Oil drops $3 despite Iran uranium news - glut at key Oklahoma storage hub

Oil drops $3 despite Iran uranium news

Below $62 a barrel, glut at key Oklahoma storage hub

http://www.msnbc.msn.com/id/12400801/

Updated: 1 hour, 44 minutes ago

NEW YORK - The price of crude oil fell nearly $3 and settled below $62 a barrel Monday
on a supply glut at a key North American delivery point as geopolitical tensions loomed.

An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate
effect on prices, said Citigroup Global Markets energy analyst Tim Evans.

Because the hub serves as a delivery point for oil, the facility is the “Achilles heel” for the
petroleum market, he said. As it nears capacity, dealers have no place to store more oil should
they want to take advantage of low prices on the May futures contract, which expires April 20,
Evans said.

“We simply woke up on the wrong side of the bed,” he said, adding that traders knew of the glut
last week. “Somebody’s alarm went off and it was time to sell May crude.”

Light, sweet crude for May delivery fell $2.77 to settle at $61.51 a barrel in electronic trading
on the New York Mercantile Exchange.

snip-->

Meanwhile, refineries in Texas are scrambling to keep up with record demands in the U.S.
as production problems persist, Flynn said.

Gas prices could remain high even after the refineries come back online, because the usual slack
in demand between the winter heating season and summer driving months has yet to materialize,
he said.

Last week’s annual report by the U.S. Energy Information Administration showed a larger-than
expected increase in gasoline supplies but lower refinery output. The price of unleaded gasoline
fell 3.42 cents Monday to settle at $2.0946 a barrel.

---------------------

So? That means.....the price of gas will still go up! Summer's coming!!
What's the price near you? It's about @$2.70 near me for regular unleaded.

is between $2.69 and $2.75. Last time I was here about a month ago, it was $2.35

but I just went out and it's now $2.60 a gal. reg. unleaded,
at the station near me. Maybe that station owner got a deal? :shrug:

on edit: spelling

How the hell are families affording it? :shrug:

I'm going to have to move near public transportation.

:evilgrin:

That's some wholesale to retail mark up
esp. considering the retail outlets (gas stations)
only make a few cents per gallon

Somebody let out info that only smart people see

Quite the mark up!! :grr:

..

but it's still quite a mark up

I don't know why though.

BTW
a shout out to my good buddy who is
Living On Tulsa Time

:hi:

I just called my mom and asked her (she knows the oil biz for 70 years) and she thinks it was because it was the standard size of wooden barrels from long ago before they made them out of steel. Before my time. :D
:toast:

and a Mom for that matter

I'm still your buddy and hope to FTF oneday

If you see Rodger
send him my regards

Why are the prices still so high and why aren't the refineries producing more?

And then I saw this. ;)

Also: How come no one is building new gasoline refineries?

http://www.msnbc.msn.com/id/18011209/page/2/

We do see investment, but not in brand new refineries. One reason is that it’s very hard to get the permits and approvals to build a new gasoline refinery close enough to the people who need the gasoline.

Some of that investment, though, doesn’t produce more gasoline — it produces cleaner gasoline. Refiners recently completed a round of hundreds of millions of dollars of investment to upgrade their equipment to produce low-sulfur diesel in order to meet new, tougher clean air rules.

Refiners do, however, constantly upgrade their plants to squeeze a few more gallons out of each facility. To do that — putting in a new unit to squeeze more capacity or installing bigger pumps to move that product through the system — they’ve got to shut the plant down. That means a temporary drop in production — usually in late winter/early spring when the heating oil season is winding down and the driving season hasn’t year heated up. This year, those planned shutdowns dampened production even though demand remained fairly strong.

So while there are no new refineries, the capacity of the existing ones has been steadily rising. At the start of 1983, U.S. refineries churned out 6.2 million barrels of gasoline a day. By the beginning this year, production reached 9.2 million barrels.

Unfortunately, that still hasn’t been enough to keep up with demand. At the end of March, American drivers burned through about 9.5 million barrels of gasoline a day — or more than 400,000 barrels more than this time last year, according to the latest Energy Department data.
When demand is stronger than supply, prices go up. Last week, pump prices were up 9.7 cents to 270.7 cents per gallon, according to the Energy Dept. — the ninth consecutive increases. Prices are now 11.9 cents per gallon higher than at this time last year.

more..........

----------------

Bottom line? We're all fucked.

A national oil company could buy futures and set an unchanging price that, at first, would be, say, a nickle a gallon more than than the private oil companies are seeking oil for on a given day. The national company would not affect oil company profits because everyone would still be buying their oil from the private companies -- unless the prices rose sharply. But when oil companies again become rapacious and want to send prices skyrocketing, they would be unable to do so, because the national oil company would still be selling for the same, previously established price.

It would be the best of both worlds -- profitable capitalism checked by public-minded socialism.