Alaska oil field shut down

[gtalum]

Prices have already begun to rise.

Prices have been on the rise for three years now.

[sunny]

Prices have already begun to rise.

Prices have been on the rise for three years now.

I am aware of that - did you bother to read the article?

[gtalum]

I am aware of that - did you bother to read the article?

Sure I did. The openign paragraph is as follows:

Oil surged above $77 a barrel in Europe as BP began shutting an Alaskan field that pumps 8 percent of U.S. crude and anxiety over the Middle East, supplier of almost a third of the world's oil, ran high.

Nowhere does it list the oil field closure as a cause. Only that it happened concurrently with today's price increase.

Should supplies get tight in the US, the SPR can be tapped for a very long time to make up for the 400k barrels per day that the field produces. This closure won't significantly affect prices.

[sunny]

Nowhere does it list the oil field closure as a cause.

Title of article:

Oil above $77 on Alaska shutdown, Mideast

[Lindaloo]

Come on gtalum. LOL!! You didn't read the article did ya?

If the Reserves can be tapped for a long time, then why the heck are prices over 3 dollars a gallon for the low grade gas.

Hopefully you will not have to eat your last words.

What is your area of expertise? I sure would like to believe everything you are saying here.

[george_r_1961]

I am aware of that - did you bother to read the article?

Sure I did. The openign paragraph is as follows:

Oil surged above $77 a barrel in Europe as BP began shutting an Alaskan field that pumps 8 percent of U.S. crude and anxiety over the Middle East, supplier of almost a third of the world's oil, ran high.

Nowhere does it list the oil field closure as a cause. Only that it happened concurrently with today's price increase.

Should supplies get tight in the US, the SPR can be tapped for a very long time to make up for the 400k barrels per day that the field produces. This closure won't significantly affect prices.

Not sure if tapping the SPR is a good idea since BP has not given a time frame as to how long the repairs will take. Then instead of high priced gas we will have no gas. I think that BP should be prodded to complete repairs ASAP

[gtalum]

Come on gtalum. LOL!! You didn't read the article did ya?

Sure I did, it wasn't that long. Nowhere did it list the closure of the BP field as a cause. The article claims only that the announcement and today's price increase occurred concurrently.

If the Reserves can be tapped for a long time, then why the heck are prices over 3 dollars a gallon for the low grade gas.

Resevres could be tapped for a long time to replace the 400k barrles per day of lost production. They cannot be tapped for long to keep our oil supply lines at the level they ened to be to keep prices back below $2, for instance. There are over 700 million barrels in the SPR. We cna replace the 400k lost production for more than two years with the reserves. Is it a good idea? probably not. But if supplies get tight it can be done.

What is your area of expertise? I sure would like to believe everything you are saying here.

I work in a business directly tied to petroleum. I watch oil prices like a hawk.

[Stephanie]

It may be preventative for an oil spill, but not a preventative for Americans pocketbooks. How convenient.

If it is corroded already, that means someone, somewhere wasn't paying attention to it before hand or had a backup plan.

I'm glad that they did catch it BEFORE an oil spill but I really don't think it is fair to see oil and gas on the rise AGAIN when it's already around $3.00 per gallon or more for regular and the oil companies are STILL RECORDING record profits. Has the problems on the other side of the world and the hurricanes really damaged the supply chain? I have to wonder. We're not talking a momentary blip on the radar screen, this has been going on for the past year - one problem after another and they are still recording record profits. Doesn't add up to me.

[Stratosphere747]

The profits of the oil companies have risen relative to the increase of ppb. The actual profit margin has not.

I'd be more concerned about the profit margin of other companies that dwarf what the oil sector generates, which includes banking and pharmaceuticals.

[Lindaloo]

It may be preventative for an oil spill, but not a preventative for Americans pocketbooks. How convenient.

If it is corroded already, that means someone, somewhere wasn't paying attention to it before hand or had a backup plan.

I'm glad that they did catch it BEFORE an oil spill but I really don't think it is fair to see oil and gas on the rise AGAIN when it's already around $3.00 per gallon or more for regular and the oil companies are STILL RECORDING record profits. Has the problems on the other side of the world and the hurricanes really damaged the supply chain? I have to wonder. We're not talking a momentary blip on the radar screen, this has been going on for the past year - one problem after another and they are still recording record profits. Doesn't add up to me.

Thank you Steph! Could not have said it any better.

[Aquawind]

If it is corroded already, that means someone, somewhere wasn't paying attention to it before hand or had a backup plan.

THAT was the dang near the first thing that came to mind when I heard this.. Reminds me of the insurance industry. Seems like when they have big insurance payouts they make bigger profits. Higher oil prices and higher profits. Oil and insurance are putting me in the poor house.

[gtalum]

Seems like when they have big insurance payouts they make bigger profits. Higher oil prices and higher profits.

Of course. If you own a business, when your costs go up you rais eprices to maintain your profit margin. Net profit will increase as you maintain the same profit margin on higher prices. You can't expect people to invest in a business if the profit margin falls.

[Lindaloo]

Wanna be in the transportation business gtalum? I can't believe you are backing the greedy oil industry.

[gtalum]

Wanna be in the transportation business gtalum?

Not really.

I can't believe you are backing the greedy oil industry.

The "greedy" oil companies have a profit margin of less than 10%. Not too greedy, when you think about it.

I back capitalism as a whole. If I don't like the price of a product, I buy less of it.

[Aquawind]

Well at least the oil companies do drop the prices on occassion versus the insurance people never doing such. Oil mismanagement and the industry as a whole makes a higher profit because of it.

[rainstorm]

i dont think many people understand how gas prices work. its based on futures markets. right now people are betting that 6 months from now oil prices will be higher than what they are now. and what happens? oil companies and oil producers stockpile oil, waiting to sell it at a higher price later. until futures markets are eliminated, this will continue to happen. this is why prices will continue to rise, even though based on fundamentals, the price should be much lower.

we deserve the high prices afterall. we still wont even try to increase our own domestic supply, meanwhile castro drills off florida

[gtalum]

That's very true. A lot of the dissatisfaction voiced over oil prices is a result of not undertsanding the futures market.

[rainstorm]

very true glatum. and before people blame oil companies, pricing for commodities is totally different than prices for other goods. also, anyone who owns a business would want to seel theor product at the highest price possible as well. futures markets for commodities was a terrible idea

[rainstorm]

its also very easy for a country like iran to raise prices. just rattle the sabre, and nervous futures traders bid the price up, up up. and the next time you see a talking "head" on tv wailing that the price per barrel may rise to 100 bucks, as yourself if they are saying that because they own futures contracts and are trying to talk the price up to make money

[Stephanie]

i dont think many people understand how gas prices work. its based on futures markets. right now people are betting that 6 months from now oil prices will be higher than what they are now. and what happens? oil companies and oil producers stockpile oil, waiting to sell it at a higher price later. until futures markets are eliminated, this will continue to happen. this is why prices will continue to rise, even though based on fundamentals, the price should be much lower.

we deserve the high prices afterall. we still wont even try to increase our own domestic supply, meanwhile castro drills off florida

I know that once the market "shakes" the world listens. To me, that's total BS. It should be based on cost at the time it is available for sale - matching costs and revenues. It's more of an excuse. Other businesses drive their prices higher due to the cost of their production, NOT based on what the "futures" say. When you think about it, the market players are shooting themselves in their own foot. Yeah, they're making a buck because bet on horse #1 in the fifth month but that buck is coming out of their pockets in months one through four to pay for that bet.

I can't believe it Helen but it seems like I AGREED with you!!!!