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And, yes, I DO take it personally
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And, yes, I DO take it personally

Monday, September 22, 2008

"Every market is just out of control right now." So, how's that bailout workin' for ya, eh...?

if this obscene bailout goes through, our government is going to have a revolt on its hands... i don't see how it can be avoided... anybody who's paying the slightest bit of attention can't fail to miss that this is robbery, pure and simple... i think the fall in stocks, the rise in oil prices and the fall of the dollar is testament to the fact that there's a hell of a lot of people out there who not only think the bailout is a bad idea and may not pass but also that things stand to get considerably worse...
Stocks fell sharply and oil prices suddenly spiked on Monday as investors anxiously waited for Washington lawmakers to hash out the details of the biggest government bailout in history — a politically fraught process that will create a new slate of winners and losers on Wall Street.

That uncertainty, about a shaken financial system still in flux, appeared to spook investors away from assets tied directly to the health of the American government. The dollar dropped sharply against the euro, and oil prices jumped, closing up more than $16 a barrel.

The Dow Jones industrials closed down 372 points after spending the day deep in negative territory. The broader Standard & Poor’s 500-stock index finished down 3.8 percent.

“What can I say? Every market is just out of control right now,” said Tom Bentz, an energy analyst at BNP Paribas.

ferchrissake, let's let the house of cards fall down already...

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Wednesday, August 20, 2008

Exxon John

pretty much sums it up, dontcha think...?

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Friday, June 27, 2008

Let's get on with the economic melt-down and the financial collapse

a follow-on from the previous post about the dow jones free-fall...
So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain't gonna happen. Not this summer. Not this fall. Not even next winter.

This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Only this will be a different kind of recession -- a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 -- whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.

and then there's that $142 a barrel oil...
Oil leapt to a new record high above $142 a barrel on Friday, extending gains after surging nearly 4 percent in the previous session, as tumbling global stock markets helped to trigger a wider commodities rally.

U.S. light crude for August delivery was $1.70 up at $141.34 a barrel by 8:12 a.m. EDT, off a record high of $142.26.

London Brent crude was $1.39 up at $141.22, off a record high of $142.13.

World stocks fell to a three-month low as a fast deteriorating global inflation picture intensified concerns over the outlook for corporate profits, hastening the rush of investors' funds into commodities.

i don't wish anyone any pain, but, c'mon... the house of cards is tumbling down and i'm sick and tired of watching those who continue to profit the most scrambling to preserve their super-rich, elite status at the expense of the peasantry...

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Monday, June 23, 2008

So much for the naive belief that increasing Saudi oil output will help reduce gas prices

many years ago, a san francisco city alderman running for re-election offered this visually arresting quote: "it's time to grab the bull by the tail and look facts in the face"...

folks, the u.s. economy - nay, the GLOBAL economy - fell off the cliff some months ago... it may be a long, lo-o-o-ong way down, and it may be happening in slo-mo, but the fact is, we be headin' do-o-o-own, and no amount of carefully staged p.r. stunts like the saudis announcing that they're increasing oil output is going to make a single goddam bit of difference...

be sure to check the last sentence...

Oil prices fluctuated Monday as traders shrugged off a pledge by Saudi Arabia to increase its production and the dollar gained strength in Europe.

Saudi Arabia said Sunday it would produce more crude oil this year if the market needs it. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the meeting in Jeddah that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels.

The announcement had already been factored into oil prices, analysts said.

"The meeting was mildly positive but it wouldn't really deliver anything that would give a heavy correction in oil," said Mark Pervan, a senior commodity strategist at the ANZ Bank in Melbourne, Australia. "They pledged production increases that the market thought was base case."

the only possible thing that could change the disaster scenario that's playing out right now is some sort of deus ex machina intervention, but the magnitude of such an intervention and the unimaginable sums of money necessary to accomplish it, are now too great for even the super-rich elites to cough up... besides, why should they...? money is still overflowing their coffers like the mississippi out of its banks... (yeah, i know... that last one was a really bad and, trust me, completely unintentional pun...)

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Friday, May 30, 2008

The 5-year increase in speculative demand for oil is almost equal to the increase in Chinese demand for oil

i posted the other day on the possibility that speculators are purposely driving up oil prices...

here's mike whitney at ich...

“Speculative activity in commodity markets has grown 'enormously' over the past several years," the Homeland Security and Governmental Affairs Committee said in a news release. It pointed out that in five years, from 2003 to 2008, investment in the index funds tied to commodities has grown by 20-fold -- to $260 billion from $13 billion.”

And here's a revealing clip from the testimony of Michael W. Masters of Masters Capital Management, LLC, who addressed the issue of “Commodities Speculation” before the Committee on Homeland Security and Governmental Affairs this week:

“Today, Index Speculators are pouring billions of dollars into the commodities futures markets, speculating that commodity prices will increase. ... In the popular press the explanation given most often for rising oil prices is the increased demand for oil from China. According to the DOE, annual Chinese demand for petroleum has increased over the last five years from 1.88 billion barrels to 2.8 billion barrels, an increase of 920 million barrels.8 Over the same five-year period, Index Speculatorsʼ demand for petroleum futures has increased by 848 million barrels. THE INCREASE IN DEMAND FROM INDEX SPECULATORS IS ALMOST EQUAL TO THE INCREASE IN DEMAND FROM CHINA.

Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.

Today, in many commodities futures markets, they are the single largest force.15 The huge growth in their demand has gone virtually undetected by classically-trained economists who almost never analyze demand in futures markets.

As money pours into the markets, two things happen concurrently: the markets expand and prices rise. One particularly troubling aspect of Index Speculator demand is that it actually increases the more prices increase. This explains the accelerating rate at which commodity futures prices (and actual commodity prices) are increasing. The CFTC has taken deliberate steps to allow CERTAIN SPECULATORS VIRTUALLY UNLIMITED ACCESS TO THE COMMODITIES FUTURES MARKETS. The CFTC has granted Wall Street banks an exemption from speculative position limits when these banks hedge over-the-counter swaps transactions. This has effectively opened a loophole for unlimited speculation. When Index Speculators enter into commodity index swaps, which 85-90% of them do, they face no speculative position limits. ... The result is a gross distortion in data that effectively hides the full impact of Index Speculation.” (Thanks to Mish's Global Economic Trend Analysis; the one “indispensable” financial blog on the Internet)

ya know, i'm in no position to make any judgments on whether this is actually happening or not, but, i gotta say, do i believe it's POSSIBLE...? damn right...!

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Are the super-rich driving up oil prices to make themselves even richer...? Na-a-a-aaah... Perish the thought...

i've been increasingly suspicious that the dramatic rise in oil prices is just another orchestrated money grab by the super-rich, power elites... looks like i may not be the only person who harbors those dark thoughts...

mcclatchy...

A key federal regulator said Thursday that it's been probing whether speculators are manipulating the price of oil and gasoline and announced a series of measures to make the opaque world of oil trading more transparent.

In a surprise announcement, the Commodity Futures Trading Commission (CFTC) confirmed that since last December it's been investigating the trading of contracts for future deliveries of oil, commonly called futures contracts.

"Although the commission ordinarily conducts enforcement investigations on a confidential basis, the commission is taking the extraordinary step of disclosing this investigation because of today's unprecedented market conditions," the statement said. "The specifics of the ongoing investigation remain confidential. All commission enforcement inquiries are focused on ensuring that the markets are properly policed for manipulation and abusive practices."

la times...
"It shouldn't have taken oil and gasoline prices hitting Guinness-like record highs for the federal government to look into possible price manipulation by speculators, but it should also be looking at manipulation by oil companies and oil producers," said Sen. Charles E. Schumer (D-N.Y.), chairman of Congress' Joint Economic Committee.

[...]

A commission official, who spoke on condition of anonymity because he is not authorized to discuss ongoing investigations publicly, said the commission's economists were fairly sure that there had been no criminal manipulation of the market.

that last paragraph as much as says that the investigation is principally for show, that there is no intention to get to the bottom of the matter... (like we thought for a moment that there would be...)

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Friday, May 09, 2008

$200USD a barrel oil in six months

c'mon, house of cards... fall down... c'mon... c'mon...
The price of crude oil could soar to 200 US dollars a barrel in as little as six months, as supply continues to struggle to meet demand, warned a report from Goldman Sachs energy strategist Argun Murti as benchmark US light crude passed the 123 dollars mark for the first time

Surging demand was increasingly likely to create a "super-spike" past 200 in six months-to-two years' time, he said. Oil prices have now risen by 25% in the last four months and 400% since 2001.

Mr Murti correctly predicted three years ago, when oil was about 55 US dollars a barrel that it would pass 100 dollars which it reached for the first time in January of this year.

i don't wish anyone any unnecessary pain, but, fercryinoutloud, let's stop the slo-mo collapse... it's going to happen... it NEEDS to happen... let's get it the hell over with...

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Monday, May 05, 2008

Just when I think there's nothing worth posting, I read about $120 a barrel oil

holy shit...
Oil futures have surpassed the once unthinkable price of $120 a barrel.

Oil reached its latest milestone on a mix of threats to overseas crude oil supplies. A threat by Kurdish rebels in Iraq to attack American interests has investors concerned. And an attack on an oil facility in Nigeria cut oil supplies.

Meanwhile, defiant comments by Iranian leaders about the country's nuclear program raised worries about broader conflict in the Middle East.

Light, sweet crude for May delivery rose to a trading record of $120.21 a barrel on the New York Mercantile Exchange.

The falling dollar is also sending crude prices higher.

let me repeat that... holy shit...!

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Monday, April 21, 2008

"Grain prices are rising to their equivalent level in oil" - more from Al Jazeera English on the food crisis

i just finished watching this al jazeera special, ... without a doubt, it's the clearest, most honest look i've yet seen at what's happening with grain, ethanol and the rapidly worsening global food crisis... i highly recommend watching both parts start to finish...

People & Power - Food Shortages -20 Apr 08 - Part 1



People & Power - Food Shortages -20 Apr 08 - Part 2

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Friday, April 18, 2008

Euro hits $1.59, Merril Lynch continues its free fall, oil climbs past $115 a barrel, and rice is now 3x higher than 2007

please note... ALL of these stories are interconnected in very fundamental ways, all of which point to the continuing collapse of the global financial markets... hitting bottom, imho, is a long way off...

is it even possible to comprehend $30B worth of losses in one company in only three quarters...?

Merrill Lynch announces job cuts after $2 billion loss

Merrill Lynch, the investment bank, posted a loss Thursday and announced that it would lay off about 2,900 additional workers. Including about 1,000 jobs already eliminated this year, the company's work force is to shrink by 10 percent, or about 4,000 jobs, over the course of 2008.

The bank reported worst-than-expected earnings for the first quarter, including $6.5 billion in write-downs and adjustments to assets in its mortgage, leveraged finance and other divisions. The write-downs bring the total taken by Merrill Lynch in the last three quarters to more than $30 billion.

i'm working with a gentleman here who lives in france but is an employee of the u.s. company that runs the project... he is paid in dollars which he converts to euros... he has lost nearly HALF the value of his salary over the past year...


The euro retreated from a record high against the dollar in choppy trade Thursday after a top euro zone official called recent euro appreciation "undesirable."

[...]

That sparked concern that G7 officials may be considering coordinated currency intervention to stem the dollar's decline.

it wasn't very long ago, only a matter of six months, that oil over $100 a barrel seemed unimaginable...


Oil prices hit all-time highs above $115 a barrel Thursday as the dollar continued to weaken and on reports that oil and gasoline stocks in the United States were lower than expected.

and look at rice, a food staple for more than 2/3 of the world's population...
The sense of crisis in the rice market showed no signs of easing as prices continued their record climb and a tender from the Philippines, the world's top importer, attracted offers to sell only about two-thirds of the half-a-million tons it had sought, Reuters reported from Bangkok.

In Bangkok, Thai 100 percent B-grade white rice, considered the world's benchmark, hit $950 per ton, three times its price at the start of 2007.

i don't know how anyone can look at the above four items and not sense impending doom...

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Tuesday, March 11, 2008

$109 a barrel oil and a weaker dollar

holy crap...
Oil prices soared past $109 a barrel after rising to a record in the previous session as the U.S. dollar weakened further.

Speculation that rising prices for oil and other commodities will offset the falling dollar has driven oil's rally from $87 a barrel in January.

The dollar has fallen to three-year lows against the yen and the head of the European Central Bank expressed concern Monday about the "disorderly movements" of exchange rates.

c'mon, house of cards... c'mon... c'mon... collapse already...

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Thursday, March 06, 2008

Oil, money and obscenity

OPEC Says Members Won't Pump More Oil
As Crude Price Sets Record, Cartel's Intent Is Questioned

Though OPEC's production decision was widely expected, Naimi's comments and the wording of the group's communique added to concern that OPEC is more worried about pumping too much oil for weakening economies than it is about the possible harm that high oil prices might do to those economies.

In its statement after the meeting in Vienna, OPEC pointed to "the economic slowdown in the U.S.A., which, together with the deepening credit crisis in financial markets, is increasing the downside risks for world economic growth and, consequently, demand for crude oil."

yeah, they're worried about declining revenue... gosh, i would be too if it meant i'd have to forego goodies like this...


Make and Model: Bugatti Veyron
Owner: Sheikh Mohammad's Son, Sheikh Rashid Bin Mohammed Al Maktoum
Cost: $GBP5M/$USD10M
Location, Dubai, UAE
Engine: V16 engine, 1000bhp, 10 radiators
Top speed: 407km/hr


taking obscenity to undreamed-of heights...

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Wednesday, February 27, 2008

Oil - record high... Dollar - record low...

the perfect storm...

both...

Oil prices strike record high 102.08 dollars

Crude oil prices surged to a record above 102 dollars per barrel on Wednesday, energised by the weak US dollar and concerns that OPEC could cut output next week, analysts said.

and...

Dollar plunges to fresh record euro low


The dollar plunged to another record low against the European single currency on Wednesday as a stream of negative US data undermined the greenback, analysts said.

In morning deals, the euro surged as high as 1.5088 dollars, after smashing through the 1.50 barrier for the first ever time in US trade on Tuesday.

so stop stalling... let's have the collapse already...

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Tuesday, January 15, 2008

Here it comes, the next big story - U.S. inflation

i was largely non compos mentis during the last period of serious inflation in the u.s. in the early and mid-70s... yeah, i knew it was going on and, yeah, i knew it was a problem, but i honestly either don't remember or perhaps didn't experience much of a personal impact... contrast that with my more recent experience in argentina, which has been trying to grapple with what government figures declare is a 9% inflation rate, but my first-hand, on-the-street experience of watching prices rise literally before my eyes tells me is at least 12% percent and maybe even as high as 19%... so, if WHOLESALE inflation in the u.s. for ALL of 2007 is 6.3 percent, you have to believe that, with the recent steep rises in food and basic commodity prices, the real personal impact is a minimum of several points higher...

i had an experience with u.s. inflation just this past sunday while i was perusing the menu prices at a down-scale, storefront, strip mall, family-run, mexican restaurant, usually the very best bet for value... the average entree is now 25% more than last year at this time, and a full 60% more than early 2003...

Wholesale inflation shot up in 2007 by the largest amount in 26 years even though falling gasoline costs allowed price pressures to moderate in December.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

The year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs at the time for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

Meanwhile, the Commerce Department reported that retail sales fell by 0.4 percent in December. It was a worse-than-expected decline and increased worries that the country could topple into a recession.

i've noticed the decrease in gasoline prices and am at a loss to explain why... mexico recently announced that it will cease to ship crude to the u.s. west coast, opec claims it is operating at peak capacity (but george is still asking for more), the u.s. is on the outs with venezuela and iran, and more than 300,000 barrels of oil are missing from the u.s. strategic petroleum reserve, so why are gasoline prices coming down...?

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Wednesday, January 02, 2008

$100 a barrel oil

WOW...! only 1 1/2 days into the new year... THAT sure didn't take long...
Oil prices soared to $100 a barrel Wednesday for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

on another, not-unrelated subject, i wonder when we're going to see bank defaults...?
Superpower America is a ship of fools in denial of their plight. While offshoring kills American economic prospects, “free market economists” sing its praises. While war imposes enormous costs on a bankrupt country, neoconservatives call for more war, and Republicans and Democrats appropriate war funds which can only be obtained by borrowing abroad.

By focusing America on war in the Middle East, the purpose of which is to guarantee Israel’s territorial expansion, the executive and legislative branches, along with the media, have let slip the last opportunities the US had to put its financial house in order. We have arrived at the point where it is no longer bold to say that nothing now can be done. Unless the rest of the world decides to underwrite our economic rescue, the chips will fall where they may.

it's always darkest before the dawn...

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Sunday, November 18, 2007

OPEC doesn't want to talk about the falling U.S. dollar because the talk might make it worse


looks like opec made a big boo-boo...
The accidental airing of a closed OPEC session Friday provided a surprise glimpse into a sensitive debate over the weakening U.S. dollar, with Saudi Arabia's foreign minister warning that even talking publicly about the currency's decline could further hurt its value.

The high-profile blunder ahead of a rare OPEC summit revealed the debate as Iran attempted to convince other member countries to express concern over dollar depreciation in the meeting's final declaration.

Oil is priced in dollars on the world market, and its depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves. Cartel officials have resisted pressure to increase oil production to ease prices.

"The reality is that we have this problem. I think we should draft the declaration to reflect our concerns," Iranian Foreign Minister Manouchehr Mottaki said during a pre-summit meeting here with fellow ministers from the Organization of Petroleum Exporting Countries.

But Saud al-Faisal, foreign minister of U.S. ally Saudi Arabia, came out against the proposal with unusually frank comments.

"In my feeling, the mere mention that the OPEC countries are studying the issue of the dollar is itself going to have an impact that endangers the interests of the countries," he said.

"We all should be worried if any action that we take will lead us to do some injury to our returns on our product," al-Faisal said. "Nobody wants to have less money than more money. I am sure that we all agree on that."

The closed meeting was accidentally broadcast to journalists and after about 40 minutes, an official rushed into the press room and yanked the television cable out of the wall.

can't you just SEE that tv cable come flying out of that wall...?

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Sunday, October 07, 2007

Stop the Spying

A people that wants to be free must arm itself with a free press."
-- George Seldes

As our free press was largely subsumed into a propaganda arm of the government, the Internet began to serve the original functions of a free press. As such, the Internet became a prime target by governments, to be subjugated the same as governments have thoroughly subjugated other media.

The game works like this: Two steps forward, one step back. Just as a frog will jump out of a pot of boiling water, yet will remain if the water in the pot is brought up slowly to a boil, governments crush our inalienable rights, incrementally.

Now and then, the courts will appear to strike down some insult to our Constitution, but that is largely for show. We are allowed to believe that the system is working, albeit slowly.

The apparent rush to jam through the myriad unconstitutional laws is no mere error. It is done by sheer audacity, before the facts can be made known. While we have a somewhat still free Internet, the totalitarians are vulnerable.

Government wedded to corporations is generally known as fascism, or recently, as the 5th Estate. It involves looting the wealth of nations, under the auspices of "privatization".

A recent case that comes to mind is where Bechtel managed to privatize water in Bolivia. That was quickly recognized as a war on the poor. After bloodshed, Bolivia has regained its resources (including oil) and those resources now serve the people of that country, and do not simply line the pockets of a few with massive wealth.

In the US, the Haves managed to install one of their own into power, who quickly set out to transfer as much of the wealth into the hands of his cronies, as he possibly could. Social Security looked like one of the few remaining massive pools of wealth, so that remains a ripe plum.

And machinations are underway to privatize the Internet. That will insure escalating power for the Haves and curb the free press threat that the Internet currently represents to totalitarianism, at the same time.

While Japan, South Korea and much of Europe have fast Internet connection speeds, America's bandwidth has been held back. While much optic fiber has been laid, much remains unlit, and is accurately termed "dark fiber". The strategy is similar to having parked oil tankers teaming with oil, offshore, while proclaiming an oil shortage in order to jack prices up.

Now as a result, some communications companies are engaging in "Packet shaping". "Packet shaping" is the Internet form of wire tapping. It allows them to examine the contents of what is being sent to their customers and to control that content. Those that want to keep the Internet free from privatization, are pushing "Net Neutrality", which opposes packet shaping. Packet shaping allows companies to throttle down speed of any given content and to speed up traffic that serves the companies' interests first. They then no longer are principally carriers, they have become publishers, as if controlling editorial content. That should make them liable for all content as publishers.

The race is on to grant these companies immunity to engage in such spying and to control all content. Some companies, such as AT&T, have announced their intention to team with RIAA and to detect music files that are passing through their systems. A recent case found a women liable for 10,000 times the value of 24 songs she was found guilty of getting. US President George Bush immediately hailed the case as an example that the system is working. More recently AT&T said its spying was to protect the children, which is another tell that they are engaged in massive spying, not just for a war on terrorism with foreigners.

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Tuesday, September 11, 2007

The EPR has been busy once again



i posted back in mid-july on the Ejército Popular Revolucionario [EPR], the little-known group that's blowing up Mexican natural gas pipelines... it looks like they may have been at it again...
In an apparent case of politically motivated sabotage, six explosions blew apart oil and natural gas pipelines operated by Mexico's Pemex state oil and gas monopoly early Monday in Veracruz and Tlaxcala states, causing fires and forcing the evacuation of 15,000 people from surrounding towns.

The blasts forced Pemex to shut down at least four affected pipelines and prompted federal authorities to close two major roads. No injuries were reported.

Mexico is the world's sixth-largest oil producer and a major supplier of petroleum to the U.S. The outages drove the price of oil above $78 a barrel in futures trading Monday.

Monday's attacks occurred two months after a leftist guerrilla group, the Popular Revolutionary Army, known by its Spanish initials EPR, took responsibility for carrying out four similar bomb attacks on Pemex pipelines and a switching station in the central states of Queretaro and Guanajuato.

these people obviously know what kind of destructive action is most effective at disrupting not only mexican but also the global economy...

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Sunday, July 22, 2007

Context-free journalism, Sunday edition: shed a tear for the oil companies' greed

the oil companies are enjoying the most obscenely bloated profits the world has ever seen, yet they're crying over reduced refinery capacity and environmental restrictions that, amazingly enough, are pushing up gasoline prices, meaning that they can make even more money...
Gas Prices Rise on Refineries’ Record Failures

Oil refineries across the country have been plagued by a record number of fires, power failures, leaks, spills and breakdowns this year, causing dozens of them to shut down temporarily or trim production. The disruptions are helping to drive gasoline prices to highs not seen since last summer’s records.

[...]

American refiners are running roughly 5 percent below their normal levels at this time of the year.

“You have a system that is taxed to the limit,” said Adam Robinson, an energy research analyst at Lehman Brothers. “This is what happens when spare capacity is eroded.”

After Hurricanes Katrina and Rita disrupted the nation’s energy lifeline two years ago, oil companies delayed maintenance on many of their plants to make up for lost supplies and take advantage of the high prices. But, analysts say, they are now paying a price for deferring repairs.

[...]

The refining crunch has pushed wholesale gasoline prices up 35 percent this year and has contributed to a 23 percent gain for crude oil prices. Oil futures in New York closed at $75.57 a barrel on Friday.

Some critics of the industry have theorized on Internet blogs that the squeeze on gasoline and other refined products points to a deliberate effort among oil companies to bolster profits by keeping supplies tight. But experts point out that the companies have little incentive right now to hold back on fuel supplies.

“Every refinery would like to run as much crude as possible but they simply can’t,” said David Greely, senior energy economist at Goldman Sachs, who in a recent report compared the drop in domestic refining with an “invisible hurricane.” “These are more complex systems. There are more chances for things to go wrong. And when things go wrong, they tend to back up the system.”

Meanwhile, refiners have been scrambling to meet a raft of environmental regulations, phase out toxic additives, add ethanol to the fuel mix and introduce new ultralow sulfur standards for gasoline and diesel. Industry insiders attribute much of the fragility of refining operations to the difficulty of making these cleaner fuels.

[...]

“It’s a marvel we can continue to run refineries the way we do these days given the many requirements and specification changes we have,” said Charles T. Drevna, executive vice president of the refining industry’s main trade group, the National Petrochemical and Refiners Association. “There comes a time when the piper has got to be paid.”

[...]

No refineries have been built in the United States in over three decades, because refiners say they are too costly. Instead, they have been expanding their existing refineries.

honest to great jumping jehosophat on a bagel, do they honestly expect us to swallow a claim that their failure to deal with refining capacity problems and environmental regulations is something that couldn't have been well and truly foreseen, and that some of that mind-boggling profit couldn't have been reinvested to deal with both in a timely manner...? this is an open and shut case of greed, greed and more greed, and shame on anybody for trying to make us think otherwise...

now, let's jump to the context-free portion of this post... one, nowhere in the article is it mentioned that the oil companies are vertically integrated and most of them own their own refineries... instead the article reads as though the refineries are an industry apart from their parent companies... two, nowhere in the article are the continuing sky-high profit levels of the oil companies mentioned... the closest they come is this...

All this is happening as the industry goes through another golden age. After 20 years in the doldrums, the refining business has never been so good for oil companies. Refining margins — the difference between the price of crude oil and the value of refined gasoline made from it — have shot up as much as $25 a barrel for some types of crude oil, compared with about $5 a barrel just a few years ago.

again, refining is presented in a box, with its profit margins not explicitly connected to the profitability of the parent company, and we are left with an incomplete and misleading picture...

here's what conocophillips says about how oil company profits should be used...

Basically, oil company profits are used for two purposes: to pay dividends to shareholders in the business and to pay for capital investments to find, produce, process and deliver energy products to consumers.

find, produce, PROCESS and deliver... but they aren't reinvesting in the processing side... why...? maybe this article on the 2007 first-quarter earnings report of exxon mobil holds a clue...
Exxon Mobil, the world's biggest oil company, said profit climbed 10 percent to a first-quarter record after higher gasoline and diesel prices increased refining profit.

Profit rose to $9.28 billion from $8.4 billion in the comparable period a year earlier, the Irving, Tex., company said in a statement yesterday. Revenue fell 2 percent, to $87.2 billion.

Refining profit rose 50 percent, as the company increased fuel output at its 45 plants and as growing demand and breakdowns held back competing producers.

or this from 2006...
ExxonMobil, the world's biggest oil company, announced that it earned more than $8 billion in the first three months of the year. The news follows Conoco Phillips' announcement that it earned $3.3 billion during the first quarter of 2006. Chevron is set to announce its quarterly profits Thursday.

or this from 2005...
Exxon Mobil Corp., the world's largest publicly traded oil company, said yesterday that second-quarter profit rose 32 percent, to $7.64 billion, as Asia and North America used more crude oil and gasoline.

The quarterly profit was the third-highest in the company's history. Revenue climbed 25 percent, to $88.57 billion, Exxon said.

didja catch all that...? a profit increase of 32% to $7.64B in the SECOND QUARTER of 2005, jumping to $8B in the FIRST QUARTER of 2006, and 10% to $9.28B in the FIRST QUARTER of 2007...

think about that at your next fill-up...

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