Is It Them or Is it Us???? Oil Games............

[DemocracyInaction]

The spokesman for the Saudis said two days ago that they could pump as much oil as the US wanted but the problem is that the US does not have the refining capacity, and therefore, it makes no difference what they pump.

If I were an American oil barron, I would prefer to have one rickety (low capital overhead outlay)refinery pumping out X number of barrels a day, creating a shortage and charging a zillion dollars a barrel rather than investing in numerous refineries producing 100 times X and thus reducing the price per barrel output. Greed trumps need.

[Nickster]

1. That's what I've been trying to figure out myself.

It seems like both sides benefit from the situation so who wants to touch it really?

[bigtree]

2. And production is up, apparently having no measurable effect on the price

LONDON, March 8 /PRNewswire/ -- Oil cartel OPEC took advantage of
continuing high oil prices in February to boost crude production, ignoring a December pledge to remove overproduction beyond the official 27 million barrel per day (mil b/d) output ceiling, a Platts survey of OPEC and oil industry officials showed March 8.

Total OPEC output averaged 29.58-mil b/d in February, an increase of
290,000 b/d from January's 29.29-mil b/d. Excluding Iraq, whose output was unchanged from January at 1.85-mil b/d, the ten members with quotas pumped an average 27.73-mil b/d in February, up 290,000 b/d from January's 27.44-mil b/d.

"Higher prices inevitably lead to higher production, no matter what the official line on restraint might be," said John Kingston, global director of oil at Platts. "It is considered all but an impossibility that OPEC will cut production at its meeting next week in Iran, and it may be that market conditions by themselves are taking care of the consuming nations' need for more supply. That's what these numbers seem to show."

The biggest single increase came from Saudi Arabia, which raised
production by 150,000 b/d to 9.25-mil b/d despite having previously announced that it was producing around 9-mil b/d in line with its December pledge.

Other smaller increases totaling 160,000 b/d came from Iran, Kuwait,
Nigeria and the UAE. Only one country reduced output, Venezuelan production slipping to 2.68-mil b/d in February from 2.7-mil b/d in January.
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/03-08-2005/0003157388&EDATE=

After a 25% drop in oil prices over previous weeks, the producers agreed to try to reign in the oil market oversupply, but no one, save Venezuela has reduced output. And still the price is rising. What other explanation is there except some sort of price gouging by the oil giants?

[drthais]

3. about refineries

not that I know about refineries
but I do remember reading a few months ago
that building new refineries
will not be central to the future of energy because
(a) it takes a long time to get ne up and running and
(b) they cost a sh**load of money to build and
(c) oil will not be around long enough for this approach to be cost-effective

so thats what I remember
and that is part of why we're not running around building refineries
even though the Saudis said that

I also remember reading that the Saudi oil fields are in a state of decline
and that the quality of oil they are now producing
is much more difficult to extract and then to refine