Posted on 09/24/2005 5:39:14 AM PDT by ex-Texan
Foreign minister says there's a shortage of refineries, not oil, and prices should fall about $20 a barrel
As a second hurricane in less than a month threatened U.S. oil production in the Gulf of Mexico, Saudi Arabia's foreign minister said crude oil is about $20 a barrel above where it should be, given world supply and demand.
Prince Saud al-Faisal said in an interview with The Associated Press in Washington that there is no shortage of oil and that prices should stabilize at $40 to $45 a barrel. He said a big problem with energy markets is a shortage of refineries in the United States and elsewhere. He noted that two refineries are being built in Saudi Arabia. "We are adding barrels of oil on the market," Prince Saud said. "It has no place to go."
A U.S.-based analyst said, however, that it was hard to envision so dramatic a decline in the price of crude oil from the current low- to mid-$60 range in the foreseeable future. * * *
(Excerpt) Read more at newsday.com ...
The Prince needs to "fess up" to reality. Middle East Arab countries are using oil as another form of extortion. In effect, high oil prices are a form of economic jihadism. Just my opinion, people. Please hold your flames.
The futures for oil six months out were running about that level at one time. Not sure what they are now.
Clever. There goes the quest for "alternative fuel."
Shortage of Refineries???
Can't be... Why here in California we have a new refinery being built every 5 years... oh, wait... lemme take that back... we haven't build one in 20.... never mind!
More refineries will not increase demand, simply better supply the demand that exists.
More demand causes increased efforts to improve supply
More supply does not cause increased demand
I seriesly doubt anything the Saudis say and agree with FreePaul below.
The Saudi's are afraid we WILL be drilling our own oil.
Even at that range it still pays to look for alternatives. My general breakpoint price for that to occur is $32.
But what we really need is a stable price. No way to do it in a market driven commodity, but if everyone could be assured that it wasn't going to drop to $11 a barrel it'd encourage alternatives much more than anything else. Of course when it drops to $11 a barrel nobody bitches.
I don't see how the Middle East is ever used as the bench mark for dropping or raising the price of oil. Considering the fact that we do not get the bulk of our oil from there.
According to this report and one that I recently read in Time magazine, we get 0.23 percent of our oil from the Persian Gulf. The rest comes from other countries. We only get around 15% from Saudi Arabia. The largest percentage of oil that we get from one single country? The US. Somewhere around 42% according to Time magazine. Our own companies control the price of oil.
(the link to the spreadsheet is down the page of this old Urban Legend--scroll to the paragraph marked ORIGINS and look for the highlighted word "figures"....click on it:
It will bring you to an updated report from eia on imported crude oil, etc...)
http://www.snopes.com/politics/gasoline/saudigas.asp
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No, that is not true in this case. It is a speculative bubble created by high-roller investors driving the price of oil up, up, up with no rationale.
There is plenty of oil. There is a shortage of refineries, but this does not affect oil prices, it affects gasoline prices.
No arguement from me, but no matter how much they charge, we always pay it. Same old story, refineries blame oil availabilty and the oil producers blame the refineries.
They raise the price because they know we will pay it.
From the twinkle in his eye & between the lines, one got the impression we will always have "just enough" refining capacity.
It's not a problem, never has been, never will be in this 3 card Monty with the world's second most plentiful liquid.
I realize that we would never make such a claim. But I am shocked that a Saudi Prince would admit oil prices are too high.
On another note, when I posted my comments that building more U.S. refineries -- I was just repeating comments posted by other FReepers. Whenever I posted news reports about 'Peak Oil,' dozens of posters claimed that new oil refineries would solve the problem. Why? Because the oil companies have not built any refineries since about 1976. Dozens of others argued refinery capacity does not impact pump prices at all. Others argued that increasing refinery capacity would increase demand, thereby raising pump prices. Well . . .
What is the correct answer?
Frankly, I think the whole oil supply system need to be investigated. U.S. consumers deserve to know what is really going on. Why are pump prices a minimum of 40 cents higher in Oregon than in Washington, just a mile across the river? Why are companies importing gasoline from Mexico, made with cheap labor, and selling it here for the highest prices in the U.S.? What is really going on with the oil supply system? Does anybody really know?
they'll drop the price asd iraqs oil comes on market
"Greedy speculators?" It's the free market.
It's extortion all right. But not as clear cut as it may first appear.
The larger the reserve of dollars they possess, the more of our debt they can purchase.
It's a back door tax increase.
See my # 14 and comment, please. Yeah, they are very rich and very greedy. Time to eliminate all the profiteers, speculators and 'get richer, quicker' types. What say you?
Americans want high prices for energy. They have expressed this wish by electing representatives who impose high costs on oil exploration and refining, even outright bans on doing so.
The FTC is currently investigating the oil companies. Don't know how much good that will do to bring prices down, but it is an investigation.
Again, so-called "speculators," I couple of whom I know personally, are trading oil as they would any other commodity.
The problem -- as it was explained to me -- is that we are now at capacity. This is like taking a string and stretching it very tight. The tighter you stretch it, the more easily it transmits the slightest vibration. With oil, the slightest disruption in the supply chain transmits through the entire system.
If this is true -- and it very well might be -- then we're going to see damatic swings in price far into the future as capacity increases by small amounts and demand continues to stretch the string tighter.
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