornl.gov/data/tedb25/Spreadsheets/Table2_09.xls So whatever Sen. Wyden's conclusions were they are not applicable to the current situation and they certainly offer no evidence of "market manipulation".

    At the time Sen. Wyden found these refinery closures, the oil companies were loosing money due to the low price of gasoline. It's foolish to continue to produce fuel only to sell it at a loss! There are two ways to raise prices to a profitable level; increase demand or reduce supply (here's that tricky law of supply and demand again). The oil companies really have no ability to increase demand so they reduced their excess refinery capacity. As 509 alluded to, they may have miscalculated the future needs and reduced their refinery capacity too much.

    I'm surprised to see you railing about a tactic you seem to revel in, ie: "raygun"!

    As a ten year average, profits have been anything but "obscene". The fact that an essential commodity such as oil returns a lesser profit on investment than a frivolous consumer good like Starkbucks coffee indicates anything BUT obscene profit! Without a reasonable return on their investments, people will sell their oil company stocks and the companies would go under. What do you think would happen to the price of gasoline then???

    Funny thing about conspiracies, they are almost impossible to keep hidden; Enron's fraudulent practices were discovered within a couple of years of occurance. Politicians and journalists have been attempting to prove market manipulation by oil companies for more than 10 years and haven't found a scintilla of evidence to support it. No matter how corrupt the organization, there are always honorable people involved that will reveal the conspiracy.

    The only thing out there is conspiracy theorists such as yourself with a religious like conviction of some great criminal conspiracy and a lack of knowledge of market forces!
  19. Kevin J. Burnham

    Kevin J. Burnham Active Member

    Cactus/509, I enjoy the common sense and logic you bring to this topic. Thanks !!

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