Question about oil

[HeatherC]

Someone on Facebook mentioned that gas and oil prices don’t have to be rising right now since the oil we are using is what we already have and paid for. This made sense to me but aside from profits what else am I missing?

 

[kdonnel]

Someone on Facebook mentioned that gas and oil prices don’t have to be rising right now since the oil we are using is what we already have and paid for. This made sense to me but aside from profits what else am I missing?

You have to sell a product at the price it takes to buy new inventory to sell.

 

[mom2rtk]

They always price based on where they think the price is going. Not shockingly, the reverse never happens though.

 

[Cannot_Wait_4Disney]

Someone on Facebook mentioned that gas and oil prices don’t have to be rising right now since the oil we are using is what we already have and paid for. This made sense to me but aside from profits what else am I missing?

I have just appointed you CEO of CW4D oil. If you were required to sell gas at a price reflective of what you bought the crude for and you bought at say $60 a barrel and could either refine it or sell that crude for $100 a barrel what would you do? Well you'd make quite a bit more money selling it for the $100. Then whoever bought it would then sell it reflective of that $100 they paid. Now we don't really have that limitation. But the choice is the same. Are you going to refine and sell the gas at a price that $60 a barrel dictated? Or would you just sell it and make more money that way? Or, with no such restriction, are you going to refine and sell it at current pricing rather than that paid for the input? So yo can see how gas prices are going to go up with the expected price of oil in the near future, not what a particular batch was bought at.

 

[HeatherC]

You have to sell a product at the price it takes to buy new inventory to sell.

Now I know what I was missing!

 

[mikehn]

The media says prices are rising, so it shall be. There's no shortage of anything.

 

[tvguy]

The media says prices are rising, so it shall be. There's no shortage of anything.

No, the media is only SHOWING that the prices are rising.

 

[mikehn]

They say it, the public reacts, and then they show it, of course that's what they do.

 

[tcufrog]

The US is releasing 30 million barrels from the Strategic Petroleum Reserve.

My DH is an engineer who co-owns or owns a minority stake in several companies that are involved in oil and gas drilling, although they don't do the drilling themselves. They are swamped with requests for their tools, however, they are hampered by a shortage of parts for their tools. Their customers have been yelling at them but there's nothing they can do. They've outgrown their facility and are looking for a new place they can get ready for when their lease is up in a year but they haven't found a suitable place yet.

 

[cvjw]

Prices are rising due to oil futures. The market is reacting to the fact that it will be harder to get enough oil for the US when we no longer import from Russian or make enough of our own to meet demand.

It is a double edged sword for us. Own lots of energy stocks which are sky rocketing, but also have to fill up our tanks at these insane prices.

 

[Figmentv]

I have just appointed you CEO of CW4D oil. If you were required to sell gas at a price reflective of what you bought the crude for and you bought at say $60 a barrel and could either refine it or sell that crude for $100 a barrel what would you do? Well you'd make quite a bit more money selling it for the $100. Then whoever bought it would then sell it reflective of that $100 they paid. Now we don't really have that limitation but you can see how gas prices are going to go up with the expected price of oil in the near future, not what a particular batch was bought at.

As someone who worked in the oil and gas industry for almost 25 years (refining side), I can say your analogy is spot on. A lot of oil is bought on speculation, stored, then sold when the price goes up. The refinery I worked on has one of the largest tank fields in the Western Hemisphere. The company makes a lot of money storing speculators oil.

However, there are many other factors involved as well. To go through them all and explain would take pages. In the past, the price of oil has been at $100/bbl (and higher). Gas prices went up, though not to this extent.

I’m quite sure the industry won’t come right out and say it, but we’re also seeing “Making hay while the sun shines“. Meaning the industry is making up for lost profits due to the pandemic. Millions of people were working from home, not commuting and not buying gas, limited air travel leading to limited need for fuel, etc. Now, more people are going back to work at their work places, air travel is opening up more (though not so much to Europe now), and summer is coming. Historically, gas prices have always gone up for summer travel. This year, that increase is more than normal.

Another factor is the increased popularity of hybrids and fully electric vehicles.

Really, I could go on and on.

 

[Ms.Minnie]

They say it, the public reacts, and then they show it, of course that's what they do.

He who controls the media controls the masses...

 

[tvguy]

He who controls the media controls the masses...

Fortunately, nobody controls the media. Unfortunately, in this Digital age, many confuse Social Media with the Main Stream Media. And many will believe a Vlogger in Sioux Falls, Iowa, over the New York Times.
And then there are the folks who just have no interest in what is going on outside their house. And when they hear about something months after it happened, they are shocked.

 

[LuvOrlando]

The media says prices are rising, so it shall be. There's no shortage of anything.

Mmmmm, interesting take on it.
Did you not read that a pretty big chunk of fuel sourcing was crossed out of the equation yesterday? This results in less.

 

[kdonnel]

Unfortunately, in this Digital age, many confuse Social Media with the Main Stream Media.

Tabloids were so successful in gaining readers that the mainstream media has adopted many of the story styles. Long past are the days of the mainstream media reporting facts without emotion. I can see why people confuse tabloids, with mainstream media, with social media since all the stories are written in the same style.

 

[BrianL]

Tabloids were so successful in gaining readers that the mainstream media has adopted many of the story styles. Long past are the days of the mainstream media reporting facts without emotion. I can see why people confuse tabloids, with mainstream media, with social media since all the stories are written in the same style.

This is exactly true. The fact is the media today is exactly what we want it to be. We reward them with views and clicks. If hard facts/real journalism got the attention, we would see more of that. It's on us as a society that it is the way that it is.

 

[tvguy]

Tabloids were so successful in gaining readers that the mainstream media has adopted many of the story styles. Long past are the days of the mainstream media reporting facts without emotion. I can see why people confuse tabloids, with mainstream media, with social media since all the stories are written in the same style.

Some have for sure. Not the one's I follow though.

 

[HeatherC]

This is exactly true. The fact is the media today is exactly what we want it to be. We reward them with views and clicks. If hard facts/real journalizm got the attention, we would see more of that. It's on us as a society that it is the way that it is.

We need Walter Cronkite back.

 

[mom2rtk]

Mmmmm, interesting take on it.
Did you not read that a pretty big chunk of fuel sourcing was crossed out of the equation yesterday? This results in less.

I read right here on the DIS a few days ago that it was an insignificant amount. So it must be so….

 

[Ms.Minnie]

Fortunately, nobody controls the media.

If you say so I guess it must be so? Unfortunately, I don't agree.