The California Black Gold Rush

Posted by Equity Private, Apr 10, 2008, 2:13pm

Furious that President Bush has refused so far to press the big green button under his desk labeled "reduce crude oil prices by 20%," congresscritters Edward J. Markey of Massachusetts, Rahm Emanuel of Illinois and Peter Welch of Vermont penned a sternly worded letter to the White House yesterday. This follows weeks of protests by truckers all over the country, but particularly in California, demanding the immediate suspension of the relationship between supply and demand, and calls by other elected officials not just to stop the massive supply crunch caused by the diversion of 0.7% of daily national consumption to the Strategic Petroleum Reserve, but also to open the spigot on the Reserve and let every drop of its 34.2 day supply crush oil prices down to $50 a barrel again, "where they belong."

Asked if a large part of the problem wasn't the dollar's poor exchange rate against, for example, the Euro, Markey, was hear to shout "Damn the Germans and David Hasselhoff!"

A quick review, however, reveals some interesting things about gasoline prices in California (see anything that gives you ideas?)

Of course, this doesn't include county and city taxes in e.g., Los Angeles.

Oil prices rise to record $110 a barrel [Los Angeles Times]

Related: Oil Energy Money

0Recommend this! 38Comments

Comments

Posted by american bandersnatch, Apr 10, 2008 2:25PM

I assume the chart is fascinating. Unfortunately, my company's internet security software doesn't allow the link. Could you work some of that computer vodoo that you do?

Posted by ep, Apr 10, 2008 2:27PM

Well, that's annoying.

Try:

http://spreadsheets.google.com/pub?key=pUGWFYLH_d71bEkDn5Pu4Jg

Posted by guest, Apr 10, 2008 2:30PM

Okay, maybe i'm a little crazy here, but isn't the only thing on this spreadsheet that doesn't fit the refinery costs and profits? Shouldn't the costs be steady to refine the crude? I mean, it's still the same oil, right? The only difference is that the refiners are price gouging because they feel like it. Oh, and you know, sure, there are a lot of taxes in gas, and that sucks, but whatever.

By the way, truckers use deisel.

Posted by guest, Apr 10, 2008 2:31PM

Maybe if we didn't have millions of idiots driving around suburbia in Chevy Yukons, we wouldn't have this problem. Oh, and if knocked China back to the stone age somehow.

Posted by american bandersnatch, Apr 10, 2008 2:31PM

Thanks, but my paranoid company still chart blocks me with an

"Access Denied (content_filter_denied)

Your request was denied because of its content categorization: "Computing/Internet;Personal Network Storage;Interactive Web Applications"

Posted by guest, Apr 10, 2008 2:40PM

@2:30. No, while the cost of the actual process of refining a barrel of crude isn't contingent upon the price of that barrel, the refiner's profit margin depends on what the market is willing to pay for the finished product (gasoline in this example.) If crude is rallying and gasoline prices are steady, that's cutting into the refiner's profit margin.

Posted by diablo, Apr 10, 2008 2:45PM

The variance in refinery charges is intriguing... and yes, this chart has very little to do with trucks (except for crude costs) because trucks use diesel. While regular gasoline prices have gone up 53% in one year, diesel prices have gone up 111%. (In California is 43% vs. 114%).

So it's not only the speculators jerking around the price of crude, but refineries are also taking advantage, no surprise here.

Finally, the joke about the euro and the dollar is pretty weak. I doubt EP will care to explain it.

Posted by guest, Apr 10, 2008 2:46PM

We need to have a profit's tax on the taxes that the government collects on Oil! How dare they collect that much!

Posted by guest, Apr 10, 2008 2:50PM

I guess it's too much to expect people to remember Econ 101 on a business blog. Refineries are subject to the whims of supply and demand as well. There is a reason why people look at the refinery utilization rate.

Posted by guest, Apr 10, 2008 3:17PM

Agreed. We must eliminate the taxes.


Plus, congratulations on what has got to be the first ever embedded spreadsheet on Dealbreaker.

Posted by guest, Apr 10, 2008 3:19PM

@2:45 ahaha dollar ... weak. classic. you are a timeless wit!

Posted by guest, Apr 10, 2008 3:21PM

My cousin used to be a "diesel fitter" for Victoria's Secret. He'd hold up a thong to a customer and say, "Yes, Diesel fitter!"

Posted by guest, Apr 10, 2008 3:23PM

I bet some posters here would like to embed Bessie and spread her on sheets....

So to speak.

Cornelius Cumquat

Posted by guest, Apr 10, 2008 3:26PM

If you guys are going to talk "refinery talk" you have to use the word "slate" or you'll get no respect. For example, "I'll get the tittie-bar tab because you helped me get my slate balanced."

83% refinery utilization, a worldwide shortage of distillate and everyone who is literate in India and China wants to own a vehicle that uses motor fuel....and they want it NOW. You ain't seen the top yet.

Posted by guest, Apr 10, 2008 3:27PM

You have to give ep credit, she must have some IT in her

Posted by guest, Apr 10, 2008 3:31PM

Spuddin' wells in Ghana and Alberta!

Posted by guest, Apr 10, 2008 3:41PM

The last "new" refinery built in the USA was in 1977.

Posted by guest, Apr 10, 2008 3:48PM

Oh man....if ole Dubya would just get on TV late one Saturday morning and simply state, "I am considering the approval of a sale of 25% of the SPR oil to US refiners on a NET-BACK basis to be repaid at a later date....."

His daddy did it in 1991 and man o man oil and refined products traders just screamed the word "SELL !!!!" until they were hoarse. Took years for that market to recover. And all they did was seriously talk about doing it.

Posted by StupidEquityGuy, Apr 10, 2008 3:50PM

USGS released an update today on the Bakken formation. It was upgraded by 25X (now around 3 Billion barrols of oil)

Its the largest field in the US...

http://www.usgs.gov/newsroom/article.asp?ID=1911&from=rss_home

These are low yielding (100-500 boe) wells, with an average cost now of around 3 plus million before completion if they put in the tri lateral horizontal types...

Its going to put some smaller O&G types into play as its redeveloped using the newer technology...

~SEG

Posted by guest, Apr 10, 2008 4:08PM

Are we calling her Bessie now? Is that, like, a thing?

Posted by guest, Apr 10, 2008 4:11PM

California Blacks are searching for gold? The price of gold is at historic levels and Blacks in Cali are being dienfranchized by the Hispanic comunity. However, I never thought that Blacks in Cali would be searching for gold. Wouldn't it be easier to just rob a pawn shop like usual in Compton?

4:20 Trader

Posted by guest, Apr 10, 2008 4:14PM

@4:08-- I vote for no. unless it's 'bessiecakes'

Posted by guest, Apr 10, 2008 4:17PM

@4:08 You can call her Bess. Or Bessie. Or Mommy. Or Daddy. Or whatever you want. Here's a video of some other terms you can use if you'd like:

http://www.youtube.com/watch?v=ycTOsslOwQw

Posted by guest, Apr 10, 2008 4:23PM

The moonbats in California should solve the problem by fixing the retail price of motorfuels and letting the wholesale price float. That worked like a charm for electricity. Ha! Ha! Ha!

Oh, and maybe try drilling for some of the oil that is about 200 feet off your coastline, expand local refining capacity and beating the snot out of the NIMBY crowd if they open their pie holes.

Posted by guest, Apr 10, 2008 4:28PM

@ 4:23 Jeff Skilling? You have 'net access from jail? I hope you haven't gone on too many 'dates'. But just think, now you've got plenty of hair styling mousse - so to speak. Nice. Don't worry, the doc sez your rectum will heal eventually.

Posted by guest, Apr 10, 2008 4:31PM

Bessie's got a relative in the UK?

http://www.metro.co.uk/news/article.html?in_article_id=131778&in_page_id=34

Posted by guest, Apr 10, 2008 4:37PM

Are we supposed to be outraged at those taxes? I'm thinking that's the least a driver could contribute in order to pay for building and maintaining all those roads, without which a car would be useless. Its not like those taxes are being used to subsidize my metrocard.

And another thing... The sharp price increase in the past year or so shows that gasoline is basically price inelastic. We could raise that tax to European levels and use the funds to improve transit. America would be a better place for it.

Posted by guest, Apr 10, 2008 4:37PM

Are we supposed to be outraged at those taxes? I'm thinking that's the least a driver could contribute in order to pay for building and maintaining all those roads, without which a car would be useless. Its not like those taxes are being used to subsidize my metrocard.

And another thing... The sharp price increase in the past year or so shows that gasoline is basically price inelastic. We could raise that tax to European levels and use the funds to improve transit. America would be a better place for it.

Posted by guest, Apr 10, 2008 4:47PM

@4:31-- why are you such a douche? out of curiosity.

Posted by guest, Apr 10, 2008 4:54PM

@4:28

Wait until the 5th Circuit overturns Skilling's conviction. That decision should come down in about 2 months.

Posted by guest, Apr 10, 2008 4:55PM

Relax, @4:37, EP's spreadsheet shows the taxes going DOWN as a percentage of total gas cost. I think deep in her secret socialist heart she really wants a Eurotax regime just so she and her private equity co-cabalists can pick up refining and distribution assets on the cheap.

Either that, or she has some other idea how to finance the ballooning state and federal deficits. Bake sale, anyone?

Posted by ab, Apr 10, 2008 4:57PM

@4:37

Good point. I think we're supposed to be outraged at the politicians who want to have their cake and eat it too. All three of these pols call for "energy independence" and fighting global warming yet they go berserk when gas costs $3.75 for their constituents.

Crazy idea - high gas prices might do a lot more for the development of mass transit and new energy sources than throwing money at Iowa farmers.

Posted by guest, Apr 10, 2008 4:58PM

"This follows weeks of protests by truckers all over the country, but particularly in California, demanding the immediate suspension of the relationship between supply and demand,... "

Is it just me or has the presence of a cartel in the oil "market" already "suspended" the relationship between supply and demand?

Posted by guest, Apr 10, 2008 5:09PM

Cartels, or monopolies, are selectively tolorated by our government. Unions are another voting block, er, group that is allowed to violate anti trust laws for the benefit of the politicians, er...their members.

Posted by guest, Apr 10, 2008 6:01PM

This case is a prime fit for a touch of Zimbabwenomics. I think the govt needs to pass a law fixing the price of gas/diesel/Red Bull/Grey Goose (anything else that constituents demans) at $0.50 a gallon.

Boom. Problem solved. Worked like a charm in Zimbabwe, why cant it work here? Cali has already experimented with it in the electricity market. And we all know that Nancy Pelosi massively envies Mugabe's and Chavez's progressive policies. So what are we waiting for!

Posted by guest, Apr 10, 2008 8:29PM

Please get Carney back and have Equity Private go AWOL back to her site that nobody reads. I am getting farking tired of this quiz stuff, and where the hell is Waldo crap.

Posted by guest, Apr 11, 2008 3:18PM

China's March Crude Oil Imports Surge 25% to a Record (Update1)
2008-04-11 01:49 (New York)


(Adds analyst's comments in the fourth paragraph.)

By Winnie Zhu
April 11 (Bloomberg) -- China's crude oil imports jumped 25
percent in March to a record as state-controlled refiners
increased fuel production to end shortages in the fastest-
growing major economy.
Imports rose to 17.3 million metric tons, about 4.1 million
barrels a day, the Customs General Administration of China said
on its Web site today, compared with 13.86 million tons a year
earlier. The nation exported 400,000 tons.
China Petrochemical Corp. and China National Petroleum Corp.
are running their refineries at full capacity to bolster
gasoline and diesel supplies. The worst snowstorms in five
decades disrupted fuel distribution in January and February.
Shortages deepened as factories re-opened after the weeklong
Lunar New Year holidays and increased their production.
``The record imports show especially strong demand from
state oil companies who are boosting crude processing to end the
domestic supply shortfall,'' Jason Wu, an oil analyst with
China International Futures (Shanghai) Co., said by telephone
from Shanghai today.
Crude imports rose 15 percent to 45.53 million tons in the
first three months, with the cost increasing 91 percent to $30
billion. The March oil import bill reached $11.7 billion as
international crude prices climbed. China exported 580,000 tons
of oil in the quarter.

U.S., Japan

China's oil imports are the third-highest in the world,
trailing only the U.S., which bought about 10 million barrels a
day last year, and Japan, which shipped in about 4.8 million
barrels a day in February.
Oil-product imports rose 14 percent to 9.08 million tons
in the first three months as refiners strained to end fuel
shortages. They reached 3.13 million tons last month.
Exports of oil products fell 5.6 percent to 3.61 million tons in
the quarter and were 1.19 million tons last month.
China Petrochemical, known as Sinopec Group and China
National Petroleum, the country's two largest oil refiners, will
run their refineries at full capacity to increase oil-product
supplies disrupted by the snowstorms, the National Development
and Reform Commission said Feb. 20.
China shut 7 percent of its coal-fired power plants in
January after the heaviest snowstorms since 1954 paralyzed
power grids and delayed deliveries of the fuel.

`Indefinite' Shortages

Shortages of gasoline and diesel may continue
``indefinitely'' as independent refiners reduce output to avoid
refining losses caused by record crude prices, Sinopec Group
Deputy President Zhang Jianhua said April 9.
Government caps on fuel prices prevent oil companies from
passing on rising raw material costs to customers, discouraging
refineries not controlled by the state from making products for
sale at below cost.
Benchmark New York crude oil prices, up 77 percent from a
year ago, reached a record $112.21 a barrel on April 9.
Coal exports fell 11 percent to 10.2 million tons in the
first three months and were 1.45 million tons last month,
customs said, without giving coal import figures.
China's previous record for oil imports was 14.83 million
tons, set in July 2007. This month's 25 percent gain is the
biggest since then.

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