Posted on 05/16/2006 9:01:38 PM PDT by kellynla
U.S. oil refiners are not conspiring to keep gasoline prices high and are not overcharging consumers for motor fuel, the industry's trade group told Congress on Thursday.
Under pressure to do something about soaring fuel costs, President George W. Bush has ordered federal regulators to investigate whether oil companies and refiners are collecting excessive profits from gasoline prices that top $3 a gallon in many parts of the country.
"Allegations of refiner price-fixing, price-gouging and other illegal pricing practices are patently false," Bob Slaughter, president of the National Petrochemicals and Refiners Association, said at a House committee hearing on gasoline costs.
Slaughter told the House Energy and Commerce Committee the refining industry had been subjected to dozens of investigations in recent years by federal and state agencies when gasoline supplies were tight, and in each case the industry was cleared of wrongdoing.
The FTC is scheduled to send Congress a report by next week on the agency's latest probe of high gasoline prices and possible refinery constraints. The report was mandated by Congress last year.
Red Cavaney, president of the American Petroleum Institute, also defended the business practices of its big member companies.
"We condemn price gouging," he told the committee.
The price of crude oil, which in the U.S. market was again above $70 a barrel, accounts for about half the cost of making gasoline.
"Oil companies do not set the price of crude oil," Cavaney said. "It is bought and sold in international markets, and the price paid for a barrel of crude oil reflects the market conditions of that day."
Strong global oil demand, especially from growing economies in China and India, and market concerns about possible future supply disruptions linked to the West's dispute with Iran's nuclear program, were helping to keep crude prices up.
(Excerpt) Read more at news.yahoo.com ...
Well, I hate to blow up his shtick, but my sister ISN'T going to marry a Martian. She's already married a Norwegian.
;^)
Hey pal, what exactly is your problem today? If you're having a bad day, that's fine. But would you take your attitude and your insults somewhere else and please do not post to me again.
BTW, I had a good idea what those two commodity contract symbols meant, but I wanted you to confirm it for me. Of course, with that information you can get to the extra cost of ethanol much faster. Like I said, I'm not a commodity trader, but I still understand the basics of financial analysis in the oil industry.
Do you know if Ashland is expanding refining capacities in the midwest?
No problem at all. I'm just very, very tired of listening to/reading self-important individuals, whether here or in the LBM, who haven't the necessary specific knowledge required to either trade in or opine on any given mkt. There is, btw, an industry-standard term for chaps such as you, and it is not flattering.
Gee, I'm truly sorry if my accurate observation(s) bothers/bother you.
Btw, if you think my recent comments were insults, that's another subject about which you haven't a clue. Uninformed clowns (regarding energy mkts) such as you do UNTOLD damage to this nation, and you should live so long as to get a free pass on your drive-by silliness (the gentlest term I could find at short notice, and I do credit Mr. Limbaugh for his adaptation of the adjective used).
Stick to what you know. You sound more or less like Cheryl Strauss Tinhorn regarding futures mkts.
Actually, an old Byrd's song, derived from Ecclesiastes if I'm not mistaken, defines markets best:
'To everything, there is a season.'
Now, try solving -- even approximately -- the problem of profiting in mkts in ANY season. Some can, some can't. Some have, some haven't.
Just a query -- what was the last time you profited from a short sale, in ANY mkt? Why is it that I somehow feel constrained to suppose that your answer would be 'Never', assuming an honest response.
As noted previously: good luck to you. You'll be needing it, regarding trading.
I'm not up on the current situation with Ashland, but didn't they just sell off the rest of their interest last year in the M/A refinery in LA to Marathon. Doesn't sound too expansionist a philosophy.
Might be a good task for the Noorymiester.
Good posts.
I never said one word against Norway. After all, as the old rhyme goes (which my brother-in-law never tires of reciting...g!) 'Von tousand Svedes ran troo de veeds, chased by von Norvegian!'
Btw, it's not quite as rosy as you state for Norwegian energy production. There will be huge infrastructure replacement costs shortly. Also, the envirowhackos are every bit as active in Norway as anywhere else, perhaps more so in some cases. An old fraternity brother of mine (Norwegian, moved back there) tried last year to recruit me and a few others of our acquaintance to protest after the 19 October accident. Nutjob project, that, and I would have laughed at him except that he was always a VERY nice gent. I merely declined.
You can bet your soul, however, that my old friend is the BEST face of this lot. I'd sooner give al-Qaida a pass than the envirototalitarians.
A good word for them: envirototalitarians.
It does for Marathon.
The oil industry is both consolidating (mergers, aquisitions) and modernizing their refining capabilities. Modernizing often includes an increase in their refining capabilities. These are not contradictory, although they may seem that way to some.
First of all you’re preaching to the choir. I didn’t assert that profit equals gouging. I only asserted that some of the increased cost can attributed to profit OR gouging. I don’t have any quarrel with profit, within reason in the case of a de facto monopoly.
I also have no quarrel with capital investment and depreciation of the investment as a component of the cost of a gallon of gasoline, but the cost for a depreciated investment is spread over perhaps 20 years. So depreciation of capital investment would not result in a short term spike as we’ve seen, and I would think the refiners would be sharing news about investment in refining capacity to ward off charges of gouging or excessive profit.. If the investment is required do to new regulations, such as for the blending of ethanol, then that too would be a depreciated capital investment, so again, if they share the cost data perhaps we can then blame the regulators, instead of the refiners that should have a profit motive. BUT, my original point was, the dramatic increase in cost cannot be solely attributed to the world cost of crude. In fact, the per barrel cost is down substantially today from the recent spike, but the retail price is still at the peak.
And, if you know the actual cost breakdown attributable to depreciated investment that has contributed to the extraordinary price increase, by all means, share with us.
FReegards!
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