droll,
The government limiting the oil companies is a terrible idea that has been floating around the internet. The last thing the market needs is our government trying to "fix" it. The reason refined oil is being exported is because we have capacity. Period. That is a good thing. If, for some reason, the output of US refineries were to be pulled from the global market - guess what happens? Yup, global prices shoot up. The answer to the current spike in prices is to calm the markets with realistic plans to increase supply. That means opening up currentlly prohibited spaces to exploration, increasing the potential supply of oil, driving the price down. Simple.
Simple? Not as simple as you make it sound or this would not be a problem.
The problem is the volatile nature of oil and gas throughout the world economy and has become a form of economic warfare. If we continue with the status quo we will just be like sheep being led to the slaughter.
Prices constantly fluctuate for unknown, unjustified reasons, and in most cases, simply because a speculator/expert says prices are going up, is enough to trigger the price hikes. Years ago it was supply and demand, now its any political situation in the world that some speculator can link to the petroleum market, no matter how vague the connection. We need to be able to control our economy from within and not be forced into and economic market based on incidents we have little or no control over and concentrate on those we can control
TrainTrac
I'm betting that probably the most significant reason it's cheaper in other OPEC nations is that those oil producers don't have anywhere near the compliance costs for production in the form of a myriad of Federal/State/Local permits, EPA, OSHA, DOE, & other regulations, taxes, etc. that are incurred by US energy producers. And make no mistake about it: Those compliance costs are passed on to the consumer.
All of those costs are currently built into the cost of each gallon of gasoline and diesel fuel. I not saying we should only pay 25 cents a gallon, I am say that we should limit the way prices fluctuate for refined oil products made here in the US, and not be forced to pay higher prices because the refiners can make more money shipping the gasoline and diesel fuel overseasand hurting our economy.
Most of the gas & diesel that's exported probably couldn't be sold here in the US anyway. There are several different "boutique blends" of gas sold throughout the US based on state/local laws & regulations, and also additives based on Federal requirements (ethanol for one, thanks to the farm lobby). And some of those additives are seasonally-based. That's the main reason that refineries shut down and re-tool twice a year. Again, a case of over-reaching gov't regulation driving up the cost of a product.
Not entirely true. There are actually well over 200 different blends of gasoline based on requirements set by Federal, State, and in some cases, individual Counties and Cities have specific blend requirements.
Refineries make their most profit when they are working around the clock, 24 hours a day.Keeping the refineries going 24/7 allows them to make refined gasoline at the lowest possible cost.and of course they can sell excess overseas at even higher profitsagain, I have no problems with that.
The best way for us to bring down the price of oil (and everything produced from it) is to increase our domestic production. Consider that no new drilling permits have been issued in the Gulf of Mexico since the BP accident, no new permits have been issued on Federal-owned land in the last three years, no new refineries have been built in the US in over 30 years, and the plethora of gov't regulations make it expensive as hell to do business in the oil industry.
I agree and major steps are being taken to do increase our domestic oil production. I have even read articles by some oil experts who claim that US is very close to being completely independent of foreign oil???? (sounds like a lot of BS to me) but it will be of little benefit if it is simply sold overseas at the global market prices. I understand that nearly all the oil coming from Alaskas North Slope is being exported to Japan.
Also, your point about the Mutual funds owning 53% percent of the oil stocks really is pointless. Oil company stocks are very slow growth. When Exxon was making $10 Billion a quarter in profit, they were putting most of that money back into the company and share holders got like $1.15 in dividends and very marginal increases in the stock prices so the shareholders did not get rich. If anyone thought they would lose money investing in Oil company stocks they can change their investment strategies.
And the fact that you are talking about Mutual Funds, indicates that they are picking a very diversified portfolio of stocks for their investors (probably not more than about 2%-5% in petroleum stocks) and they are constantly changing the mix and amounts so that a down turn in one segment of our economy does not necessarily bring down the entire Mutual Fund.
The simplest solution would be to implement some sort of rationing system of say 100 gallons per month for every legally registered car or truck. The would allow people to buy up to 100 gallons of gasoline per month at a discounted price. This makes gas price hikes from preventing people from getting to work. After the 100 gallons of discounted gas are used, then you pay the full retail pump price. Let the rationing go for 3-6 months and see if the economy improvedIf it did, keep it going for another 6 months and check again. If it did not improve the economy, just cancel the program and go back to everyone paying the full price for gasoline.
If you wish to continue this discussion then move it to the off-topic board
Rich
