QUOTE (markb @ Aug 30 2005, 12:27 PM)

I bet you dollars to donuts W is making a buck or two off of oil.

My apologies, that was a political statement and does not belong on this forum. I'll delete it.

The last new oil refinery in the US was built in 1976 IIRC. Since that time the total number of refineries in the US has fallen by about 40% as most of the very small independant refineries closed down in the 80s and 90s due to very low or non-existant profits. The only ones to survive were the ones that could afford to get big enough to ride out the lean times. The remaining refineries expanded and improved production to make up for most of the lost capacity.

I worked for one of those small refining companies from 1986 to 1995 when they closed the doors and laid everyone off. They tried for 7 years to get enough capital to start it back up but they couldn't get anyone to finance it. For the last year and a half they have been tearing it down to build tilt-up warehouses. Talk about bad timing.

Building a new refinery wasn't economical up to this point because old refineries that were in financial trouble could be purchased for 10 to 15% of the cost to build a new one. Valero is a perfect example, 10 years ago they had one refinery. Now they have around 14. Most of em were purchased for between $250 and $500 million each. At the time that was a lot of money because profits were so low, today it seems incredibly cheap.
As refining continues to be profitable it will be much more difficult for a company to buy an existing refinery, then they will start considering building a new one which

BTW it will cost about $5 billion to build a new modern refinery with a capacity of around 200,000 bbls/day (middle sized). It would have to be RREALLLLLLY profitable to justify that kind of an outlay in a declining market.

but where would they put it? NIMBY.
It has to be close to a shipping port unless they want to pay a $billion to build a new pipeline or two. It should be near populous areas but relatively far away from competitor's refineries to be most profitable.
Aint no way that Mexifornia will allow a new refinery in the San Francisco area or in the LA basin, so that leaves the gulf coast or the east coast or Washington. I don't think Washington will alow a new refinery to be built on their unspoiled landscape. They don't want Exxon valdez. Maybe I'm wrong. I do know lots O'folks up there don't like the refinery in Anacordes.

The San Francisco tree hugger groups are doing everything they can to close down the Tesoro Golden Eagle refinery in Avon because of their less than stellar accident rate. Lawsuits up the ying-yang ever since it was owned by Tosco, then Ultramar, then tesoro. Public record.
Bay area gas prices are already sky high, I wonder how high they would go if the environ-'mental' (yuk yuk) lawyers manage to close down Tesoro Avon?

It won't do that much good to put another refinery in Louisiana or around Houston or Texas city, lots of em now and that market is typically depressed when compared to the rest of the country. Hard to make money where the competition is concentrated, and it costs money to ship the product to the rest of the country.

Canada? Maybe, but the politics are tough.

There has been plans for years to build a new refinery in the Yuma, Ariz area, so far it is all talk and environmental lawsuits unless something new has happened recently that I haven't heard of. Someone is trying to build it, someone else is trying to stop it and so far doing a darn good job.

If it were up and running now the gasoline would be cheaper in So Cal, ariz, NM, and maybe West Texas.
Thank the environmental fanatics and their lawyers next tiem you fill up.

Bottom line is this: we are using oil and gasoline as fast as we can make it and it is just going to get worse. We will eventually get by with less and less until it is so expensive only the wealthy will be able to afford it. We won't have a choice anymore.
How fast that happens will depend on how long we continue to use it up like it's going out of style.

By then I won't care, I'll have paddles on my row boat on the lake in front of my retirement home

At what point does the cost of fuel make your 914 impossible to sell?

QUOTE (brer @ Aug 30 2005, 01:32 PM)

At what point does the cost of fuel make your 914 impossible to sell?

A long time after all those SUV's and mommy vans have bit the dust.

When nobody has any money left after buying a tank full of that "adjusted for inflation" gas unless you buy some of those shares talked about up the page. Can imagine how the folks along the coast havoc cotton to these ideas.

Corporate managers tact spilling like the Valdez on here. If you work for hourly wages, hit the streets as Americans wanting a piece of the American pie too. Do it all together, tomorrow, in UNION fashion demanding wages based on hourly "adjusted for inflation, inflated gas" prices. Work both ways you should know. Your families needs to eat too, not to mention other essentials like affordable shelter.

QUOTE (brer @ Aug 30 2005, 12:15 PM)

No more profit to pursue in that area which is why the white house is giving them money. To make exploration economically attractive.

July 29th 2005 : Washington Post: ...Profit from worldwide oil and natural gas EXPLORATION and production operations jumped 28 percent, to $4.91 billion. Production decreased 4.3 percent, to 3.91 million barrels a day.

This was before the Bill was signed.

QUOTE (Sammy @ Aug 30 2005, 11:36 AM)

That is in part why I am invested in independant oil companies and not the majors.

As Exxon posted 44% profit in March 2005 from the previous year, the stock closed down $.38 to $58.



OK, if that happened in the Tech Sector, the stock would have increased signifigantly.

they went from just under 6% profit last year, to just over about 10% profit this year. that's the 44% increase they are talking about.

Oil company stocks traditionally don't react as strongly to what happens today as other sectors do, they are driven more by what will happen in six months. Much of it is fairly easily predicted based on projected costs, supplies, and demands. Sure some things can upset the apple cart but most of the time the driving indicators are fairly stable.

Refining stocks are usually driven by projected crack speads which is the difference in price between crude oil and he finished product that is derived from the crude.

At least that is how it all worked until the recent imbalance in supply/demand started factoring in, much of which is influenced by China's sudden thirst for oil.
Since that started the oil sector has become much more volatile but the majors like XOM are still more stable than the independents.

QUOTE (AndyC @ Aug 30 2005, 12:10 PM)

[QUOTE=zouo,Aug 30 2005, 03:55 PM] Dan[/QUOTE] Taxation. [/QUOTE] You're not kidding! Its a double screw as well fuel duty and VAT not to mention the road fund licence so make that a triple screw just to get from A to B Rant over Andy

We had that problem, once... a very LONG time ago.



M

Oil is not drying up for a while.

The problem is that we are running a refining deficit, that compounds daily, globally, seasonally, with, and without conflict, and it's a sign of the times, the rampant 'over exuberance' (I didn't say unfounded) in the contract buyers market.. and well..

You can thank people like Sammy!



Has anyone checked the Sammy Seal © Market lately? RUBBER! OMG! SamDustries LLCTD just posted a 400% increase in month over month, and said they'd beat the street by at least $1,903.18 per share!


M

Hmmm, sounds like I need to invest in SammySeals!

hmmm, Sounds like miles needs a little sleep (or is that me.... Yeah). G'night poppa.

Buy oil stocks and drive a car that gets 50 mpg. Thats what I did. I tend not to whine as much about greed and supply since I did that.

Whooooo Hooooo!
Valero VLO just broke $100 a share! It's gonna split again, I can feel it.
I made about $20k on it since I posted about Valero yesterday

If everyone could do me a favor, please buy great big ole Hummers and leave them running 24 hours a day. I don't feel like being at work today and want to retire as soon as possible.
For the first time, the greed and selfishness of the human race is working for me instead of against me.

EDIT: Correction, it's now at 102.02 and climbing and I am a mindless ticker machine

EDIT AGAIN: 108.45 and still climbing That's a 12% gain today and 20% this week. I can live with that.

Good for you Sammy... its probably due to the mis-fortune of Katrina. Many prices for raw materials and basic needs will probably skyrocket. You should invest heavily in Home Depot too. You are a fine capatalist!

Watch it Sammy! The tide is getting tricky.


M

QUOTE (Sammy @ Aug 31 2005, 06:39 AM)

Whooooo Hooooo! Valero VLO just broke $100 a share! It's gonna split again, I can feel it. I made about $20k on it since I posted about Valero yesterday If everyone could do me a favor, please buy great big ole Hummers and leave them running 24 hours a day. I don't feel like being at work today and want to retire as soon as possible. For the first time, the greed and selfishness of the human race is working for me instead of against me. EDIT: Correction, it's now at 102.02 and climbing and I am a mindless ticker machine EDIT AGAIN: 108.45 and still climbing That's a 12% gain today and 20% this week. I can live with that.

I have owned and continued to buy Chevron stock since 1970 when my grandfather gave me 10 shares for a birthday present. Plan to retire on those babies!