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Post by jeffolie on May 30, 2008 11:25:34 GMT -6
NYMEX to Change Margins for Crude Oil, Related Futures Contracts NEW YORK, N.Y., May 28, 2008 -- The New York Mercantile Exchange, Inc. today announced margin changes for its crude oil and related futures contracts, beginning at the close of business tomorrow. Margins for the crude oil, crude oil calendar swap, and crude oil financial futures contracts will increase to $7,750 from $7,250 for clearing members, to $8,525 from $7,975 for members, and to $10,463 from $9,788 for customers. nymex.mediaroom.com/index.php?s=43&item=1864This probably was the reason for the decline in oil. the reason for the decline in oil: margin changes
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Post by Cactus Jack on May 30, 2008 12:27:48 GMT -6
Not so odd when you look at it.
Pump prices that is. Adding in the excise taxes imposed by the Fed and States, the pump price for regular unleaded gasoline averages about 3 cents per U.S $ price per barrel of oil, depending upon location relative to refinery closeness. At $133 p/bbl, pump prices are around $3.99 per gallon.
What is shocking is that recently when price goes up, pump prices rise according to the 3¢ per $1 bbl cost. But when it drops, like it did Tuesday, by $3.34 p/bbl, the pump prices (that should've dropped 10¢ per gallon) stayed the same, and when it dropped by another $4.11 p/bbl on Thursday the pump prices didn't decrease 12¢ per gallon, actually went up.
Everybody likes to blame Big Oil for the price increases, I'm believing retailers and wholesale suppliers are more to blame (taking bigger profits) while saying they're not making any money on the sale of motor fuels.
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Post by graybeard on May 31, 2008 4:04:04 GMT -6
What's the time lag from wellhead to gas tank? Was there a price lag on the way up?
The retailers and wholesalers are largely the big oil companies. Where they show the profit depends on their accounting shenanigans, not on real numbers.
Reagan doomed us when he killed the ant-trust division of the Justice Dept.
GB
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Post by blueneck on May 31, 2008 4:23:46 GMT -6
The retailers operate on razor thin margins. They make their money on the conveneince store items. Back in the day when they used to be real service stations they made thier money on repairs. One drive off and they just lost their profit on a tank of fuel
I have a family member who works for a refinery - the refineries actually lose money. The money is being made by the producers and the commodities speculators
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Post by graybeard on May 31, 2008 4:43:56 GMT -6
I also have a relative, who works for a Texaco/Shell/whatever refinery. They have been showing $millions in profit every month.
GB
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Post by blueneck on May 31, 2008 6:12:28 GMT -6
Maybe thats the case for texaco, but I can tell you that the independents are not making money. Their costs for crude have gone up just like everyone elses cutting in to their margins. refining is all about efficiencies. when they have to set up for different formulations and thei feedstock costs go up they don't have much room to react
This is the primary reason we don't see new refineries - they are not considered a profit center by the oil companies, and the start up costs are prohibitive for an independent. The refinery is overhead and operating costs to the oil companies, just like any other physical plant is considered
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Post by Cactus Jack on May 31, 2008 7:01:56 GMT -6
Petroleum speculators are a big reason oil prices are so high -- in fact, so economists believe if the speculative market were reigned in, petroleum would float at the $50-55 p/bbl price -- which would bring gasoline prices down to about $1.65 per gallon price.
According the CFTC (Commodity Futures Trading Commission) a 6-month probe into oil trading practices is currently going on, and only Thursday announced that it will require energy trader to begin providing more info to the Fed so it can better assess what effect they are having on the oil market.
When the news of the probe went public (something the CFTC rarely announces while ongoing probes being conducted), the speculative market on oil dropped something over $4 p/bbl.
According to the announcement, the CFTC is examining not only the futures contracts but also the purchase, transportation, storage and trading of crude oil by producers and refiners to determine if and/or how oil prices are being manipulated.
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Post by graybeard on May 31, 2008 20:28:46 GMT -6
Independents are being squeezed by big oil, with the goal to bankrupt them, then buy the pieces. Their situation is not that of the whole market.
GB
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Post by Cactus Jack on Jun 2, 2008 7:54:14 GMT -6
Independents cannot compete with Big Oil, anymore than Mom-and-Pop (M+P) stores can compete with the bigbox SuperStores (like Wally-World) b/c the behemouths can afford, by sheer size and wealth, to influence what they pay for products. Few independents or local M+P stores go directly to foreign suppliers to get their products; they have to buy from middle sales providers that have more clout in the foreign markets or pay a higher price for locally made products.
Unfortunately, Congress punishes businesses (with more regulations, taxes, laws) which do business in the U.S moreso than them that go overseas, thanks to lucrative free trade agreements (FTAs) that encourage offshore trading rather than onshoring.
In my books, FTAs are more harmful than beneficial. They make the U.S more dependent on other nations than on independent on itself. FTAs are the scourge of societies, and its social fabric ..and they will be its undoing; just you wait and see.
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Post by agito on Jun 7, 2008 23:16:44 GMT -6
an easier and quicker way to find out would be to release some 50 million barrels from reserves and see what happens.
hmm... wonder if republicans might get desperate enough to try it as a august or september surprise...
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