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(KATC)   Strategic Petroleum Reserve is almost full for first time in 30 years. Some analysts at the What Are You Smoking Institute believe this will result in lower prices at the pump   (katc.com ) divider line
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4565 clicks; posted to Main » on 08 Jun 2005 at 2:43 AM (11 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2005-06-07 05:22:36 PM  
Yay, it'll hold us for the projected sixty-day limit once all other sources dry up.
 
2005-06-07 05:23:27 PM  
I believe they are a Libertarian think tank. Kind of like the CATO institute, which specializes in modern fashions at prices you can afford.
 
2005-06-07 05:30:59 PM  
the Strategic Petroleum Reserve has WHAT to do with consumer oil/gasoline???

"Strategic" id more about having some oil in storage if and when we are cut off, and NEED it for our own straegery, not to monkey around with consumer prices ... ?!?
 
gfm
2005-06-07 05:39:43 PM  
I've got like, 5 cans of beans in my pantry.

I'm pretty sure that the next time I go to Ralph's, the price of beans is going to be lower because of this overwhelming surplus.

So far no luck on that theory, but I'm an optimist.
 
2005-06-07 05:41:49 PM  
Gentleman, we are approaching peak salt caverns. Once those salt caverns are full, we will be unable to fill them at a rate higher than 1 barrel of oil per 1 barrel extracted, a 1:1 or "neutral" ratio.

What's going to happen to those salt caverns when Texas and Louisiana sink into the Gulf of Mexico?
 
2005-06-07 05:51:50 PM  
1) Wait for oil prices to hit record record high
2) Have gov't buy enough oil to fill all of its giant underground storage
3) Profit!
 
2005-06-07 05:57:11 PM  
the_gospel_of_thomas:

"Strategic" id more about having some oil in storage if and when we are cut off, and NEED it for our own straegery, not to monkey around with consumer prices ... ?!?

It most certainly is for monkeying with consumer prices. It was tapped in 1991 during the Gulf War to keep prices and supply stable. It was tapped again in mid 2000 to avert a heating oil shortage.
 
2005-06-07 06:19:16 PM  
1) Wait for oil prices to hit record record high
2) Have gov't buy enough oil to fill all of its giant underground storage
3) Profit!


Bingo
 
2005-06-07 06:23:12 PM  
Every ten years? I wonder ( must claim ignorance for the most part on the Reserve ) but I remember Kerry biatching about how Bush "should open the Strategic Oil Reserves help out consumers" back when he was campaigning.

I THOUGHT that it was established - mainly - to be there in case we needed a lot of oil at once, for the government or military in time of crisis.
 
2005-06-07 06:25:08 PM  
BigTuna: It most certainly is for monkeying with consumer prices.

Here's everything you never wanted to know about the SPR.

It's mainly been quietly used as a buffer to help ensure an orderly operation of the petro industry, but it's primary purpose is one that hopefully won't have to be used.
 
2005-06-07 06:36:18 PM  
What the article doesn't say is that at least 3% of the US daily consumption is just to fill the strategic reserves. And they have been willing to pay any price to fill those reserves. When you take that of the mix, prices really should drop.
 
2005-06-08 12:06:11 AM  
Well, when the damn gubmint quits competing with us for the supply, the price oughta go down.
 
2005-06-08 12:24:08 AM  
Of course it will be after summer when that happens.
 
2005-06-08 12:52:29 AM  
Sweet, how can I get a jorb at the "What Are You Smoking Institute"?
 
2005-06-08 12:52:40 AM  
The end of August is still summer
 
2005-06-08 02:27:09 AM  
Record oil prices, record oil company profits, record CEO bonuses

"Oil companies reported record profits last year-and not just records for oil companies. Royal Dutch Shell earned $18.54 billion, while BP lagged behind with a net income of $15.73 billion, a company best. ExxonMobil broke the U.S. record by reporting a 2004 profit of $25.33 billion, taking the title away from Ford. ConocoPhillips's profit for the year rose 72 percent, while ChevronTexaco's grew 84 percent." Exxon's 2004 revenues were a company record: $298.03 billion. In February, Exxon surpassed General Electric Co. to become the largest U.S. corporation by stock market value. [Washington Post, 2/13/05; Associated Press, 4/13/05]"

Just sayin ...
 
2005-06-08 02:46:01 AM  
Oil companies are suffering from Peak Profit.
 
2005-06-08 03:02:06 AM  
Wasn't dwindling reserves one of the main arguements promoted to justify drilling in ANWR?
 
2005-06-08 03:13:50 AM  
Here's the thing... they (the government!!!) has been buying up all sorts of oil to fill this thing up. When it's finally full, they won't buy any more, and suddenly there will be an extra 75 thousand barrels available to consumers per day. It's simple suply and demand.

Will it affect prices? Yes.

Will it affect them very much? Probably not
 
2005-06-08 03:24:26 AM  
It's a shame the US didn't treat oil in the same manner as helium: buy unthinkable stores when nobody cares and sit on it. At least when the world falls past peak helium, I can join with my countrymen in taunting the rest of the world with really tinny voices.
 
2005-06-08 03:40:38 AM  
So we filled it while oil prices were at an all time high? What was the source, domestic or foriegn?

1) Oil people occupy White House
2) Unrest in Middle East
3) Record Oil Prices
4) America Tanks UP
5) ????
6) Profit!
 
2005-06-08 03:46:18 AM  
Do away with OPEC and you can get a nice open oil market. Which would do wonders for production and prices. As for the the SPR, that it's full? Is a good thing. Now on the other hand, Russia's stockpile of titanium? Is a bad thing.
 
2005-06-08 04:56:14 AM  
Maybe oil prices are high because it was/is being filled. Oil companies figured the U.S. would almost assuredly fill the reserves because of the Iraq war. Standard stratergy.

So, they jacked up the price and are making billions. This guy, an oil analyst at an investment firm, says "it's like they're printing money." Interestingly, supply wouldn't even enter into it necessarily, just demand. They know the demand is there, and that no matter what the price, the U.S. will pay it.
 
2005-06-08 05:03:18 AM  
American fuel prices are already too low. What's the current price? 3 dollars to the gallon?

Lets put that in perspective.

I live in Italy, here I pay 1.2 euro a litre. That's 1.2 * 3.785 = 4.54 euro per US gallon, or about 5.7 US dollars a gallon. And it's *still* cheaper than the UK.

And the prices in England and Italy are kept artificially high with taxes to dissuade the kind of gas guzzling SUVs that are becoming all too common on city streets. If you want to drive something with a 5 litre turbo charged engine to take the kids to school you can, but you'll be taxed like mad for the privilege
 
2005-06-08 05:11:48 AM  
The US consumes approx. 20 million barrels of oil a DAY (and increasing).Figure out how long 700 million barrels will last...
/long enough to make sweet love to your @$$ before the next stone age
 
2005-06-08 05:12:41 AM  
FluffyPanda,

Agreed. It'd be nice if, you know, our government raised gas taxes and then used it to shore up the rest of our transportation infrastructure. Our air transit system is hemorrhaging money. Our passenger rail network (probably the most energy-efficient way of moving people from point a to point b) would make any other developed country ashamed of itself. And outside of a few of the largest cities, public transit is either woefully inadequate or non-existant.

/wouldn't mind seeing less SUVs, either. Buy a damn station wagon, mommy-man.
 
2005-06-08 05:14:29 AM  
While petrol is dirt cheap in the States. Do you think anything you disagree with should taxed, to encourage behaviour more inline to your ideals?
 
2005-06-08 05:27:29 AM  
Cavemankiwi:

While petrol is dirt cheap in the States. Do you think anything you disagree with should taxed, to encourage behaviour more inline to your ideals?


No, but all luxuries are taxed, with the biggest consumers putting more back. It's just the way the system works. Petrol is a luxury, if you're driving a Hummer at 1 mile to the gallon when you could be driving a compact with much better economy.

Heavy taxation of alcohol and cigarettes is accepted, why not petrol?

The real problem, as with all taxes, is making sure that the money you pay is spent wisely.

Like it is in the US

/is aware that other countries most likely have similar spending
//was still amazed to see that graphical depiction
 
2005-06-08 05:28:39 AM  
From the Guardian Online - may get a green light later with a huge OBVIOUS tag.

"President's George Bush's decision not to sign the United States up to the Kyoto global warming treaty was partly a result of pressure from ExxonMobil, the world's most powerful oil company, and other industries, according to US State Department papers seen by the Guardian."

http://www.guardian.co.uk/climatechange/story/0,12374,1501646,00.html

No Oil conflict of interest with in the White House, no sir...
 
2005-06-08 05:29:34 AM  
Lets tax fat chicks. Save on fuel consumption through lighter cars, etc etc.
 
2005-06-08 06:28:00 AM  
Yay! Now we can weather what will surely just be a minor disruption to the world's oil supply when we invade Iran!!!!
 
2005-06-08 06:36:39 AM  
EveryoneLovesCleanUndies:

...dwindling reserves one of the main arguements promoted to justify drilling in ANWR?

I thought it was our dependence on outside (read: Middle Easter) sources. The government did a good job spinning this one. And by the way we will not see a drop of oil out of the drilling in ANWR for at least 4 years. The SOR is oil for military and government autos. You and I will not see one drop of that in times of emergency.

Gas prices will come down when screaming monkeys fly out of my bunghole.
 
2005-06-08 06:49:45 AM  
There sure are a lot of dumb, uninformed idiots that post here. How to cure this problem:

1. RTFA
2. Take an economics class at your local community college.
3. Take a history course at your local community college.
4. Pay attention to the Consumer Price Index.
5. Keep voting Republican.
 
2005-06-08 07:28:46 AM  
Wow. Three posts in a row that summed up everything I was thinking:

What the article doesn't say is that at least 3% of the US daily consumption is just to fill the strategic reserves. And they have been willing to pay any price to fill those reserves. When you take that of the mix, prices really should drop.

Well, when the damn gubmint quits competing with us for the supply, the price oughta go down.

Of course it will be after summer when that happens.


Especially the last one. I realize that demand is up during the summer but tis the season to gouge.
 
2005-06-08 07:32:26 AM  
Heavy taxation of alcohol and cigarettes is accepted, why not petrol?

Because I don't need to drink alcohol and smoke cigarettes for an hour each day to get to and from work.
 
2005-06-08 07:58:28 AM  
Because I don't need to drink alcohol and smoke cigarettes for an hour each day to get to and from work.

You must have a better job than I do.
 
2005-06-08 08:32:24 AM  
Cargrrl82

Do away with OPEC

Bush was on TV last week holding hands with Mr. Opec. I think he kind of likes the guy, do-rag and all.
 
2005-06-08 08:36:12 AM  
Pick

After all that education, if it sticks, hopefully the subject will be intelligent enough to not vote for more of the same shafting that we've been getting lately.
 
2005-06-08 08:49:13 AM  
NineInchNader

Excellent post.
 
2005-06-08 09:02:05 AM  
And Starbucks is still selling coffee for $64 per gallon. Where's the outrage?
 
2005-06-08 09:17:07 AM  
Well, let's see. The main forces in oil prices are supply, demand, and speculation on the future of both. This impacts all of those so it's pretty much common sense there will be a price impact.
 
2005-06-08 09:22:06 AM  
Article says when reserve is full 70,000 barrels will be available a day to the US consumer market. US uses 20,000,000 barrels a day (1/4 of what the World uses).

20,000,000 divide by 70,000 = 285.741. ie. a 285th of what America needs - that's going to make a big difference to supply now isn't it! Of course it could fill up - April-June has the least demand for oil. Distillation plants shut for maintenance. Summer driving season approaches, then Winter - will it be full in January?

Looking at the bigger picture - apparantly we're supposed to rely on Saudia Arabia (OPEC country that supposedly has spare capacity and ability to increase production) as US supply declines:
http://www.washingtonmonthly.com/features/2005/0506.drum.html
Mathew Simmons one time energy advisor to the Bush administration and head of the largest energy investment company thinks Saudia Arabia cannot raise output and will start to decline in the next few years.

T Boone Pickens, Warren Buffett (chariman Berkshire Hathaway) and Al Gore have all said in the last month that we're now hitting peak oil. Texaco came out with similar data in a report last week and Shell predicts rising prices for next 2 decades at least. Cheney effectively said it in 2001.
An investment bank predicts $350 barrel oil for 2010-2015.
May I now ask who doesn't believe in Peak Oil?

"Major oil finds (of over 500m barrels) peaked in 1964. In 2000, there were 13 such discoveries, in 2001 six, in 2002 two and in 2003 none."
Break out the bicycles
Guardian, 8 June 2004

"Fifty years ago, the world was consuming 4 billion barrels of oil per year and the average discovery was around 30 billion. Today we consume 30 billion barrels per year and the discovery rate is approaching 4 billion barrels of crude per year."
An oil supply tsunami alert
Asia, 4 May 2005
 
2005-06-08 09:31:18 AM  
Don't worry China and India will surpass us as the number 1 oil consumers soon and then things will get real fun. Hope you like living close to work and wearing two sweaters in the winter
 
2005-06-08 09:44:36 AM  
jbtilley:

Because I don't need to drink alcohol and smoke cigarettes for an hour each day to get to and from work.

Maybe I'm biased because I ride a 125cc motorbike to work and that will carry me over 100km with 6 of petrol (Italian prices, you can halve that if you live in America).

Sure, I'm paying more in tax alone on a tank of fuel than an American would hand over to the cashier, but I'm not getting a bad deal of it because I drive a good fuel economy vehicle.

At the end of the day, you pay for what you use. Better than just sticking it on income tax and taking away the choice.

Oh and NineInchNader, great post :)
 
2005-06-08 09:45:41 AM  
FluffyPanda: with 6 of petrol


Hmmm... fark strips out the euro symbol...

That was "EUR 6 of petrol"
 
2005-06-08 09:48:46 AM  
The reason the US needs cheaper gas than most of Europe is size. The US is a big farking place, and goods/people travel acroos state borders at will. when you can drive over 2000 miles and not hit an ocean, you are looking at a large population to be served. $4+ for a gallon of gas would cripple the economy. Trucks and trains would bleed money unless consumer prices went up for everything. Food, ambulances, doorknobs, medicine, etc. Across the board price hikes.

The reason that the US needs cheap gas? Size does count. And don't think the rest of the world can sit back and act smug if the price of US gas doubles. That means prices go up for everyone else too. Any American product or service will jump in price. And there are far more of those globally than you think...
 
2005-06-08 10:33:36 AM  
You can twist a lot of arms in 60 days.
 
2005-06-08 10:35:09 AM  
'DrJohnZoidberg
Don't worry China and India will surpass us as the number 1 oil consumers soon and then things will get real fun. Hope you like living close to work and wearing two sweaters in the winter'

Naw, I'll just keep living in the sunny sun belt and watch my property values climb up up and away.
 
2005-06-08 10:47:08 AM  
While I cannot agree with the price of gasoline or heating oil, I imagine the process for refining is much more difficult than the process for making some of these items I will list.

- Diet Snapple 16 oz for $1.29 = $10.32 per gallon

- Lipton Ice Tea 16 oz for $1.19 = $9.52 per gallon

- Gatorade 20 oz for $1.59 = $10.17 per gallon

- Ocean Spray 16 oz for $1.25 = $10.00 per gallon

- Evian (water) 9 oz for $1.49 = $21.19 per gallon

- STP Brake Fluid 12 oz for $3.15 = $33.60 per gallon

- Vicks Nyquil 6 oz for $8.35 = $178.13 per gallon

- Pepto Bismol 4 oz for $3.85 = $123.20 per gallon

- Whiteout 7 oz for $1.39 = $254.17 per gallon

- Scope 1.5 oz for $0.99 = $84.84 per gallon

These are old prices, which I am sure have only gone up. Considering what gasoline does, I still think we do get off rather cheap.
I do find it funny that the prices are so high for gas though. I have talked to someone that works off the coast of Africa on an of shore oil rig, and he says that the Earth has enough unrefined oil that his great-great-great-great grandchildren shouldn't even be paying more than 2 U.S. dollars per gallon in the future.
In this instance, I will agree with OPEC (which I am sure is not a popular opinion.) They could send us all the barrels of oil that we wanted, but we just don't have enough refineries in this country to translate that into cheap enough product.
 
2005-06-08 10:49:50 AM  
I never knew that there was an actual oil reserve, I thought it was just some government mandated surplus spread throughout the country that 700,000,000 barrels would be immediately available if needed.

The more you know.
 
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