Isn’t it funny how things work? Crude oil prices at $70 a barrel two years ago was good. Now, it’s very bad. See the big major oil companies, got used to reporting record profits for their fuel companies at $100 to $148 a barrel for crude oil.
Like the old expression goes, all good fuel things must come to an end. Now, we have excess capacity, weak demand for fleet fuel and rising fuel product inventories continue to squeeze margins for U.S. oil refiners.
What will big oil do? Easy, close every possible refinery that they can or have “issues” at refineries so they can keep production down. It’s their own little cartel on keeping fuel prices high and fuel programs higher.
What you haven’t heard? Sunoco closing a refinery they bought a few years ago in New Jersey. Valero has an extended shutdown at its Aruba refinery. No, crude oil (fleet fuel) coming out of the tropics. Valero again cutting back process and capacity in Delaware. ConocoPhillips saying it would sell assets to terminals and refineries. All of this in the last two weeks. But wait there will be more. You see, in the oil business its monkey see monkey do.
There will be others who have “issues”, need unscheduled repairs as they call them or more commonly known to regular people as grab your ankles this one is going to hurt. See OPEC, a slip of the tongue. The major oil companies band together, as far as we know there are no formal meetings or that would be collusion. Who’s to say there aren’t a few golf matches that take place between these fuel giants. The conversation may go something like this, “you do this and we will do that and our shareholder’s and us will all get rich together!”
Does that sound like Oliver Stone’s, JFK to you? Think Enron, MCI, Tyco all of these banks does that seem like JFK to you?
Fuel prices are controlled by someone every step of the way. Free enterprise or space ship enterprise, I can tell you this, if you don’t have someone in your fuel management corner watching out for your fuel planning and fuel program your going to be all wet. See they don’t say oil is a dirty business just because you get your hands dirty when you touch it.
Sokolis for all of your fuel management, fuel planning and fuel consulting needs. 267-482-6155
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