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Countrydave55

Oil Reserves

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In July when oil prices were approaching $50 a barrel the President (IMO) declined to open the stratedgic oil reserve citing the fact that the reserves were for an emergency not to interefere with market fluctuation. Now the President has decided to pump from the strategic oil reserve.Oil Reserved Tapped I can't figure out what has changed. Does anyone know? Is there a strategic emergency?

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Closer to the election

arf

a political strategic emergency .....!

 

China has just gone from a net exporter ..to a net importer ....this is not going to help the prices much in the future as the Chinese economy ..realy kicks off in scale ..............

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Thanks fragged, now I'm depressed. I use an oil furnace as the primary heat source for my house.

Electric is looking better and better.

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yes something has changed. The devistation in Florida has caused a supply shortage. Hurricane damage= an emergancy, this was explained when the decision was made. This combined with world wide unrest just adds to the supply problem. Besides from what I can tell the oil companies must refill whatever oil they take.

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Thanks fragged, now I'm depressed. I use an oil furnace as the primary heat source for my house.

Electric is looking better and better.

Tried dried caribou dung? ;)

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Tried dried caribou dung? ;)

Moose! Not Caribou, Moose!

 

 

:lol::lol::lol:

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Yes I heard that about the FL hurricanes. I don't understand that. The only oil in Fl is the coconut oil in the suntan lotion. We have no refining capacity in Fl. so I guess it isn't refining capacity that is disrupted. Besides the oil being pumped from the reserves is unrefined. I think most of the refining is near the terminals in Texas and New Jersey. I am sure it is my ignorance if someone could just explain it to me.

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I actually supported Bush's decision to not tap the reserve a few months ago, high prices are not the "emergency" that the strategic oil reserve was created to avoid.

http://pcpitstop.ibforums.com/index.php?sh...pic=51816&st=30

 

The reserve is supposed to hold 700 million barrels or about 70 days of foreign oil supply. Stories I had seen said that the major disruption due to the hurricanes was Ivan, which caused the temporary evacuation of many Gulf oil platforms for safety. That caused about 10 million barrels to not be pumped. That is ONE DAY of foreign oil supply. Makes sense, they were off the platforms for about a day. Perhaps there were a few tankers that were delayed as a result of the weather, but they can unload NOW and this is not an emergency.

 

It looks to me like Bush is caving in to pressure to open up the reserve so that oil prices will drop. Bush will look like a hero by getting gas prices to drop, just in time for the election. That smells like politics to me.

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Supply and demand,,been around for sometime now.

 

 

The central cause of the run toward $50 a barrel is simple: For the first time in the history of the modern oil industry, global demand continues to rise faster than the world’s capacity to produce more crude. That's very differnt than the last major “oil shocks” of the 1970s, which were the result of a decision by the newly-formed Organization of Petroleum Countries to withhold supplies to drive up prices. But with prices now nearing $50, OPEC producers are pumping as fast as they can — and just barely keeping up with the current global demand of roughly 82 million barrels per day.

 

 

sounds like a loan to me,,good move but maybe not enough.

 

To help cushion the blow of storm-related interruptions, the Bush administration last week drew down about 1.7 million barrels of crude from the U.S. Strategic Petroleum Reserves and lent it to refiners whose supplies. Once those storm-delayed shipments reach shore, that oil will be pumped back into the reserve, which is approaching its full 727-million-barrel capacity. FREE VIDEO

 

 

• Pain at the pump

Sept. 27: Supply disruptions caused by Hurricane Ivan are partly responsible for higher gasoline prices over the past two weeks, says Trilby Lundberg, president of the Lundberg Survey.

CNBC

 

 

 

 

http://msnbc.msn.com/id/6115395/

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Now, when oil prices are $49 a barrel and the govt "loans" oil companies a few million barrels, it seems that the oil companies "repay" the reserve when oil supplies return to normal, meaning when prices drop. So who will see the benefit of opening up the reserve? The oil companies, or consumers?

 

Let's say the total loan is 10 million barrels at $48 a barrel, for a total of $480 million worth of oil. So if they pay it back later at, say, $40 a barrel they have saved $80 million. So do consumers see all $80 million, considering it was govt oil? I kind of doubt it.

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Yes I heard that about the FL hurricanes. I don't understand that. The only oil in Fl is the coconut oil in the suntan lotion. We have no refining capacity in Fl. so I guess it isn't refining capacity that is disrupted. Besides the oil being pumped from the reserves is unrefined. I think most of the refining is near the terminals in Texas and New Jersey. I am sure it is my ignorance if someone could just explain it to me.

Virtually all oil coming into the country comes into New Jersey and Lousiana. If you ever driven through northeast NJ on the NJ Turnpike into NYC you would see acres, acres, acres and acres of oil tanks and refineries that look like something from a scary movie. Towering refineries with bright lights and huge tanks.

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Now, when oil prices are $49 a barrel and the govt "loans" oil companies a few million barrels, it seems that the oil companies "repay" the reserve when oil supplies return to normal, meaning when prices drop. So who will see the benefit of opening up the reserve? The oil companies, or consumers?

 

Let's say the total loan is 10 million barrels at $48 a barrel, for a total of $480 million worth of oil. So if they pay it back later at, say, $40 a barrel they have saved $80 million. So do consumers see all $80 million, considering it was govt oil? I kind of doubt it.

Hey buster I got no idea how it really works :mrgreen:

 

 

Seems to me that ya don't want to loose too much money making loans tho.

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Guest fragged one

Virtually all oil coming into the country comes into New Jersey and Lousiana. If you ever driven through northeast NJ on the NJ Turnpike into NYC you would see acres, acres, acres and acres of oil tanks and refineries that look like something from a scary movie. Towering refineries with bright lights and huge tanks.

actually, dude, the port of houston receives the most oil in the united states, and in fact, is the busiest port in the united states.

 

With more than 100 petrochemical waterfront facilities, Houston is the second largest petrochemical complex in the world. Major corporations such as Exxon-Mobil, Shell, Saudi ARAMCO, Stolt Nielson, Odfjell Tankers, Sea River and Kirby Marine have national or international headquarters in Houston. Leading trade associations such as INTERTANKO and the Chemical Carriers Association also have a substantial presence here. Three important Federal Advisory Committees, the Houston-Galveston Navigational Safety Committee (HOGANSAC), the Chemical Transportation Advisory Committee and the National Offshore Safety Advisory Committee are key players in the Port as well.

 

 

In terms of maritime traffic and cargo, the Port of Houston ranks first in the U.S. for its number of ship arrivals and total cargo tonnage. Houston handles over 50% of all containerized cargo arriving at Gulf of Mexico ports. Additionally, more than 50% of the gasoline used in the U.S. is refined in this area.

 

 

hurricanes in the gulf and carribean defenitely affect the traffic of goods to the us.

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If the gov does not sell the oil to refineries now, it could cause a few problems for some consumers. The price has nothing to do with it. The gov does not sell it to refineries, they loan it and the companies pay it back so price is meaningless.

 

If your afraid that the consumers are getting ripped off by the gov selling oil at $49/BR and having it replaced with $40/BR oil, then tell the gov not to loan the oil and let consumers suffer. Again like I said, the gov loans the oil and the companies pay it back with oil by refilling the reserves so the price is irrelevant.

 

Only a Bush hater would think that Bush is ripping off the consumers by stopping any disruption in the oil supply. This was a brilliant move by Bush at the time it was needed and is another example of the GREAT leadership that GWB has displayed for the last 4 years.

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This is a good deal the US Citizens if this is a temporary disruption in crude oil availability. However Lundberg reports that this is not a temporary disruption and it reflects long term supply shortage. This is evidenced by Oil futures which continue to trade at record prices. That seems to suggest that drawing down the strategic oil reserve to a degree greater than disruption of 1 to 2 days supply is as Dave suggested an election year tinkering with the market. Odd that somebody that let us pay record prices in July for fuel touting the value of the free market finds the free market inconvenient at election time.

 

Maybe Bush will start offering grants for voting Republican.

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CHINA is now increasing crude usage by 13% per year and its going up fast. Since China is 5+ times the size of the US, they can buy a lot of oil. In the future the US will need to compete with other countries for oil. Since the US cost per gallon of gas is less than half the price of the rest of the world, guess who will get the oil. I can see $4 to $5 /gallon within a few years because oil will be sold to the highest bidder.

 

Even US oil companies would rather sell oil to these other countries because their willing to pay a much higher price. They will not take a loss just to give whining americans $2/gal gas.

 

I will make a prediction that a barrel of oil will cost over $100/barrel within the next 5 years. Maybe even $150 just based on the present rate of increased usage in the world.

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All the more reason for getting used to alternatives right away.

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This is a good deal the US Citizens if this is a temporary disruption in crude oil availability.  However Lundberg reports that this is not a temporary disruption and it reflects long term supply shortage. This is evidenced by Oil futures which continue to trade at record prices. That seems to suggest that drawing down the strategic oil reserve to a degree greater than disruption of 1 to 2 days supply  is as Dave suggested an election year tinkering with the market. Odd that somebody that let us pay record prices in July for fuel touting the value of the free market finds the free market inconvenient at election time.

 

Maybe Bush will start offering grants for voting Republican.

why do you think it would be more than the disruption? There was a disruption due to the horrid weather in the gulf and it has removed some supply. There is a long term refining problem in the US because everyone uses "not in my backyard" politics to limit refining capacity and expantion. Contribute this to the tree huggers...

 

everyone pays the same wholesale price for a gallon of crude unless they get into a bidding war with each other. The only reason our gas is so much less is because we arent taxed heavily on it like other countries.

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Gee, if they open up the reserves, doesn't that oil go to the refining companies, like those Haliburton subsidiaries? Wonder why they would open it up so close to an election they might loose. Big money oil contracts wouldn't have anything to do with it, don't ya think? I mean, these oil dependent politicians wouldn't put their own interests ahead of you and I. Would they?

 

Hmmm

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Clinton didn't have major stock deals tied to oil. Oh, I forgot, GWB and Dickie put all their stock in blind trusts. How blind? :mrsgreen:

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Well as I recall I complained about the oil reserve being used by Clinton in 2000. Still your argument is the same one my 3 year old uses. So in so did it so I can to.

 

Chaney's retirement pay from Haliburton is not a blind trust. The compensation package is a stock deal and he profits directly from the value of Haliburton.

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