Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (394627)	6/27/2008 6:08:29 PM
From: tejek	Read Replies (1) \| Respond to of 1590540

Having looked at it from all sides, I tend to agree with your assessment. There may be some spec component to the current price for crude but I don't think its much larger than 20%.......which is a lot but not enough to make oil cheap. I guess it gets confusing when you read that so many people are blaming it on hedge funds and their alleged speculation. Personally, I am beginning to wonder if the speculators have much to do with it. What we may be seeing is the realization that we are at peak oil. Or, at least close. Saudi Arabia is straining and they might squeeze out another 10%. Then again, they might not. What gave me pause was when I researched to refinery expansion that is going on in the US. All that I found was focused on heavy, sour crude. As you have noted, the economics are in the light, sweet camp. Yet, the oil companies are investing in heavy, sour crude. They have avoided that for decades. Most of the refineries that handle sour crude are independents who need every penny they can squeeze to stay in business. If the majors are going for the sour stuff, that tells me they have crunched the numbers and have come to the realization that there won't be much of the good stuff coming online. So, to maximize their current investment, they are putting in the equipment they need to make sure they can get past no more sweet crude.