X-Virus-Scanned: clean according to Sophos on Logan.com Return-Path: Received: from ispmxmta05-srv.windstream.net ([166.102.165.166] verified) by logan.com (CommuniGate Pro SMTP 5.2.3) with ESMTP id 2924094 for flyrotary@lancaironline.net; Thu, 15 May 2008 20:32:58 -0400 Received-SPF: pass receiver=logan.com; client-ip=166.102.165.166; envelope-from=montyr2157@alltel.net Received: from ispmxaamta08-gx.windstream.net ([98.20.147.33]) by ispmxmta05-srv.windstream.net with ESMTP id <20080516003218.QJXM9682.ispmxmta05-srv.windstream.net@ispmxaamta08-gx.windstream.net> for ; Thu, 15 May 2008 19:32:18 -0500 Received: from Thorstwin ([98.20.147.33]) by ispmxaamta08-gx.windstream.net with SMTP id <20080516003217.GNGJ12888.ispmxaamta08-gx.windstream.net@Thorstwin> for ; Thu, 15 May 2008 19:32:17 -0500 Message-ID: <000c01c8b6ec$51659cd0$6501a8c0@Thorstwin> From: "M Roberts" To: "Rotary motors in aircraft" Subject: Oil Thoughts Date: Thu, 15 May 2008 19:32:27 -0500 MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_0009_01C8B6C2.68626A50" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2900.3138 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.3198 This is a multi-part message in MIME format. ------=_NextPart_000_0009_01C8B6C2.68626A50 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Tracy and Timothy, I agree.=20 Somebody somewhere decided to make things more expensive in a gradual = manner. Although there are several factors for the recent run-up (which = I don't think was planned especially before the election): 1.) Dollar depreciation (thanks allot Greenspasm!) 2.)China-crappy electric grid. Lots of factories for Wal-Mart junk use = diesel gen sets.=20 =20 The Chinese gov. tried to do something incredibly stupid. a.) Cash in depreciating dollars for oil (not so stupid) b.) Fix the price of diesel (pretty dumb) Result is many of the small refiners in China stopped making diesel = because the input went up and the profit went away DUH! So then they started to buy up diesel on the open market. We actually = export a lot of diesel because our older refineries only make high = sulfur distillates. Which the EPA outlawed. Nobody else makes this low = sulfur diesel. So we don't have enough refining capacity to make it, and = we can't import it. The refiners are not making much money as Timothy mentioned. The Crack = Spread is at historic lows. Last summer the oil companies were making = about $40 per barrel of oil. Now they are making about $4 or less. = Remember how cooperative the oil companies were before the last election = when crack spreads went to nothing! Then they got their reward during = the $40/barrel moment......but then CHINA!!!! Maybe they DO know what = they are doing......happy thoughts, happy thoughts.... Check Microsoft's operating margin VS. oil companies, or any other = company for that matter. They do not make excessive margins especially = considering the capital at risk. The scale is huge however, so the = numbers are mind blowing. Especially if the only balance sheet you ever = see is your credit card bill.. I expect the crack spread to resolve itself in two ways=20 1.) $5/gallon gas 2.) Oil price decline Unless we do something stupid in the middle east, and then all bets are = off. We have been filling the strategic petroleum reserve. It's full now. = Plus Goldman Sachs just said oil is going to $200/barrel. Got to get the = rubes worked up to buy out their contracts....... I also agree.....we can't handle the truth, most of us. Maybe they just assume those who can will find the truth and make money = from it. Still I think calling Politicians smart is giving them way too much = credit. The smart ones aren't the grandstanding brain dead variety you = see on TV. The Scary thing is....politicians ARE playing to the masses. Giving them = what they want to hear. Happy thoughts, Happy thoughts...... Monty ------=_NextPart_000_0009_01C8B6C2.68626A50 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Tracy and Timothy,
 
I agree.
 
Somebody somewhere decided to make = things more=20 expensive in a gradual manner. Although there are several factors for = the recent=20 run-up (which I don't think was planned especially before the=20 election):
 
1.) Dollar depreciation (thanks allot=20 Greenspasm!)
 
2.)China-crappy electric grid. Lots of = factories=20 for Wal-Mart junk use diesel gen sets.
    
    The Chinese gov. = tried to do=20 something incredibly stupid.
        = a.) Cash in=20 depreciating dollars for oil (not so stupid)
        = b.) Fix the=20 price of diesel (pretty dumb)
 
Result is many of the small refiners in = China=20 stopped making diesel because the input went up and the profit went away = DUH!
 
So then they started to buy up diesel = on the open=20 market. We actually export a lot of diesel because our older refineries = only=20 make high sulfur distillates. Which the EPA outlawed. Nobody else makes = this low=20 sulfur diesel. So we don't have enough refining capacity to make it, and = we=20 can't import it.
 
The refiners are not making much money = as Timothy=20 mentioned. The Crack Spread is at historic lows. Last summer the oil = companies=20 were making about $40 per barrel of oil. Now they are making about $4 or = less.=20 Remember how cooperative the oil companies were before the last = election=20 when crack spreads went to nothing! Then they got their reward = during the=20 $40/barrel moment......but then CHINA!!!!  Maybe they DO know = what=20 they are doing......happy thoughts, happy thoughts....
 
Check Microsoft's operating margin VS. = oil=20 companies, or any other company for that matter. They do not = make excessive=20 margins especially considering the capital at risk. The scale is huge = however,=20 so the numbers are mind blowing. Especially if the only balance sheet = you ever=20 see is your credit card bill..
 
I expect the crack spread to = resolve=20 itself in two ways
 
1.) $5/gallon gas
2.) Oil price decline
 
Unless we do something stupid in the = middle east,=20 and then all bets are off.
 
We have been filling the strategic = petroleum=20 reserve. It's full now. Plus Goldman Sachs just said oil is going to=20 $200/barrel. Got to get the rubes worked up to buy out their=20 contracts.......
 
I also agree.....we can't handle the = truth, most of=20 us.
 
Maybe they just assume those who can = will=20 find the truth and make money from it.
 
Still I think calling Politicians = smart is=20 giving them way too much credit. The smart ones aren't the grandstanding = brain=20 dead variety you see on TV.
 
The Scary thing is....politicians ARE = playing to=20 the masses. Giving them what they want to hear.
 
Happy thoughts, Happy = thoughts......
 
Monty
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