DRILL,DRILL,DRILL

[BMT (RIP)]

Tuesday, July 15, 2008



Bush Says Drill, Drill, Drill — and Oil Drops $9! [Larry Kudlow]


In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

Now isn’t this interesting?

Democrats keep saying that it will take 10 years or longer to produce oil from the offshore areas. And they say that oil prices won’t decline for at least that long. And they, along with Obama and McCain, bash so-called oil speculators. And today we had a real-world example as to why they are wrong. All of them. Reid, Pelosi, Obama, McCain — all of them.

Traders took a look at a feisty and aggressive George Bush and started selling the market well before a single new drop of oil has been lifted. What does this tell us? Well, if Congress moves to seal the deal, oil prices will probably keep on falling. That’s the way traders work. They discount the future. Psychology and expectations can turn on a dime.

The congressional ban on offshore drilling expires September 30, so that becomes a key date. A new report from Wall Street research house Sanford C. Bernstein says that California actually could start producing new oil within one year if the moratorium were lifted. The California oil is under shallow water and already has been explored. Drilling platforms have been in place since before the moratorium. They’re talking about 10 billion barrels worth off the coast of California.

There’s also a “gang of 10” in the Senate, five Republicans and five Democrats, that is trying to work a compromise deal on lifting the moratorium. So it’s possible a lot of action on this front could occur much sooner than people seem to think.

So I repeat: Drill, drill, drill. Deregulate, decontrol, and unleash the American energy industry. Those hated traders will then keep selling oil as the laws of supply and demand and free markets keep working.

Bravo for Bush. Bravo for the traders.

[nmap]

Originally Posted by BMT

Now isn’t this interesting?

Yes, Sir, truly.

I suspect the downward move will be modest in scope and duration - but such differences in opinion are what makes markets.

[mdb23]

Originally Posted by BMT

Tuesday, July 15, 2008
Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

Now isn’t this interesting?

Yet, on this same day, gas went up .10 a gallon in my AO.

Last week it was $3.91 a gallon, then it went up to $3.98 by Friday or Saturday. Today? $4.09.

On the same day that the projected price of oil dropped......

[The Reaper]

Hate to tell you, but wholesale gasoline futures dropped 20 cents per gallon today as well.

TR

[mdb23]

Originally Posted by The Reaper

Hate to tell you, but wholesale gasoline futures dropped 20 cents per gallon today as well.

TR

Does that mean gas will go up another 15 cents per gallon at the pump?

I'm still trying to figure this stuff out. LOL

[The Reaper]

Originally Posted by mdb23

Does that mean gas will go up another 15 cents per gallon at the pump?

I'm still trying to figure this stuff out. LOL

No, but price declines "take a while to work their way through the system".

Increases are antcipated and take place ahead of time, in my experience recently.

TR

[Ret10Echo]

Although I appreciate efforts to reduce my pain-at-the-pump...and think it is insane to not do what is necessary to reduce not only our dependance, but other nations influence...drill, drill, drill remains a stop-gap. The price run-up has actually been getting some alternative solutions back to the forefront. While Exxon-Mobil is out there drilling in the Gulf, they oughta set up some wind farms around the rig (two different issues I know...)

Necessity breeds ingenuity.

[GratefulCitizen]

I think oil prices are going to come down regardless of politicians action/inaction.
They're just positioning to take credit.
(Drilling is still a good idea, though)

A well-reasoned opinion:
http://www.businessweek.com/magazine...ndex_investing

However, there may still be some room left in the bubble:
http://www.bloomberg.com/apps/news?p...4&refer=africa


My predictions (barring a major Israel/Iran event):
-Prices at the pump will drop steadily in September (especially diesel).
-Oil will be volatile until mid-August, and then go into decline.

[ABN_FO]

TR
No, but price declines "take a while to work their way through the system".

My wife and I were talking about that last night. How the price at the pump can skyrocket over night, but will probably take 1-3 weeks to decrease.

[BMT (RIP)]

Dear Nancy and Howard,

We all understand the importanace of our next National election's and the need for money. Due to the current cost of food and fuel, I can't afford to donate anymore money to the Democrat party. Maybe when better time's return I can again support the party.

Helmut Schmidt

[Paslode]

Originally Posted by ABN_FO

TR
No, but price declines "take a while to work their way through the system".

My wife and I were talking about that last night. How the price at the pump can skyrocket over night, but will probably take 1-3 weeks to decrease.

Yes and no. In a past life I work for a wholesale distributor that bought and sold commodities like copper and stainless. If the manufacturer raised the price our price went up immediately, if it went down our pricing followed suite within days if not immediately. And it didn't matter what our actual cost was we followed the market good or bad.

And the reason being was that we had competitors that lowered their prices and if we didn't lower our prices we would lose business.

In my area there used to be Phillips 66, Standard/AMOCO, Sinclair, FISCA, Hudson, Workingmans Friend, Clark, Chevron, Texaco too name a few. We even had a refinery here.

Now we have BP, Shell, QuickTrip, Phillips 66 and no refinery.

Point being there is little to no competition these days and thus little to no competition/motivation to lower the price.If it was truely a competitive market my local BP, Shell, Quicktrip and Star 66 would not be laying dormant with the same stagnant price as their competitior across the street. IMO.

[The Reaper]

Retail gasoline pricing strategy has changed over the past few years. We have discussed it here before, but essentially, rather than the past practice of taking the wholesale price, plus delivery charges, plus taxes, and adding a couple of cents mark-up, with the price held for a week or so till the next delivery, the current policy is that the corporate owner of the station surveys the area of each station for the competition's pricing, looks at the futures and trend line, and sets the retail price at least daily, sometimes more than once per day. My understanding is that they want to charge as much as the local markets will bear, and they do not want to be the last one to raise prices, or the first to drop them.

The gasoline futures (which were supposedly driving the wholesale and retail gasoline pricing) dropped another 10 cents yesterday. That would mean more than 30 cents of price drop in less than a week.

My observation around town this morning is that they raised retail prices another 2-3 cents this week.

Go figure.

TR

[Paslode]

Originally Posted by The Reaper

Retail gasoline pricing strategy has changed over the past few years. We have discussed it here before, but essentially, rather than the past practice of taking the wholesale price, plus delivery charges, plus taxes, and adding a couple of cents mark-up, with the price held for a week or so till the next delivery, the current policy is that the corporate owner of the station surveys the area of each station for the competition's pricing, looks at the futures and trend line, and sets the retail price at least daily, sometimes more than once per day. My understanding is that they want to charge as much as the local markets will bear, and they do not want to be the last one to raise prices, or the first to drop them.

The gasoline futures (which were supposedly driving the wholesale and retail gasoline pricing) dropped another 10 cents yesterday. That would mean more than 30 cents of price drop in less than a week.

My observation around town this morning is that they raised retail prices another 2-3 cents this week.

Go figure.

TR

True.

But would you not agree that if there were more refinering capacity and suppliers the chances are that the game would likely change and the price per gallon could drop considerably?

On another side of the coin, I would be much happier paying 5 to 10 bucks a gallon if 90% of that revenue were staying in the good ole USA, providing better wages for US workers, building US refineries and thus stumulating the US economy and the greater good of the nation instead of the foreign economies.

[abc_123]

Originally Posted by Paslode

True.

But would you not agree that if there were more refinering capacity and suppliers the chances are that the game would likely change and the price per gallon could drop considerably?

On another side of the coin, I would be much happier paying 5 to 10 bucks a gallon if 90% of that revenue were staying in the good ole USA, providing better wages for US workers, building US refineries and thus stumulating the US economy and the greater good of the nation instead of the foreign economies.

I was with you, but you lost me somewhere after 5 and before 10. We start talking those numbers and I say that we just need to declare war on somebody, make it clear that it is ALL ABOUT oil and commence to ass-kicking until we end up with our very own brand-new (used) oil field, then run up the stars and stripes and stick an "under new management" sign in the ground.

[Paslode]

Originally Posted by abc_123

I was with you, but you lost me somewhere after 5 and before 10. We start talking those numbers and I say that we just need to declare war on somebody, make it clear that it is ALL ABOUT oil and commence to ass-kicking until we end up with our very own brand-new (used) oil field, then run up the stars and stripes and stick an "under new management" sign in the ground.

LOL! I wouldn't want to pay 5 to 10 dollars per gallon but if it came to that...

What I was getting at was that we are spending say $4 plus dollars per gallon and the larger percentage of those funds are going to companies outside the US, supporting economies outside the US. So if we are sending say $2.80 per gallon to say Saudia Arabia and pocketing a mere $1.20 for the US we are committing economic suicide. If we kept 80 percent of that at whatever price because were produce our own resources it gets dumped back into the US economy, that in turn reinvigorates an industry and creates jobs, which adds an influx of spending and taxes.

As it stands the US Oil Industry isn't much more than a broker or middleman for the Arabs making a sales commission. That is low overhead, less risk and environmetally friendly! But it isn't friendly to the economy.