Political pump prices?????

[Soonerdawg]

Thank you Bill for a very well written and reasoned post. I will read your link.

[Soonerdawg]

Sooner, shame on you...you gotta know I wasn't talking about the learned...I was talking those liberals that piss on the fire at Cub Scout jamborees!

OPEC can most certainly manipulate oil prices but ecause they have such a hard time agreeing on anything, they lose their pricing clout. The single biggest driver for gasoline is capacity, not oil prices. Capacity (or lack thereof) creates supply-demand problems during peak driving periods or when there is a disruption (like Katrina and Rita), which results in higher gas prices. Capacity is also affected by the boutique fule blends that some states and metro areas have; if there were only 5 or 6 blends versus the 20+ out there, capacity would increase by about 4%. The increase comes from the reduction in refinery downtime associated with the different "runs" associated with the fuel making/blending process.

Where's DogTor Evil when you need him?

Thank you for the clarification. Your post was immediately following my post. My wife is mad at me tonight (I'm not sure why) so I think I was a little paranoid.

Thank you for the explanation. Your industry is far more complicated than laymen like me realize. I note there are sometimes two prices for oil on the futures market, but they only talk about the one floating at about $70 per barrel. There is another much, much lower price quote. I am assuming that is for the lower grade crude. You and Bill have inspired me to learn much more about how these prices work. I don't have a good oil stock in my portfolio right now, I need one, but I don't want to invest until I am much, much, much more informed.

For what its worth, I've narrowed down my search to Valero and Conoco/Phillips. Valero certainly has a lot of refining capacity and can refine the lower grade crude. That refining capacity may be the moat Warren Buffet is always talking about. In any event, it will be several more weeks before I will feel comfortable enough to by the stock, and then I will have to wait for the right time to get in.

[Soonerdawg]

Now, for anyone who really wants to dig into this subject, there is an excellent report by George S. Ford, PhD, of the Phoenix Center for Advanced Legal and Economic Public Policy Studies just published, entitled, "An Investigation into the Influence of Retail Gas Prices on Oil Company Profits." Policy Paper No. 26

It's a very detailed and objective analysis of just what the title says. You can access it at

www.phoenix-center.com

I'm found the cite, but am having problems finding the Policy Paper.

[champion110]

Thank you for the clarification. Your post was immediately following my post.

Sooner,
You MUST be paranoid. You should have known he was talking about me.

For the record, I am VERY happy about the oil price dropping a little. Any drop is a good drop. I just agreed that it was suspect. If the shoe were on the other foot, well... you know the answer to that. :icon_wink:

[PawDawg]

I don't have a good oil stock in my portfolio right now, I need one, but I don't want to invest until I am much, much, much more informed.- Soonerdawg

Give Missy Setters a call. I hear she is peddling.

[CARTEK]

Be very careful buying integrated or independent oil, oil service, or related services right now. They saw a significant run up over the past 24 months (I can personally attest to that fact) and are in a bit of a funk right now. Even with my company's stock...many of us see it at 55, and we can also make an argument that it goes to 30! I need it to go to 55+ for about a week, then it can do as it pleases!

[Soonerdawg]

Be very careful buying integrated or independent oil, oil service, or related services right now. They saw a significant run up over the past 24 months (I can personally attest to that fact) and are in a bit of a funk right now. Even with my company's stock...many of us see it at 55, and we can also make an argument that it goes to 30! I need it to go to 55+ for about a week, then it can do as it pleases!

After reading this post, it is clear that I am nowhere near ready to invest in the oil companies. I will keep studying for now. I will also proably have a lot of questions. I don't invest in anything I don't fully understand.

[Bill Pup60]

I'm found the cite, but am having problems finding the Policy Paper.

Sooner...

Go to the site home page and scroll down a bit. You wil come to a big red box. The first article in the box is the paper I referenced. It's available as a pdf and as a doc. I used the doc and had no trouble downloading and copying it.

there's a lot of detail in there and it does cover Valero and some of the "refining only" type companies. There's a big diference in how crude prices affect the refiner only segment versus how they affect the integrated companies. And of course , crude prices affect the integrateds in different ways, too, depending on how their mix of crude production and refining and marketing stack up. MIght help you make up your mind.

Considering how the giants like Exxon-Mobil and Chevron have a long history of continuous and healthy dividend payments ( even when crude prices are low ) added to their steady equity growth, it's hard to find a better long term investment.

My portfolio is very very heavily skewed to my own company's stock and I have stuck with it over the years. I have been constantly "advised" to diversify more and in many cases to get out of oil. When I get this advice, I just write down the analyst "expert" choices and occasionally go back and compare how I"ve actualy done versus what the "experts" wanted me to do.

So far, I'm still batting a thousand!!! And some of my compemorary colleagues -- who did get on the analyst bandwagon -- have lost their asses!!!

[Soonerdawg]

Sooner...

Go to the site home page and scroll down a bit. You wil come to a big red box. The first article in the box is the paper I referenced. It's available as a pdf and as a doc. I used the doc and had no trouble downloading and copying it.

there's a lot of detail in there and it does cover Valero and some of the "refining only" type companies. There's a big diference in how crude prices affect the refiner only segment versus how they affect the integrated companies. And of course , crude prices affect the integrateds in different ways, too, depending on how their mix of crude production and refining and marketing stack up. MIght help you make up your mind.

Considering how the giants like Exxon-Mobil and Chevron have a long history of continuous and healthy dividend payments ( even when crude prices are low ) added to their steady equity growth, it's hard to find a better long term investment.

My portfolio is very very heavily skewed to my own company's stock and I have stuck with it over the years. I have been constantly "advised" to diversify more and in many cases to get out of oil. When I get this advice, I just write down the analyst "expert" choices and occasionally go back and compare how I"ve actualy done versus what the "experts" wanted me to do.

So far, I'm still batting a thousand!!! And some of my compemorary colleagues -- who did get on the analyst bandwagon -- have lost their asses!!!

I kid you not, there is no big red box. It just isn't there, and I really, really want to read the article. Could you post a direct link to the article?

If you don't mind disclosing, what company are you with? If you don't want to post it on the public board, would you mind giving it to me by pm?

I wan to thank you and Cartek again.

[Dawgbitten]

No one will ever convince my that big oil companies do not place bottlenecks in the supply chain. The only way a company selling a commodity item can grow is a) grow with GDP because the demand is inelastic. Not the favorable choice b) manipulate supply

The excuses of how and why the supply is short varies tremedously. One day it is refining capacity. The next it is production. The next day is China's demand. It all reminds me of the California energy crisis a few years back. We found out there was no short supply at all and the same excuses were used during that time as well.

Cartek, you can be an asshole and call me stupid or ignorant, I don't care.

[Spinoza]

There are some awfully dumb MF on here! please go back and look at gasoline pricing trends for the last 20 or 25 years...they almost always trend down about this time of year after rising early in the summer. This year it is more pronounced because demand has been lower (higher prices mean less driving), no significant storm has moved through the Gulf (no wells shut in), and the speculation based on Middle East issues has somewhat moderated.

Opinions are great and just like belly buttons...everybody has one. Facts and history...are generally irrefutable but that rarely gets in the way of a liberal trying to piss on the fire at a wennie roast!

I was more than content to just toss out this thread and wait for what I consider would be "the obvious" up to and after election day results......

But Cartek's posts have amused and interested me on several levels.

1) "There are some awfully dumb MF on here!"
Sounds like some real name-calling to me.
Makes me wonder where WWDog has been of late with his dissembling agenda.
AND then there's that "dumb" word...... Am I the only one who noticed that Mr. Cartek used the plural verb "are" with the singular MF to indict unspecified others on this board as "dumb"?
Probably just a typo...... But even I might resort to a tad more effort, if I ever opted to drop a "dumb" reference with any hope for expected ethos.

2) "they almost always trend down about this time of year"......
While I'm not an alleged BIG OIL EXPERT like Cartek......
Nor a purported (yet unspecified) BIG OIL exectutive like Cartek......
I could not help but notice Cartek's use of the words "almost always" and "about" in referencing his "this time of year" statement.
Even I know that traditional pump price drops often occur AFTER the Labor Day weekend......
But not throughout A FORTNIGHT OR MORE, BEFORE THIS TRADIONALLY HECTIC HOLIDAY DRIVING PERIOD ACTUALLY ENDS all that funny and costly summer driving nonsense.
AND...... I also know that that the referred to post Labor Day price fluctuations, have virtually never represented anything close to a 10% reduction in pump prices for the average consumer/November voter.
Perhaps Cartek has some HONEST/FACTUAL charts at hand if he would care to dispute the above with anything more that his admitted BIG OIL bias?

3) "This year it is more pronounced because demand has been lower.
Not only is this a BOLD FACE LIE...... It is a LIE from an individual who represents himself as a BIG OIL EXPERT to this board.
Am I the only poster here who routinely watches CNBC or any other news source?
As pump prices and BIG OIL PROFITS have dramatically increased over the last election time frame...... Am I the only poster here who has CLEARLY AND REPEATEDLY HEARD that American fuel consumption has not faltered one iota despite the dramatic increase in pump prices?

[Spinoza]

There are some awfully dumb MF on here! please go back and look at gasoline pricing trends for the last 20 or 25 years...they almost always trend down about this time of year after rising early in the summer. This year it is more pronounced because demand has been lower (higher prices mean less driving), no significant storm has moved through the Gulf (no wells shut in), and the speculation based on Middle East issues has somewhat moderated.

Opinions are great and just like belly buttons...everybody has one. Facts and history...are generally irrefutable but that rarely gets in the way of a liberal trying to piss on the fire at a wennie roast!

4) "No significant storm has moved through the Gulf"......

Cartek gets an A+ for this bit of Monday morning DAH? wisdom.

But the best premise for my election day scenario......And the worst news for Cartek's rosy little george/big dick/BIG OIL pump price reality...... Would be one hell of a big Mother Nature (that's MN not MF) storm with significant havoc throughout all those supposedly fragile and necessary Gulf oil platforms and refineries

As previously stated......

I'd relish such a MOTHER OF A STORM/HURRICANE...... WITH NO LOSS OF LIFE OR PERSONAL PROPERTY DAMAGE......
Just major oil rig platform destruction and refinery chaos anytime between tonight and elelection day.

If Vegas had a political line on any such reality...... I'd be willing to bet a goodly portion of my personal worth plus every cold beer in my fridge, that political pump prices would SOMEHOW manage to remain stable through election day...... OR EVEN CONTINUE TO DROP until all the little george votes were eventually counted.

Time will tell relatively soon.

As stated previously...... I have no problem whatever just kicking back and watching any eventual little george/BIG oil machinations.

[Spinoza]

There are some awfully dumb MF on here! please go back and look at gasoline pricing trends for the last 20 or 25 years...they almost always trend down about this time of year after rising early in the summer. This year it is more pronounced because demand has been lower (higher prices mean less driving), no significant storm has moved through the Gulf (no wells shut in), and the speculation based on Middle East issues has somewhat moderated.

Opinions are great and just like belly buttons...everybody has one. Facts and history...are generally irrefutable but that rarely gets in the way of a liberal trying to piss on the fire at a wennie roast!

5) "Speculation based on Middle East issues have somewhat moderated"......

Are you referring to the increasing number of dead forever and wounded in Iraq with every passing little george day in the oval office?
The virtually meaningless UN intervention between Israel and hezbollah TERRORISM?
The increasing-every-day profile of a more and more militant Iran with a little george shiite government now firmly established in Iraq.
Syria promising to stop the shipment of arms to hezbollah TERRORISTS?
OR...... Something ONLY YOU KNOW because your job title is something above janitor at some undisclosed BIG OIL FIRM somewhere on this planet?

[Spinoza]

There are some awfully dumb MF on here! please go back and look at gasoline pricing trends for the last 20 or 25 years...they almost always trend down about this time of year after rising early in the summer. This year it is more pronounced because demand has been lower (higher prices mean less driving), no significant storm has moved through the Gulf (no wells shut in), and the speculation based on Middle East issues has somewhat moderated.

Opinions are great and just like belly buttons...everybody has one. Facts and history...are generally irrefutable but that rarely gets in the way of a liberal trying to piss on the fire at a wennie roast!

Given what you have offered this board to date......

I would suggest that opinions are more like anal orifices than belly buttons..... Where honest facts and real history never get in the way of some vague BIG OIL employee who is obviously more than over invested in some glimpse of a vague fiscal reality...... Rather than serious questions and anwers UNDER OATH, should the republican shield of BIG OIL evaporate come November.

[Spinoza]

After reading this post, it is clear that I am nowhere near ready to invest in the oil companies. I will keep studying for now. I will also proably have a lot of questions. I don't invest in anything I don't fully understand.

I may be Cartek "dumb"...... But I doubt it!

Just in case you have not noticed much for nearly six years.....
If you have managed anything close to a 6 to 8% return via your stock portfolio from the first sad day that little george entered the oval office...... You may now count yourself among the luckiest investors alive in America.

Honest and simple CASH tonight will earn you and your lovely wife more than a certain 5% return at this real investor moment.

OR...... If you opt to continue betting on little george......
You may have a statistical prayer for something approaching an 8% return.
But is is more likely that any little george investment you opt for now will yield less than 3%...... Or NOTHING...... OR LESS.

Just MNHO!