Posted on 04/07/2008 8:52:00 AM PDT by Tolerance Sucks Rocks
First the good news: Automotive expert Ed Wallace says there's no gasoline or oil shortage in the U.S. today and near-record reserves are on hand.
Now the bad news: Not only has the congressional mandate for ethanol jacked up the price of food, but Washington, Wall Street and fuel producers all want you to think the gas and oil shortage they keep talking about is real.
Washington, Wallace says, appears to be protecting oil speculators and ethanol producers rather than the interests of U.S. citizens who will ultimately pay higher prices for food and U.S. farmers, who are already staggering under increased animal feed costs.
Just one example: Pilgrim's Pride, the countrys largest poultry processor, recently announced it must lay off 1,100 employees, close one processing plant and six of its 13 distribution centers, all because its costs for chicken feed went up $600 million last year and was on track to increase by even more this year.
"They see speculation in the market, I see decline in global inventories, Energy Secretary Sam Bodman told Bloomberg, adding that pushing up the prices of corn and animal feed for farmers is "nowhere near as important as trying to relieve pressure on [gasoline] supplies.
The fact is, Wallace counters, that U.S. gasoline reserves are at their highest levels since the 1990s and have risen steadily since last October and oil reserves have gone up virtually every week this year.
Thats pretty amazing when you consider refineries have been scaling back production as their profit margins decline.
According to Valero Energy CEO Bill Klesse, poor margins in recent months caused Valero to cancel planned refinery expansions that would have produced 500,000 more barrels per day.
"Refiners cut gasoline production, yet gasoline reserves have grown to their largest since late 1992, Wallace comments. "Why is Washington insisting theres a supply and demand problem when none exists, and that speculators arent responsible for the rapid oil and gasoline price rises when its clear that they are?
Gas prices continue to rise even though petroleum usage has been declining since last July.
The U.S. used 4 percent less petroleum this January than in January 2007. Oil demand dropped by 3.2 percent in February. Worldwide oil production rose 3.5 percent during the first quarter outstripping growth in worldwide demand by 1.5 percent and is expected to increase by 3.3 percent during the second quarter by as much as 4.1 percent during the third.
Investment in oil futures, Wallace notes, has risen from $9 billion in 2000 to $250 billion today. Any publicly traded company with $241 billion more share investment would see its value soar even if it had no where near that much in market cap.
In addition, even though the dollar has dropped 30 percent since 2002, the price of oil has risen by 500 percent.
"Is it the weak dollar that has caused a 500 percent increase in the price of oil, or is it the extra $241 billion worth of speculation? Wallace asks. "You can make the call on that one.
© NewsMax 2008. All rights reserved.
PING!
There is no shortage. This is Peak Oil. Production and consumption have never been higher, which is the salient charactistic of a peak. There is scarcity, which is a technical term meaning the price of the commodity is higher.
I saw the build up of stocks as the oil companies making preparation for a large amount of work being done.
So what happened to supply and demand?
Is the system broken, or do the oil comapnies truly have us bent over?
It is also a characteristic of continued growth.
Peak oil?
Poppycock!
Now you sound like one of the greenie-weenie whackos.
“”Why is Washington insisting theres a supply and demand problem when none exists, and that speculators arent responsible for the rapid oil and gasoline price rises when its clear that they are?
Because many of those in Washington ARE FUNDED BY the speculators who are making profits off of lying to you.
World demand of oil continues to grow.
Short-Term Energy Outlook, March 11, 2008 Release
http://www.eia.doe.gov/emeu/steo/pub/contents.html#Global_Petroleum_Markets
Global Petroleum, Consumption.
World oil consumption is expected to grow by 1.3 million bbl/d in both 2008 and 2009, slightly lower than projected in last months report, in response to higher projected oil prices and increased risks of a global economic slowdown. Non-OECD countries are expected to account for 1.1 million bbl/d of world consumption growth in 2008, with gains concentrated in China, the Middle East oil-producing countries, India, and other Asian countries. OECD countries are expected to register a gain of over 0.2 million bbl/d in consumption in 2008, compared with a decline of 0.2 million bbl/d in 2007, reflecting both weather factors and increased demand for oil in Japan for power generation caused by nuclear facility outages. Japans oil input at electric utilities in January 2008 was up by 225,000 bbl/d compared with year-earlier levels
“Peak oil?”
Yeah. Same people promise us ‘Peak Climate’.
Washington, Wallace says, appears to be protecting oil speculators and ethanol producers rather than the interests of U.S. citizens
It's a fine line policitians walk in order to fulfill the wishes of their money-men and handlers, while at the same time bamboozling the people into thinking they are looking out for their interests. But, this economy and the oil issues are the only thing that can give the Dems more power, so look for the media and dem pols to keep this going.
And braindead voters across the country protect the incumbents who protect the speculators and ethanol producers, and block drilling in ANWR and off-shore. You know that most of those same braindead voters are complaining about high fuel and food prices.
Although I think the production of Ethanol from corn is stupid, a few observations:
1) This is good news for American Corn Farmers (or should be.)
2) Pilgrim's Pride's cost for feed has gone up exactly as much as it has for other poultry producers such as Tyson. If the market won't support higher poultry prices to compensate for the higher feed costs, then there is an oversupply in the market, and Pilgrim's Pride closing a plant is a natural response to market condtions.
3) I'd like to know how much processed feed went up in comparison to how much a bushel of corn went up. Here's the Corn Flake example of cost of corn vs. final product costs.
The corn flakes example:
An 18-ounce box of corn flakes contains 12.9 ounces of milled field corn.
When field corn is priced at $2.28 per bushel, the 20-year average, the actual value of corn in the box is about 3.3 cents. At $3.40 per bushel, the average price in 2007, the value was about 4.9 cents. The 49 percent increase in corn prices would be expected to increase the price of the box of corn flakes by about 1.6 cents, or 0.5 percent.
(Source: USDA)
You can buy an 18 ounce box of corn flakes today for about $3.65.
If the corn in that box is valued at 4.9 cents, the farmgate value of the corn in that box is 1.4 percent of the cost at the store's checkout!
I have to believe the cost of feed is a small portion of the cost of packaged poultry at the supermarket. All of the poultry dressing and processing is very labor intensive and has higher costs involved.
Reference PING!
We’ll look back on these times as the good old days.
If we are fifty we might be living to 100, but can’t know until we get there.
In other words, the liberal plan is working perfectly: their only goal was to hurt the economy.
(Johnny Cash impersonator?)
http://www.businessweek.com/bios/Ed_Wallace.htm
Of course liberals/Socialists will stop U.S. private companies from getting this badly needed oil into the tanks of the people. And liberals and the media say that we can't touch that oil because “we” are destroying the planet with Global warming. Global warming is a hoax just like “pollution” and disturbing natural habitats.
Below I show 2 articles that prove global warming is a hoax as we are now in a global cooling period and that we have massive reserves of oil in the U.S. . These articles have to be circulated to counter the massive misinformation from the liberal mainstream media.
Massive Oil Deposit Could Increase US reserves by 10x
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed.
http://www.freerepublic.com/focus/f-news/1993180/posts
http://www.freerepublic.com/focus/f-news/1977496/posts
Global COOLING Currently Under Way
Excerpt: All four major global temperature tracking outlets (Hadley, NASA’s GISS, UAH, RSS) have released updated data. All show that over the past year, global temperatures have dropped precipitously. A compiled list of all the sources can be seen here. The total amount of cooling ranges from 0.65C up to 0.75C — a value large enough to erase nearly all the global warming recorded over the past 100 years.”
My additional comment on this last article, is that at this rate of cooling the Earth will be in an Ice Age in 10 years, if this rapid cooling continues ( and based on my research on Sun data there will be more cooling). The liberal media would be going nuts if the Earth had warmed this much, almost a whole degree Celsius in year because they say only 8 degrees more or so and the planet would be destroyed.
. This is just one more piece of evidence that shows that the socialists( the government-media-complex and liberals) are destroying the U.S. economy so that they can destroy capitalism and turn the U.S. into a socialist state.
Masterful analysis - thanks.
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