North Dakota Gas Prices Near Top in the Nation

Moto,

The president increased the Strategic oil Reserve by 25% to 1 billion barrels. This is a huge amount of crude.

It is sophomoric to think that the pumping of that much oil back into the ground. Does not have a effect on the cost of gasoline.

Removing this oil out of ready supply has a direct impact on the price of gasoline and crude....

This increase in the SPR levels was a unilateral action. Taken solely by the president. Under his signature.

And Bush can reverse this unilateral decision at any moment. Without approval from a Petro exec. Or Congress..

Iran/ Iraq has nothing to do with anything.

It's effect has been out of question for years.

Iran/Iraq is a non issue in terms of oil price.

And how about the fact that Bush's administration offered tax credits to oil companies as part of that massive energy bill authored by former Rep Bill Thomas, R-Bakersfield, that has secured Bakersfield over $700,000,000 for our roads two years ago?  Does anyone remember that?

"Gas is in short supply in the Midwest. A combination of storms, fires, and temporary refinery shutdowns for maintenance are to blame."

All Bushes fault...make him pay I say.    Vote him out of office.  Oh ...wait...that 's coming up anyway. 

This increase in the SPR levels was a unilateral action. Taken solely by the president. Under his signature.

Wrong again liar.  The increase in the SPR was passed by COngress, and signed by the President.  If the Democratically controlled congress would like to decrease the SPR, they simply need to pass another law...

Once again, you are exposed as  A LIAR, TKOZY..

Wrong again Rmexico..

How can you claim to have been in the petro industry for 22 years and know so little..

The Congress authorizes money to run the SPR. And at the request of the president. The Republican Congress, in the 2005 energy bill, authorized money to increase the SPR up to 1 billion barrels..

Just like the President could bring th troops home from Iraq tonight. The president can increase or decrease the SPR levels like a magician with a wand..

It is the President that holds the spigot.

The President orders both increases and draw downs of the SPR.

This is a unilateral action. That requires no input from congress..

It is heartening to know you do not argue with the fact that an increase in the SPR does have an impact on price.

The Bush regime has been arguing that topic for 7 years..

Nancy,

The Midwest is in the middle of harvest season. It is killing the farmers to pay the prices they are for diesel fuel. It also effects the price of fertilizers and other necessary farm products.

There is no shortage of crude. Supplies are at 5 year average highs. And increasing weekly. We are just pumping crude back into the ground. Instead of refining it. And we have 10% excess refinery capacity sitting idle as I type this blog.

The president can declare a emergency and order the petro industry to provide the proper maintenance and increase the size of crews to add stability to the petro refinery industry.

Remember. It is not a question of overall lack of refinery capacity. The refineries are only operating at 90% operational capacity. That isn't counting refineries in maintenance. That is 90% operational capacity.

It is not unusual to run refineries and other manufacturing industries at 110% capacity and more. .

100% capacity is not the maximum output of a refinery. It is a arbitrary figure determined to be the most profitable production area. When maintenance and profit are figured.

If the Petro industry continues to operate in a way that it will bankrupt the rest of the American economy. America will have no option but to Nationalize the entire petro industry.

RMexico,

It does not look good for you to be wrong.  Then declare a person a liar concerning a subject you know nothing about.

There is no doubt that I could at some time be wrong about a subject. That does not make me a liar.

I am getting weary of you posting inaccurate information. Then using terms such as 'LIAR' to leave a impression you are speaking the truth.

Setting these facts aside. I will continue to take the high road. I will continue to suspect you are trying to be accurate.

And that you are not intentionally lying..

It is not unusual to run refineries and other manufacturing industries at 110% capacity and more. .

LOL.  Too freaking funny..

Actually, capacity is set by what is safe to operate.  If the feds found out a facility was running over 100% of their limit as defined in their Process Safety program, there would be some people going to jail... And Tkozy is advocating this, even though gasoline prices are dropping.. Amazing..

Tkozy, I would not call you a liar, unless I was certain you were knowingly spreading lies.  ANd you have been knowingly spreading lies..

Congress, through energy legislation, requires that the SPR be expanded.. This was not done unilaterally. Bush cannot unilaterly declare that he is not going to follow thru with the Energy Bill passed by congress.

You know virtually nothing about energy markets, or the petroleum industry.  Virtually nothing..

The president can declare a emergency and order the petro industry to provide the proper maintenance and increase the size of crews to add stability to the petro refinery industry.

Oh really?? So it is the lack of crews that is causing refineries to only operate at 90% of capacity (or whatever you claim they are operating at).  Where do you get the information that it is a labor shortage that is the problem??  And just where will Bush get these well trained and competent crew to work in the refineries?? Where are they now?? Sitting at the "Refinery Colleges" waiting to be called up to work in the refineries?? Just what are they doing now???  It always amazes me about how simple your solutions are.

Yup, there are thousands of well trained refinery engineers and maintenance people right now sitting at home, just waiting for the President to tell them to go to work in the refineries....

Rmexico,

I never said it was a lack of crews that have caused the Petro CEO's to run the refineries at reduced capacity.

Fact is the Petro CEO's are running at reduced capacity in order that they increase profit.

You missed the main point of my post. Or you purposely ignored it. We only need to get the unused capacity back running. We don't need to build any new refineries to get todays prices back to normal..

Let's not also forget, that Petro CEO's have announced the end of the, 'Not in My Back Yard' argument campaign. They have openly stated they do not want to build new refineries. Because it will reduce their profits.

Rmexico, you must have been retired many years. Much of the maintenance and refitting at refineries is done by contractors. Not by permanent Refinery staff. These contractors can be brought in from around the world if necessary. I suppose that would be enough help to get a little refinery in Montana running again.

In fact I had done a lot of work myself on fire protections systems at refineries around Kern County.

I never said it was a lack of crews that have caused the Petro CEO's to run the refineries at reduced capacity.

Oh really.... Then I guess having the president order the refineries to hire more people won't do any good, then will it??

They have openly stated they do not want to build new refineries. Because it will reduce their profits.

Maybe you could provide a link to those statements.  Assuming said is true, how is that keeping Hollywood liberals and other well connected Democrats from starting their own refineries??  If it is such a good business decision to build refineries, how come no one is doing it??

Rmexico,

Will You stop talking about things you know nothing about.

Go look at the EIA websites.

There are plenty of periods in refinery history where total American refinery capacity has run at excess of 100%. and the records go back decades. All you have to do is go look. Stop pulling junk out of a hat. The legitimate records are there for you to read.

Is safety a consideration. Of course it is. Profit and equipment wear and tear are other factors.

The safety concerns are based largely on the break down of equipment. Refineries have been running at 90% and less for 2 years or so now. And we have still had dismal break down and safety records. So slowing down a refinery is no guarantee of increased safety. Neither is speeding up a refinery a guarantee of increased hazard.

Rmexico,

You are wrong on this subject. You are a petro apologist. Give it up..

Rmexico,

You said you were the expert. Why do I have to continue to do the research for you?

It’s tempting to not to let the facts get in the way of a good story, but even the oil industry itself admits this issue is a red herring. For example, the National Petrochemical and Refiners Association conceded at a May 23 Senate hearing on price gouging that gasoline supplies were temporarily tight.  But the oil industry lobby went on to note that:

This situation will ultimately be addressed through announced additions to U.S. refinery capacity, estimated at 1.4 to 2.0 million barrels per day. This is an 8-11percent increase in U.S. capacity, which should be in place by 2010 at the latest…. over the past 10 years, domestic refining has increased by an average of 177,000 barrels per day of production each year or the equivalent of building one new, larger than average refinery each year. This fact should assuage some concerns about the fact that no new grassroots refinery has been built in the U.S. in over 30 years.

Indeed, at a Senate hearing last year, BP’s chief executive officer explained that “[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery.” And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.

http://www.tompaine.com/art...

Iam,

There is indeed good news. The Midwest, after ignoring the west coast cries of energy manipulation. Have now had their fill of it first hand..

America's energy crisis is one that is now driven by national security. There is economic suffering by all sections of America.

There will be an energy policy change. It may take until after Bush is run off. But no matter who is our next president. The petro industry will not have the influence it has enjoyed in the past.

It's about national security.

It's about protecting our families and our country.

Like I said Tkozy, what is preventing other companies from building refineries??? Huh?? IF the economics are there, how come other companies are not doing it?? Why aren't the farmers in the midwest forming co-ops and building refineries??  It was done in the past.  Several refineries were built by co-ops of farmers to supply fuel for their needs.

SO tell me, what is keeping them from building refineries??

Also, you may want to bring up the article about how the government expansion into ethanol is driving oil companies away from building refineries, or expanding them, as they may not get their money back from the investment.  Are you suggesting that oil companies invest shareholder money in ventures that lose money?? Are you suggesting that the goverment force companies to invest in projects that would cause shareholders to loose money??

Mexico,

It must be obvious to all but you.

At this moment we have a 10% excess refinery capacity that can be turned on at the flip of a switch.

It's like having a Barbie doll in the back room, for every 9 on display.

Sure the front room is short one authorized Barbie. But would it make sense to spend billions of dollars to invest in a Barbie factory. Of course not. The moment I would be ready to put my billion dollar factory to work. You would pull that Barbie out of the back room. Monopolize the Barbie market with cut rate prices for a short term and force me out of business.

This is the same practice that has been going on with respect to renewable energy.

I am suggesting that if the practice of the petro industry is to monopolize petro.

If their business is to drive America's economy into bankruptcy.

Then the petro industry must be federalized.

From Minot North Dakota..

SO tell me this...

If there is 10% excess capacity

and the oil companies set the price of gasoline, not the market....

then tell me why they don't run their refineries balls to the wall at 100%??

Yup.. I saw a gas station selling gas for 3.55 a gallon.. Doesn't mean that is what everyone else is willing to pay.

It is amazing that these oil companies will charge 3.55 in one location, and 2.89 five miles away.  WHy not just make it 3.55 across the board??

Mexico,

The prices you listed were for West Fargo 60 hours ago. My price that I listed were for this morning..

The station that was $3.09, 60 hours ago in Minot, is now $3.25 in Minot. That would make your West Fargo price over  apx.$3.05/gallon today.

I am still trying to figure out How a resident in Minot could save money driving 300 miles to fill up in Fargo.

I never said the petro companies set the price at the futures market. I said they allow the price to be set at the futures market. They manipulate the futures market by attempting to keep levels of petro products down.

The current strategy was to keep product levels down in anticipation of the disastrous hurricane season

that was predicted. That bad prediction is going to spell the petro industry's doom.

Lacking a major hurricane disaster. There will be competition. Prices for crude will drop. Opec nations will have to make up for losses in the price drop, by increasing production.

Crude in the 40 dollar range this winter is not unlikely.

Demand will drop significantly this winter for gasoline.  Refinery production will have to increase in order to keep up cash flow. The price of gasoline will collapse like the walls of a non union coal mine..

Indeed, at a Senate hearing last year, BP’s chief executive officer explained that “[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery.” And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.

North Dakota gasoline prices 60 hours ago..

http://www.northdakotagaspr...

$3.04  Rebel 1, North Broadway, Minot, 10:44 am today.

Prices for crude will drop. Opec nations will have to make up for losses in the price drop, by increasing production.

Huh?? When was the last time Opec increased production when the price of crude fell??? Name me one time in the history of Opec that they raised production because of a decrease in demand??

Demand will drop significantly this winter for gasoline.

Why?? Are people going to quit driving cars??

Crude in the 40 dollar range this winter is not unlikely.

Wow... The raw material cost to refineries will be cut in half, greatly increasing the profit margin...

The current strategy was to keep product levels down in anticipation of the disastrous hurricane season

that was predicted. That bad prediction is going to spell the petro industry's doom.

Why again would you keep inventorys down in anticipation of a hurricane??

Lacking a major hurricane disaster. There will be competition. Prices for crude will drop.

So there is only competition when there have been no hurricanes?  We haven't had a good hurricane season in 2 years, so that must mean there has been competition...

Let me know when you are done chasing your tail

Mexico,

Every price listed after that 10:44 price at the Rebel station was higher. 10:44 Central time is 8:44 Bakersfield time. I copied the email. I posted it for you to see. Do with it what you like. Every piece of evidence points to a price of over $3.14/gallon and rising. (minimum) The email from my cousin shows a price of $3.25. I have no reason to doubt her.

It has been common practice for OPEC to be forced to maintain levels of cash flow. to do this they must price or volume.  It is well know by anyone with oil experience. Official levels released to the public are often understated. 

In plain words. they cheat when the money dries up.

Why would refineries they keep production down?  Why let me see.  To maintain higher futures market prices might be a reason.  What do you think Mexico? These are not American companies.  They are Multi national corporations that believe in corporatism not democracy. 

And yes there has been a decrease in petro prices because of a lack of a good hurricane the last 2 years.  Glad you at least recognize that.

The competition is not from outside sources. It is greed within the oil industry.  No hurricane disasters along with the normal reduction in gasoline during the winter months.  Sends the greedy petro CEO hunting for  cash flow.  They have to make that money to pay for their stock options of course.

And let's get something straight I never said 40 dollar crude. I said in the 40 dollar range would not be unlikely.  40 dollar range would be 40 to 49.99...

Mexico, with all your petro industry apologizing. If I am chasing a tail. It is you.. :>)

Indeed, at a Senate hearing last year, BP’s chief executive officer explained that “[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery.” And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.

It has been common practice for OPEC to be forced to maintain levels of cash flow. to do this they must price or volume. 

So then why don't they just cut the production and raise the price?? Kill two birds with one stone.  Don't have to pump as much, and they get more cash flow...

Pretty simple.. As you have already stated, oil companies control the volume and the price of oil... They will tell you what you will pay for oil....

Glad you recognize that profit margins are not enough to sustain any investment in new refinery capacity...

$2.49 at the Arco on 24th and F... Saaaaaweeeeeeeet.....And the trend is downward....This must be then end of big oil..  Refineries will have to produce more and more because  the price is falling.. I predict by the end of September, oil companies will be giving gasoline away because they have run their refineies at 250% capacity because demand was falling and the price was dropping.. By Christmas, when they oil companies are running their refineries at 500% of capacity, they will be PAYING us all to take gasoline...

That will be the best Christmas ever.  Now I can afford some of those chome 20 inch rims with the money big oil is going to give me....Hooraaayyyy

And let's get something straight I never said 40 dollar crude. I said in the 40 dollar range would not be unlikely.  40 dollar range would be 40 to 49.99...

You may want to confer with Hugo Chavez...he thinks oil is going to $100 bbl....

Mexico,

We have been above 5 year crude averages for over a year. Outside of the SPR. There is very little excess crude storage area in America. Futures traders are going to start running away from crude in short order. Once storage areas become strained. The SPR will not be able to inject enough crude to keep crude prices up.

Distillate supplies have been rising even in the face of refinery production cut backs. At current rates. Distillate storage areas will be strained. This will divert refinery capacity to gasoline at a time when gasoline usage is reaching a slow period. Nobody will have a prayer in the world trying to explain refinery worker layoffs or refinery rates below 90%

The 50 cent premium on diesel is not going to hold much longer. Distillates storage areas will soon be at max and refineries will again have to turn to producing gasoline during this fall.

With crude prices dropping. The cost of Diesel and gasoline will drop also. But this will not have any effect on the increase in gasoline supplies. Kids are back in school, parents and other adults have had their period of vacation. They are ready to stay home.

Gasoline storage will begin to spike soon after Labor Day.

OPEC nations have fixed bills they have to pay. They will have to increase volume to make up for a decrease in price.

Happens all the time.

Crude production in America is just hitting it's stride. New Wells have just started to make money. Marathon oil just started this year, it's 300 to 500 well expansion in North Dakota.

Although not all wells will be completed. New production wells will not be shut in. To many investers to please. Too much money invested in the new wells.

40 dollar range crude is a distinct possibility. There are some experts that see even lower if the economy slows.

Hmmm... So you are saying big oil does not have control of the price of crude?? You are saying the market sets the price for crude?? You  seem to change your mind quite a bit..

PS..  The break even level for OPEC oil is around $6 per barrel... ie...there is no need to "increase" volume to pay fixed expenses..

Mexico,

I am not talking about a break even point. I am talking about a level of cash flow that will pay the expenses of Nations. Chavez and his fellow OPEC Kings have a lifestyle to support. And they can't do that with citizens rioting in the street.

As far as a 6 dollar delivered break even point for all types of crude. I'd love to see you prove it. That is the information the likes of me have been trying to validate for a decade.

You want to depose Chavez. Start selling crude at 6 dollars a barrel. The boy would be done overnight.

Petro CEO's do manipulate and monopolize the price of petro products. They just do so badly. They are too greedy to know when to stop. The the law of averages plays against them and they get stuck with a bear crude and petro market.

They have yet to learn how to control their greed and create a stable market for their products.

You can't make up your mind.  In one post you say CEO control the price, then in the next you say the market controls the price.  Pick one and be consistent...

In 2001, the cost per barrel of Saudi crude was around $1/bbl..

http://www.allbusiness.com/...

I can't imagine that going up 6 fold in the last 6 years...

Oil will be sold at the highest price the buyer is willing to pay....Simple economics..

Mexico,

I have not varied my position one iota. The price of oil will not fall this winter due to market pressures. It is going to fall because it has been elevated through monopoly control to a unjustified level.

The price will crash. Unless there is major destruction from a hurricane.

The futures market is in 'fear' mode. Raise fear in the public and bid up the price of crude. When the fear level can no longer be supported. Neither will the price.

Supply and demand is not a factor.  Just look at the current EIA graphs I posted.  Supplies of crude are so high today. They should already be in the 40 dollar range

You didn't report OPEC costs. You reported
WELLHEAD costs of one Saudi Arabian field. The last page goes on to state average discovery costs are 4 dollars/b.

I need proof that $6/barrel delivered to the futures market buyer is the break even cost for OPEC oil.

I can not see that proof in your article. But thanks I'll keep looking myself.

WHy would a hurricane affect the price??  You said supply and demand is not a factor..You said supplies of crude are at a 5 year high...  While previously you said the strategy was to keep product supplies down in anticipation of the hurricane season...So which is it?? Have they been keeping supplies down, or are supplies at a 5 year high??

This is comical...