Sen. Schumer: Oil refiners producing less to push prices higher

[bigtree]

Schumer seeks probe of refining capacity utilization

Nick Snow
Washington Correspondent

WASHINGTON, DC, Apr. 19 -- Citing rising gasoline prices, US Sen. Charles E. Schumer (D-NY) suggested that some refiners may be keeping plants off-line as they switch to summer fuel blends to push prices even higher.

The senator also cited crude oil costs in an Apr. 18 letter to Federal Trade Commission Chairwoman Deborah P. Majoras asking for an investigation. But he said refining capacity utilization, which oil companies can control, has recently been below the 90% range that it has been for this period in the last 5 years.

"Given the past behavior of the oil companies who take advantage of natural or cyclical occurrences and raise prices even more than necessary, this requires scrutiny," Schumer said as he released the letter.

He told Majoras that "only 85%" of the total US refining capacity was used in the week ended Apr. 7, and finished motor gasoline production fell to 7.8 million b/d. Refinery utilization averaged 86.7% of total capacity during March, the American Petroleum Institute said in its latest monthly statistical report.

Fuller utilization can assure that consumers pay lower prices, Schumer said, noting that fuel prices averaged $1.065/gal when US refining capacity utilization averaged 98.1% between April and September 1998.

http://ogj.pennnet.com/articles/article_display.cfm?Section=ONART&C=GenIn&ARTICLE_ID=252991&p=7

[madmom]

1. I read somewhere yesterday that the OPEC ministers said there

is plenty of oil and the high prices are because of bushes saber rattling.

[bigtree]

2. good catch

today they say demand is easing:

OPEC forecasts weakening demand

http://www.suburbanchicagonews.com/newssun/business/5_3_WA19_OILPRICES_S1.htm

WASHINGTON — Oil prices settled at a new high above $71 a barrel Tuesday as supply threats around the world overshadowed a new report from OPEC forecasting weakening global demand.

There was no fresh catalyst for Tuesday's buying, but analysts said the market psychology would likely remain bullish until there is some resolution to a variety of geopolitical uncertainties, particularly the West's nuclear dispute with Iran and output disruptions in Nigeria.

Global Insight oil analyst Kevin Lindemer said the slowing consumption growth and swelling inventories of crude oil in the United States would typically help pull down prices, but "all of that is getting swamped right now by Iran and Nigeria."



yesterday:


OPEC delegate says oil price rise "not justified by market fundamentals"

DUBAI (Reuters) - OPEC believes oil prices are too steep, after setting a fresh record high above $70 a barrel, and the rise is not justified by market fundamentals, a senior OPEC delegate said on Tuesday.

The delegate said there was no shortage of crude oil supply and that OPEC giant Saudi Arabia and other producers had pledged in the past to keep markets well supplied.

"OPEC believes strongly that prices are too high and nobody wants to see these prices," the delegate told Reuters. "(But) it has nothing to do with fundamentals."

"Geopolitics are riding the price," the OPEC delegate said, stressing that there was no shortage of crude in the market.

Saudi Arabia has the lion's share of OPEC's spare capacity. Riyadh has repeatedly said there is not enough demand from refiners for the medium and heavy crudes that constitute the bulk of its unused output capacity.

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-18T091354Z_01_L18203482_RTRIDST_0_BUSINESSPRO-ENERGY-OPEC-DELEGATE-DC.XML



my 2 cents:

Sticking It To Us at the Gas Pump Because of the Iran 'Crisis'

http://www.opednews.com/articles/opedne_ron_full_060414_sticking_it_to_us_at.htm

[Ecumenist]

4. This situation works for bush and his fellow oil whores

They get to look butch AND continue to line their pockets in an obscene fashion, even though it destroys this country and it'ss people, while placing at risk the entire planet.

[NickB79]

3. How much heavy sour crude are they being asked to refine?

As I recall, the Saudis are now pumping more of the heavy, sulfer-rich crude that refineries have troubles with, as their supply of light sweet crude falls. I could see how this change could slow the refining process down, as they have to deal with the problems associated with it.

[bigtree]

5. didja see the article in the post above?

Saudis claim they haven't had a need to crack those reserves

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-18T091354Z_01_L18203482_RTRIDST_0_BUSINESSPRO-ENERGY-OPEC-DELEGATE-DC.XML

[Ganja Ninja]

6. Perhaps it's time to nationalize the oil companies.

They are too corrupt and have too much power.

[Hippo_Tron]

8. I think that we should just bust them for anti-trust violations TR style

I'm in favor of nationalizing health insurance because peoples' lives literally depend on it. However, once we talk about other industries I get weary. So instead, why don't we actually force the oil companies to compete with each other like they should in a free market.

[Hippo_Tron]

7. I heard an economist say this about 3 years ago

OPEC makes sure to keep the price of oil within a certain margin so they either take more off the market or put more on the market to make sure that it happens.