Peak Oil Redux Part IV
From 05/27/05 Oil Price Redux:
...In "The Formula," when a cringing underling suggests to an oil executive (Marlon Brando) that the price of gasoline at the pumps be raised, and then blamed on the Arabs, Brando's retort says it all: "Arthur, your missing the point, we are the Arabs."
Many of those who believe what they are fed by the media want to blame a veritable plethora of hobgoblins and media hyped stories. Such as, oil field worker unrest, political instability, refining capacity, oil reserves, weather, demand from China and increased global demand.
Granted refining capacity is less than in 1980, and this is by design and necessity. Refineries in the USA are a non PC environmental issue, thats why none have been built since the 70's, no one wants it in their hood.
Isn't that convenient though? Why weren't additional refineries built in Mexico? This is where industrialist's drop toxic material at Maquiladoras like Paris Hilton drops her linen before she starts sinnin. Come on now, we've outsourced everything else through Globalization. Sounds like a refinery shortage by design to me.
Oil demand has increased, but very little, as technological efficiency has more than made up for the increases in demand. In addition, the EIA numbers prove that China is importing only 3% of the worlds oil to supply 33% of their energy needs, so don't even try to pin the tail on that false donkey's ass.
The real reasons for energy price increases: the systematic debauching of the dollar over the last few years by the central banks and control of the oil arbitrage industry by the oil companies and Wall Street brokerages themselves.
All oil exchanges are paid in Dollars, 40% down on the dollar means oil prices go from $15 to $45 real quick. In the meantime, what is left of the seven sisters (4), their hedge fund friends, the brokerage houses and The Carlyle Group have made a windfall fortune off of leveraged speculation runups.
What blows my mind is while these guys are bending over the public, and profiting hand over fist after giving us the business, the public is still floundering around looking for rationalizations, let alone a single legitimate answer.
Alrighty then, more huffing and puffing about the cartel and control, but valid points on economies of scale, technological advances, artifically constrained refining capacity and the Chinese demand canard.
In particular, the artifically constrained refining capacity has a vast effect on prices at the pump. But who really controls that? Obviously, the oil companies like what's going on. This is profitable for them.
Are the sisters duplicitous with oil suppliers in this matter? If for example, OPEC has excess capacity, and they want to lower the price of oil, they just open the pumps. If they want to increase the price, they shut the pumps off.
That pricing power potentially undermines any effort by U.S. oil companies to make massive capital investments into refineries or alternative fuels.
If a foreign cartel has the ability to destroy the profit margin you need to finance the capital investment needed, what is a sure thing now may be a financial disaster by the time the facility is built.
If Saudi Arabia wants to halt domestic construction, it need only increase oil supply. But remember over the last 5 years U.S. oil imports have been shifted away from the Persian Gulf.
The order of the nations from which the United States imported oil during the first quarter of 2004 was:1. Canada (2.12 mbd); 2. Mexico (1.60 mbd); 3. Venezuela (1.54 mbd); and 4.Saudi Arabia (1.46 mbd).
The alleged stranglehold that the "Arabs" have over U.S. oil supplies, does not exist. America receives less than one-fifth of its imported oil from the Persian Gulf, while by contrast, it gets more than half of its imports from four countries: Canada, Venezuela, Mexico in the Western Hemisphere, and Nigeria.
So who really holds the cards? or is it just a "Mexican" stand off? What is needed is a difusion of the markets "seeming inability" or unwillingness to break away from the status quo of oil as the main source of energy.
This is a form of market intervention which is necessary when Adam Smith's "invisible hand" of the "free market" (an academic's fable) somehow fails to magically appear. Special governmental tax benefits, societal incentives and credits to encourage less dependency on foreign oil and OIL ITSELF as an energy source.
But will the attendant geopolitical ogliarchy (power structure)allow such a vast change and risk losing control? Stay tuned, no flipping, more to come in Part V.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
...In "The Formula," when a cringing underling suggests to an oil executive (Marlon Brando) that the price of gasoline at the pumps be raised, and then blamed on the Arabs, Brando's retort says it all: "Arthur, your missing the point, we are the Arabs."
Many of those who believe what they are fed by the media want to blame a veritable plethora of hobgoblins and media hyped stories. Such as, oil field worker unrest, political instability, refining capacity, oil reserves, weather, demand from China and increased global demand.
Granted refining capacity is less than in 1980, and this is by design and necessity. Refineries in the USA are a non PC environmental issue, thats why none have been built since the 70's, no one wants it in their hood.
Isn't that convenient though? Why weren't additional refineries built in Mexico? This is where industrialist's drop toxic material at Maquiladoras like Paris Hilton drops her linen before she starts sinnin. Come on now, we've outsourced everything else through Globalization. Sounds like a refinery shortage by design to me.
Oil demand has increased, but very little, as technological efficiency has more than made up for the increases in demand. In addition, the EIA numbers prove that China is importing only 3% of the worlds oil to supply 33% of their energy needs, so don't even try to pin the tail on that false donkey's ass.
The real reasons for energy price increases: the systematic debauching of the dollar over the last few years by the central banks and control of the oil arbitrage industry by the oil companies and Wall Street brokerages themselves.
All oil exchanges are paid in Dollars, 40% down on the dollar means oil prices go from $15 to $45 real quick. In the meantime, what is left of the seven sisters (4), their hedge fund friends, the brokerage houses and The Carlyle Group have made a windfall fortune off of leveraged speculation runups.
What blows my mind is while these guys are bending over the public, and profiting hand over fist after giving us the business, the public is still floundering around looking for rationalizations, let alone a single legitimate answer.
Alrighty then, more huffing and puffing about the cartel and control, but valid points on economies of scale, technological advances, artifically constrained refining capacity and the Chinese demand canard.
In particular, the artifically constrained refining capacity has a vast effect on prices at the pump. But who really controls that? Obviously, the oil companies like what's going on. This is profitable for them.
Are the sisters duplicitous with oil suppliers in this matter? If for example, OPEC has excess capacity, and they want to lower the price of oil, they just open the pumps. If they want to increase the price, they shut the pumps off.
That pricing power potentially undermines any effort by U.S. oil companies to make massive capital investments into refineries or alternative fuels.
If a foreign cartel has the ability to destroy the profit margin you need to finance the capital investment needed, what is a sure thing now may be a financial disaster by the time the facility is built.
If Saudi Arabia wants to halt domestic construction, it need only increase oil supply. But remember over the last 5 years U.S. oil imports have been shifted away from the Persian Gulf.
The order of the nations from which the United States imported oil during the first quarter of 2004 was:1. Canada (2.12 mbd); 2. Mexico (1.60 mbd); 3. Venezuela (1.54 mbd); and 4.Saudi Arabia (1.46 mbd).
The alleged stranglehold that the "Arabs" have over U.S. oil supplies, does not exist. America receives less than one-fifth of its imported oil from the Persian Gulf, while by contrast, it gets more than half of its imports from four countries: Canada, Venezuela, Mexico in the Western Hemisphere, and Nigeria.
So who really holds the cards? or is it just a "Mexican" stand off? What is needed is a difusion of the markets "seeming inability" or unwillingness to break away from the status quo of oil as the main source of energy.
This is a form of market intervention which is necessary when Adam Smith's "invisible hand" of the "free market" (an academic's fable) somehow fails to magically appear. Special governmental tax benefits, societal incentives and credits to encourage less dependency on foreign oil and OIL ITSELF as an energy source.
But will the attendant geopolitical ogliarchy (power structure)allow such a vast change and risk losing control? Stay tuned, no flipping, more to come in Part V.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
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