gasoline for automobiles

is it just a coincidence that the spiralling gasoline prices seem to occur under a

republican administration, or is there more to it than that?

with all the bugaboo of "protecting" the u s citizenry - why has this facet of it being overlooked?

just curious.

mho v=83e

good article here on this issue. there is no single answer like war, demand......etc

Governments that we have a vested interest in keeping weak and dependent on us. From there, its a short step to 'extremely bad'.

high priecs, why?

*>Generally,

=3D=3D the u s probably doesn't import crude oil from every international source, but yet it seems like when any oil producing nation "farts" the price of gas goes up.:--)

*now, isn't a situation like that comforting? how long did the hatfields and the mccoys - battle.?

mho v=83e

There is no link between the gulf coast and midwest fuel markets and those here in the Pacific Northwest. And yet, our prices are going up in step with theirs.

Within the Pacific Northwest, there is a small differential in fuel costs. Fuel is more expensive in Bellingham, adjacent to the refineries, than elsewhere. At first, this may seem odd and counter to market logic. It used to be cheaper there than elsewhere, But in 1999, there was a major fuel pipeline explosion with three fatalities, for which the pipeline operator was sued. Subsequent to that, prices were increased in the market that did the suing. This isn't something that would work in a free market, but it is quite easy to do if there is collusion in the industry.

That collusion may extend across national markets in the form of agreements to keep fuel prices uniform and set by the highest cost areas.

Ever hear of competitive bidding?

ever hear of scalping be sanctioned?

mho v=83e

Ever hear of collusion? Competitive bidding doesn't work in those conditions.

I think it unlikely there is collusion. Those kind of secrets are hard t= o keep, especially when lots of people are involved. The company that I work for needs about 1.7 million gallons of diesel per= day to deliver a very small percentage of the food in US supermarkets. We have = a dept of about 300 people who trade fuel and look for spot market deals. We have = to go higher than our competition if we want fuel. Then the next day they outb= id us by

0.1 cents per gallon for 100k gallons. And so forth. If there is any collusion, I would say its between the environmentalists = and the unions that are trying to destroy the US economy.

It is easy (and correct) to say that the oil industry has a monopoly on oil. Of course, every industry has a monopoly on the product of their industry. Which oil company in particular has a monopoly on oil?

BTW, at least several years ago (don't know today) major owner of oil industry was unions in their pension funds.

Why do you buy on the spot market at those volumes? Your purchasing department should be working with hedging strategies and long term supply contracts.

Different topic, but I will say this: It strikes me as rather suspicious that the oil companies have been so eager to jump on the EPS's bandwagon of regional fuel formulation requirements. I think it allows them to segment the market which helps support higher prices.

[snip]

No single company does. That's why inefficient markets can only be explained by things like collusion.

Look at the oil biz another way: Many oil futures, long term delivery contracts, etc. are based upon an index called the "West Texas Intermediate Crude" price. This is the spot price of crude oil at a certain point in the Texas distribution system. Practically all futures contracts and other oil related prices are tied to this (or a few other) benchmarks. The problem is that the volume of product measured at this point is relatively small. It is trivially easy for a few major producers to manipulate this, and due to its key position in market pricing structures, world market prices.

Its sort of like quoting all supermarket food prices as some fraction of the daily price of Beluga Caviar.

There are a number of other oddities about the way the oil markets are run. Given our economies critical dependence on petroleum, I find it quite strange that various regulatory agencies like the SEC don't step in and lay down some rules.

don't buy anymore than you have to, and cut your purchases back whenever you can.

it's hard to deal with a "bastard trick" mentality.

mho v=83e

The answer to your question is answered with your first statement above: Demand.

There isn't a link between markets for oil and fuel? How in the world did the gulf coast, midwest and pacific northwest isolate themselves from the worldwide market for petroleum products. The only way for that to happen would be for there to be no shipments of crude and finished products into into or out of that area and I've yet to see an area isolate itself.

Are you saying there is collusion in pricing, if so please list your sources.

There is no distribution network for refined product that connects the Pacific Northwest and the Gulf Coast. Logically, when the refinery capacity was taken off line by Katrina, that should have resulted in a temporary reduction in demand for crude oil (for which there is a global distribution system) and therefore a drop in price here.

See my explaination above. I don't know what you mean by 'sources'. If it is direct evidence of collusion, then it would already be on its way to the US Justice department.

On the other hand, it would be interesting to see the NSA go though its communication intercepts and see if they can detect any patterns involving various energy companies, the Global Petroleum Research Institute, and other interested parties.

But the refiners in those markets are not removed from the world market for oil. They can't be isolated from the world price for oil.

You are implying that there is collusion in the setting of oil prices. I am asking for how or where you got that information. It is an accusation of a very serious nature that is very easy to make on a forum.

Why didn't the price of oil respond to a reduction in demand at the time?

Its very serious and congress is busy looking into it. Price data is pretty easy to come by on the 'Net and anybody that cares to look at it can draw their own conclusions about market price distortion. As to the actual existence of collusion, the courts will have to decide whether circumstantial evidence is sufficient, or hope that a few industry insiders come forward in hopes of receiving shorter prison sentences.