knobbie mefo

[Spike55]

What you are referencing is "refining ratios" or the "crack spread", which is the monetary representation ($ to $ ot $). (I know someone will have fun with this one). This ratio can be a 3:2:1 or a 5:3:2. This represents 3 barrels of crude oil in with 2 barrels of gasoline and 1 barrel of heating oil (could be used for diesel fuel) out. The 5:3:2 is the same product relationship. Again, the crack spread is the $ ratio of this physical relationship (crude oil $ in and the market value $ of gasoline and heating oil out). Don R100, A6F

--- In DSN_KLR650@yahoogroups.com, "Randy Shultz" wrote: > > --- In DSN_KLR650@yahoogroups.com, jokerloco9@ wrote: > > > > I agree with some of your math. Yes, the cost of a barrel of oil is > higher > > (actually about $72 a barrel, not $62). But your gas price going up > that > > 3.86 multiple is assuming ALL costs associated with oil have gone up > 3.86 times. > > > > transportation and refining costs have not gone up 3.86 times. > > > --- > > I don't know what the break-out is today, but two years ago the cost of > oil made up about 50% of the cost of gasoline. About 18% was refining > costs, including their profit margin, and almost 25% was taxes, the > rest being marketing and distribution. > > Keep in mind that only about 50% of a typical barrel of crude winds up > as gasoline. >

[Greg Schmidt]

Thanks for explaining crack spread. I thought it had something to do with a rear view of an overweight plumber while installing a faucet. Man, this is looking like an oil thread...ohhh, wait, it is an oil thread! Can't help but chime in either. Gas prices are such a hot topic. Nobody likes paying more to be able to move around. It's not going to get any better. Take your bike instead of the car when you can. Count it as a small contribution to lowing consumption - and the treat yourself at the same time. Want to do that dream tour? Do it as soon as you can. It'll be alot more expensive to do when gas reaches $4, $6, $12 a gallon. Is the world using too much oil?... probably yes. Are the oil companies and others guilty of corporate greed, trying to pay the least and charge the most?...probably yes. Will gas prices ever get lower again?...probably no. Is there anything average citizens can do about it?...probably no. Will we continue to complain and theorize about it?...probably yes. I like the hotdog explanation of supply and demand: a hotdog at my local speedway is 2/$.99 . At the airport, a hotdog cost about $5. Why so much at the airport? Higher overhead?..yes, somewhat. Because they have a captive market?...yes, more so. Why not charge $10-$12 for an airport hotdog? Because nobody would buy a hotdog at that price. They would just do without a hotdog. When will we as a nation build and use more efficient vehicles, utilize mass transit, invest more in alternative energy?...When the hotdog costs too much. Ride now, ride to work, ride to church, ride often, take that tour. Oh, and don't put crack spread on your hotdog! -Camo

> Again, the crack spread is the $ ratio of this physical relationship > (crude oil $ in and the market value $ of gasoline and heating oil > out). > > Don R100, A6F

[Randy Shultz]

--- In DSN_KLR650@yahoogroups.com, "Spike55" wrote:

>

Who in their right mind would build another

> multi-million dollar refinery (assume all of that debt - even if

you

> were rich) to compete against your existing plant(s) or those of

your

> buddies (other oil companies) in an oligopoly situation (almost the > same a a monopoly but with more players), in which you are running

at

> maximum effiency, lowest operating cost, selling every ounce you > make, at the highest prices in decades (relatively and literally)? > There is no incentive for any changes in the infrastructure because > the oil companies have seen it come down as hard as it goes up so > they are going to sit on what they have (wells, pipelines, > refineries, distribution, etc.) for now and repair only what gets > broken. Again, we run our bikes like this. They are doing the

same

> thing on a grand scale. >

--- I don't buy the conspiracy-colusion or whatever you want to call that theory. Some companies have made investments in capacity expansion at their existing plants. I suspect that if you track profit margins, you'll find that capacity investment tracks profit margins, offset by the time it takes to finance, design and implement the projects.

[jokerloco9@aol.com]

Your numbers sound about right. Jeff A20 [Non-text portions of this message have been removed]

[Ronald Criswell]

I believe Hugo Chavez is a member of OPEC. Criswell

On May 17, 2006, at 3:51 PM, Oldrice wrote: > Want real data to explain all this oil crap? It's soooooo simple. > > What are the three BIGGEST oil companies? - check them out. > > What were they're best years - PROFIT? - the last three. Check them > out. > > WHY are these companies making record profits IF the cost to them has > increased? > > It hasn't. > > They're still getting oil at nearly $20 a barrel. Remember, you and > I don't > use oil from the Middle East. Ours is from South America where they > aren't > even a member of OPEC. Ok, the vast majority of our gas in our KLRs > is from > Columbia. The rest is from a multitude of places. But you get my > point. > They're literally taking our money. > > Think about it. > > Geoff- > www.oldrice.com > > > > > > ----- Original Message ----- > From: "Don S" > Subject: Re: [DSN_KLR650] NKLR: Re: Eco Friendly nature of Hybrid Cars > > > Hi Bogdan: > > I used exaggerted figures to make a point. That point is that > the cost > of gasoline per gallon is not proportionate to the relative > increase in the > oil price. Does the price of processing the oil into gasoline > increase > because the oil became more expensive? > > Have you ever wondered why the price of gasoline goes up just > before the > weekend and particularly on holidays with long weekends then drops > within a > day or two afterward? Big Oil sticks it to us more so than the oil > producing countries. > > Please don't try to pass it off as supply and demand. Unless of > course > you believe that the refineries doubled up on capacity (and > operating costs) > during said weekend to make up for difference then sell it cheaper > because > they have too much supply? > > One does not need any particular qualifications other than common > sense to > observe the obvious. > > > Don S. > > Bogdan Swider wrote: > > > > On 5/17/06 2:16 PM, "Don S" wrote: > >> I find it ironic that we point fingers at the oil producing countries >> whenever >> the cost of oil goes up by one cent per barrel and the cost of gas >> goes up >> $1.00 per gallon at the same time! > > I'm no economist, I'm ignorant of the corporate culture in the > energy sector > and don't follow oil futures but didn't oil go from around $40 a > barrel to > $70 ? That's not a cent or am I missing something ? > > Bogdan > > > > Archive Quicksearch at: > http://www.angelfire.com/ut/moab/klr650_data_search.html > List sponsored by Dual Sport News at: www.dualsportnews.com > List FAQ courtesy of Chris Krok at: www.bigcee.com/klr650faq.html > Member Map at: http://www.frappr.com/dsnklr650 > Yahoo! Groups Links > > > > > > > > > > > --------------------------------- > Yahoo! Messenger with Voice. Make PC-to-Phone Calls to the US (and 30+ > countries) for 2 /min or less. > > [Non-text portions of this message have been removed] > > > > Archive Quicksearch at: > http://www.angelfire.com/ut/moab/klr650_data_search.html > List sponsored by Dual Sport News at: www.dualsportnews.com > List FAQ courtesy of Chris Krok at: www.bigcee.com/klr650faq.html > Member Map at: http://www.frappr.com/dsnklr650 > Yahoo! Groups Links > > > > > > > > > > > Archive Quicksearch at: http://www.angelfire.com/ut/moab/ > klr650_data_search.html > List sponsored by Dual Sport News at: www.dualsportnews.com > List FAQ courtesy of Chris Krok at: www.bigcee.com/klr650faq.html > Member Map at: http://www.frappr.com/dsnklr650 > Yahoo! Groups Links > > > > > >

[Spike55]

You all know that profits come for the difference between starting product cost minus expenses versus the sale price. A new well will need to sell its product at a higher cost to cover interest payments, etc. but over time, those extra costs go away and if the well is still producing, that same well now has a greater profit potential. Think of it like your car / truck. When new, you have gas & maintenance plus interest payments and that is allowing you to make a profit (hopefully) by going to work and earning a wage greater than all of you other costs. After the car / truck is paid off and if your wages have stayed the same (as an example), that difference or profit has increased. The combined difference between the low cost to extract the oil from existing, paid off wells in the USA, OPEC, and other and the current high selling price of crude creates a portion of the big profits. Then that higher priced crude goes into the refineries (owned by the same oil companies many times) to produce the gasoline, heating oil / diesel, and other products at a cost plus profit margin. That gives overall profits another boost. And that happens all the way through the supply / distribution system and you pay the final price at the pump (taxes included). I don't believe that there is any grand conspiracy but Adam Smith's "Invisible Hand" is always at work. It's only human nature. Don, R100, A6F

--- In DSN_KLR650@yahoogroups.com, "Oldrice" wrote: > > Want real data to explain all this oil crap? It's soooooo simple. > > What are the three BIGGEST oil companies? - check them out. > > What were they're best years - PROFIT? - the last three. Check them out. > > WHY are these companies making record profits IF the cost to them has > increased? > > It hasn't. > > They're still getting oil at nearly $20 a barrel. Remember, you and I don't > use oil from the Middle East. Ours is from South America where they aren't > even a member of OPEC. Ok, the vast majority of our gas in our KLRs is from > Columbia. The rest is from a multitude of places. But you get my point. > They're literally taking our money. > > Think about it. > > Geoff- > www.oldrice.com >>

[J T]

>From: Ronald Criswell >I believe Hugo Chavez is a member of OPEC.

Yes, Venezuela is part of OPEC. Remember, US gas prices came down in the 80s after consumers demonstrated that they were unwilling to pay high prices over a sustained period. How'd they do this? By conserving and by buying fuel-efficient vehicles. The market became glutted, gas prices went down, and now it's an SUV in every garage... I'm sure someone will call for this thread to be shut down soon, but I've learned a lot. And I tend to think that it's important for citizens to have these kinds of conversations. For what it's worth, here's a breakdown of the price of gas relative to the price of a barrel of oil. It's from a Calif. gov't web site: ~~~~~~~~~~~~~~~~~~~~~~~~~~ For every one dollar increase of the cost of a barrel of crude oil, there is an average increase of about 2.5-cents per gallon of gasoline. So, a $10 increase per barrel in crude prices means a 25-cent increase at the pump. The $29 increase in crude oil from January 4, 2005, to April 11, 2006 means a 70-cent a gallon increase in gasoline prices. This additional cost will not go away until crude oil prices start to come down. Taxes for gasoline in California are: 18.4 cents/gallon for federal excise taxes; 18 cents/gallon for state excise taxes; and local and state sales taxes. Sales taxes vary depending on the city and county you may be in...but on average the sales tax, roughly 8 percent, adds between 16 and 25 cents to a gallon of gasoline, depending on the local rate and the final price of the gasoline. _________________________________________________________________ Express yourself instantly with MSN Messenger! Download today - it's FREE! http://messenger.msn.click-url.com/go/onm00200471ave/direct/01/

[Bogdan Swider]

> The only thing Americans understand is money. >

In contrast to the Canadians and Mexicans to name our neighbors or to the French, maybe the Africans or is it the Chinese ? In some areas Americans and others obviously make decisions that work to their monetary advantage. Raise a couple of kids now there s a way to make money. Then send them to college to really clean up. How about volunteering to clean a trail, stuffing envelopes for a political candidate or attending church ? Wait....maybe the only thing we don t understand is money. Buying a klr however, does make financial sense as does working on it yourself. Bogdan, for whom the money keeps rolling in and then rolling out [Non-text portions of this message have been removed]

[Russell Scott]

IMHO The oil companies make about a 7% net profit on their sales. Most of it is reinvested into the business. I know the newest deep water drilling platform in the gulf cost 3.5 billion dollars. From what I understand there is more known oil reserves under Colorado and Utah than all the known OPEC reserves combined. But how can you have a global economy without nations having an economy. And since so many poor nations only resource is oil, I believe there has been an intentional and systemic attempt by the CFR, State Department, U.N., and all the globalist think tanks to keep our oil off the market, and instead buy oil from foreign governments, to prop up their economy. Then we can all live happily ever after under the god of greenies. But 9/11 showed us that this is a fantasy with a nightmare ending. But delusional thinking tends to dismiss reality, and the goal of these organizations remains the same, even if the consequences could end in a nuclear nightmare. R -----Original Message----- From: DSN_KLR650@yahoogroups.com [mailto:DSN_KLR650@yahoogroups.com]On Behalf Of J T Sent: Thursday, May 18, 2006 4:25 AM To: roncriswell@...; oldrice@... Cc: bSwider@...; jck22903@...; DSN_KLR650@yahoogroups.com; dbs52a@... Subject: Re: [DSN_KLR650] NKLR: Re: Eco Friendly nature of Hybrid Cars

>From: Ronald Criswell >I believe Hugo Chavez is a member of OPEC.

Yes, Venezuela is part of OPEC. Remember, US gas prices came down in the 80s after consumers demonstrated that they were unwilling to pay high prices over a sustained period. How'd they do this? By conserving and by buying fuel-efficient vehicles. The market became glutted, gas prices went down, and now it's an SUV in every garage... I'm sure someone will call for this thread to be shut down soon, but I've learned a lot. And I tend to think that it's important for citizens to have these kinds of conversations. For what it's worth, here's a breakdown of the price of gas relative to the price of a barrel of oil. It's from a Calif. gov't web site: ~~~~~~~~~~~~~~~~~~~~~~~~~~ For every one dollar increase of the cost of a barrel of crude oil, there is an average increase of about 2.5-cents per gallon of gasoline. So, a $10 increase per barrel in crude prices means a 25-cent increase at the pump. The $29 increase in crude oil from January 4, 2005, to April 11, 2006 means a 70-cent a gallon increase in gasoline prices. This additional cost will not go away until crude oil prices start to come down. Taxes for gasoline in California are: 18.4 cents/gallon for federal excise taxes; 18 cents/gallon for state excise taxes; and local and state sales taxes. Sales taxes vary depending on the city and county you may be in...but on average the sales tax, roughly 8 percent, adds between 16 and 25 cents to a gallon of gasoline, depending on the local rate and the final price of the gasoline. _________________________________________________________________ Express yourself instantly with MSN Messenger! Download today - it's FREE! http://messenger.msn.click-url.com/go/onm00200471ave/direct/01/ Archive Quicksearch at: http://www.angelfire.com/ut/moab/klr650_data_search.html List sponsored by Dual Sport News at: www.dualsportnews.com List FAQ courtesy of Chris Krok at: www.bigcee.com/klr650faq.html Member Map at: http://www.frappr.com/dsnklr650 Yahoo! Groups Links

[revmaaatin]

TOP POSTED---- Don, What a great, and thoughtful post. It has been 1973-5 since I took an economics course in college and your explanation was very insightful and helpful. thanks. Your explanation of inelastic supply is not one that I remember from Econ 101. One example I do remember is this, "The economic post-hole." (Yes it was Ag-Econ 101) and the concept was this: Make sure THIS is where you want the post hole when you dig it, because there is not much market for a post-hole dug in the wrong place. It is very much like building a new refinery with the stricter requirement...and the CEO's just shrug their shoulders and fiddle with their own post- holes. Whatever the reason, $3 gas and rising, is painful. revmaaatin.

--- In DSN_KLR650@yahoogroups.com, "Spike55" wrote: > > Without getting in too deep, a barrel of anything is 42 gallons (US) > and is the basis for a futures contract on the New York Merchantile > Exchange (NYMEX). Each futures contract is for 1,000 barrels or > 42,000 gallons of product. Heating oil, unleaded gasoline, light > sweet crude oil, and propane are all based on that volume but their > advertised prices are given differently: $70 / barrel for light sweet > crude, $1.90 / gallon for heating oil, unleaded gasoline , and/or > propane. > > The natual gas futures contract is based on 10,000 millon british > thermal units (BTU's), which is normally written 1 MMBTU (roman > numeral M = 1000 so MM is 1000 x 1000 = 1,000,000). The advertised > NYMEX prices is say $6.50 MMBTU's right now. (Our Canadian brothers > and sisters have to deal with giga-joules but again, I'm not going > there.) > > As late as 1998 / 1999, the price per barrel of light sweet crude oil > was down as low as $9.00 (US). This occured when the Pacific Rim > countries were suffering a huge economic downturn and in turn, they > were not using much oil at all. Oil, like natural gas, like milk out > of a cow comes out at about the same rate all of the time whether you > needed it or not. This is an example of inelastic supply - can't > throttle it up or down easily. Depending how closely your demand > corresponds (exceeds or falls below) to that flow of product, prices > will fluctuate to move the product. > > It is ever increasingly apparent that demand for gasoline (energy in > general) is becoming inelastic too (inelastic demand). It seems as > we have become spread out in suburbia and frequently travel longer > distances for work and play, no matter what the price, we are going > to pay it. Many industries and electric utilities are the same way > and will pay the price and then past that on to the customer through > a fuel adjustment surcharge (based on such and such a benchmark). > > If you believe we have plenty of crude oil is available to come into > the USA and that the lack of refinery capacity is the bottleneck, > then please be aware that it isn't NIMBY, or environmentalist that is > 100% of the problem. Who in their right mind would build another > multi-million dollar refinery (assume all of that debt - even if you > were rich) to compete against your existing plant(s) or those of your > buddies (other oil companies) in an oligopoly situation (almost the > same a a monopoly but with more players), in which you are running at > maximum effiency, lowest operating cost, selling every ounce you > make, at the highest prices in decades (relatively and literally)? > There is no incentive for any changes in the infrastructure because > the oil companies have seen it come down as hard as it goes up so > they are going to sit on what they have (wells, pipelines, > refineries, distribution, etc.) for now and repair only what gets > broken. Again, we run our bikes like this. They are doing the same > thing on a grand scale. > > My 2 cents. Don R100, A6F > > >