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To: GST who wrote (108135)	9/8/2000 9:54:59 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 164684

>> You seem to miss the point. More oil CANNOT solve the problem. More refining capacity is needed to solve the problem << GST, There is no way for refining capacity to have fallen this much lower in a year or two. A year ago there was a huge glut of REFINED gasoline. That could happen only with adequate refining capacity. The fact that supplies are tight now is due entirely to refineries running below capacity because they did not want to buy crude oil at high price. Once it is clear that crude price is staying high, refiners will buy and process enough to meet demand. It is simply impossible to accept that there is a permanent shortage of supply in refined oil. But the best positive proof that the problem is not shortage of REFINING capacity is the fact that crude price is high. If there was refinery shortage, the crude demand would not go up, and crude price would drop. Why would refiners buy and store crude that they could not process ? The fact is they are buying crude, and more than ever. That is why crude price is up. The minute refinery capacity is reached, crude price will pause and likely drop. I'm not even an economist, but I can be just as wrong as any of them. By the way, banks were up again today. Must be banking on a rate drop. Another thing. What happened to all the money Japan was going to pull from the US market ? Did they ? Or do we still need to worry about that double whammy ? Amazingly, my acct is up this week. Banks, auto parts, disk drives, machinery, and other sensible sort of investments. I guess only the speculative stocks sold off. Maybe my turn next week. But I think common sense will prevail. After all the bubble is a lot less frothy now, isn't it! Sarmad

To: GST who wrote (108135)	9/8/2000 10:12:08 PM
From: schrodingers_cat	Read Replies (2) \| Respond to of 164684

Looks like overseas refineries are busy too... From the London Financial Times: Although there is still some spare refinery capacity in Europe, analysts say it is uneconomic to use, and is of little help to the US. Shortages may well persist into the winter and as demand rises price spikes for some products are a distinct possibility. Tankers are also in short supply: The fundamental problem is that there is little leeway in the production chain that takes oil from a hole in the ground to consumers' cars and homes in Europe and the US. Most Opec countries, with the exceptions of Saudi Arabia, Kuwait and the United Arab Emirates, are already producing at or close to full capacity. The world's tanker fleet is operating at 97 per cent capacity for the first time since 1973. Refineries, in the US at least, are working flat out. US crude stocks are at their lowest for 24 years and developed country stocks of petroleum are as low as they were in 1996, which in turn was the lowest level since the mid-1980s. The upswing of oil prices is not just the result of Opec's supply restrictions. There has also been strong global demand, as the world economy has had its best year since the 1980s. As in the classic business cycle model, supply fell when prices were low and is taking time to respond now they are high. news.ft.com So if the Saudis pump more oil there may be no tankers to move it out of the Persian Gulf, and if the tankers are there then there may be no place to refine it. Let's hope for a warm winter.<g>

To: GST who wrote (108135)	9/8/2000 10:27:05 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

GST, I am not in agreemnt with you regarding the market falling apart due to the cost of energy. The possibility exists and I am now on margin and am concerned. You are correct about no net new refiner capacity coming on-line for ten years or more. You stated twenty years and that may be correct. There are no net new refining capacity systems in the works based on information I looked at compiled by the DOE which is typically accurate. I did read the fastest new refineries can be built is three years and typical time frame id five years. One of the major problems you pointed out was the major refiners took many refineries off-line to do maintenance while they waited for raw crude to drop in price. Now we have refineries that are well maintained and ready to roll but at a time when refined distillates are at close to the lowest inventory levels that I can recall and demand for this pariticular refined product is going to escalate within eight weeks. They can all refine distillates but what happens when gasoline stocks drop to the point of spot gasoline shortages? This was a really stupid move to say the least.

To: GST who wrote (108135)	9/9/2000 2:19:15 AM
From: Bill Harmond	Respond to of 164684

See next

To: GST who wrote (108135)	9/9/2000 2:19:59 AM
From: Bill Harmond	Read Replies (2) \| Respond to of 164684

You're over the top, GST. We've all seen this movie before in 1973 and 1979. The world isn't ending. The soaring dollar is as big a problem as is the price of oil. Oil is priced in dollars so citizens and industries outside the US are taking a far greater hit during this recent rise than we are in the US. I hear the French are paying $4.75 for gasoline. Your Japan is in the same bind. We need a currency scare so the Fed knows it has gone as far as it can without upsetting world order. We had a currency failure at the end of the 1994-95 series of hikes (Mexico), and the 1997-98 hikes (the Far East). The US economy is the strongest in the world, hence will suffer least. Somebody else will crack first.