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Not just taxi drivers anymore

Posted by Yankee on September 12, 2005 - 2:38pm

News roundup: One week after Katrina, how are high gas prices affecting us?

And the Dallas Morning News tells us where in the oil production chain they think the money is going to: the refiners. (Bugmenot login under the fold.)
Bugmenot: dale@loginsblow.com, threecar

Energy companies of all stripes are benefiting from higher oil and gas prices, but the big winners aren't the giant oil companies or the neighborhood service stations. It's the refiners - the companies that turn crude oil into gasoline, diesel and heating oil.

"Obviously, at $60 oil, the producers make enough money. But the guys who are really making enormous amounts of money in the whole energy spectrum are the refiners," said Oppenheimer & Co. analyst Fadel Gheit.

Experts say it's not a matter of manipulation or gouging, but simple supply and demand.

And one last tidbit: Natural gas prices threaten school budgets in Oil City, PA. (OK, I know this isn't that interesting, but I couldn't resist the fact that it was set in Oil City, and that the paper is called The Derrick.)

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Not just taxi drivers anymore

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Dave Cohen on September 12, 2005 - 3:31pm Permalink | Comments top
Re: Dominos Pizza and Demand
Both Carucci and Brandon said new pizza varieties are key to piquing consumers' interest and getting them to pick up the phone. Domino's scored big earlier this year with its American Classic Cheeseburger Pizza, one of a couple of limited-time offers Domino's does ever year and that Brandon said have been instrumental in driving sales momentum at the chain.

"We like new and innovative things," Brandon said of fickle and time-strapped U.S. consumers. "Our attention span isn't what it once was."
So, how much are you willing to pay for ... ahhhh ... let's see, I was talking about food here ... uhmmm ... something about the fuel costs of delivery ... no, it wasn't Chinese takeout ... it was... Damn! I've forgotten what I was taking about.

Nevermind.
odograph on September 12, 2005 - 3:52pm Permalink | Parent | Comments top
Once you key to this you notice that the fast food joints are constantly inventing new meals.  That's because they are generally at max locations, and max per-store revenue.  The new foods are needed to pull enough people from their competitors that week to keep sales "flat" ... never mind an increase.

(Actually I think the better the fast food the less their menu changes ... it's the purveyors of bad food who sell the "hope" that "this time it will taste good.")

Halfin on September 12, 2005 - 3:49pm Permalink | Comments top
Well, this contradicts what your "insider" buddy was telling us last week about how the refiners weren't at fault, it was the evil and greedy distributors, the guys who drive the oil trucks and run the pipelines. I got the impression that oil companies were just in the business for love, and if they accidentally happened to make a penny or two of profit why then of course they would immediately donate it to the widows and orphans fund.

http://www.theoildrum.com/story/2005/9/7/83346/22387

Dave Cohen on September 12, 2005 - 4:14pm Permalink | Parent | Comments top
Apropos: from Rigzone today.
Crude oil futures in New York dropped more than $1 to below $63 a barrel Monday, amid concerns that high prices had begun to chip away at demand for oil and refined products....

"The aftereffect of the hurricane is working out to be a detriment to demand, and no one saw that coming," said Michael Guido, director of commodity strategy in New York for French bank Societe General.
Whatever it is vis-a-vis gasoline prices, it looks like it's in the refinery business ... and we'll what happens to gasoline prices in the next few weeks.
Stuart Staniford on September 12, 2005 - 4:22pm Permalink | Parent | Comments top
LOL :-)
Dave Cohen on September 12, 2005 - 4:47pm Permalink | Parent | Comments top
Second that. Will You Join Us?
Dave Cohen on September 12, 2005 - 5:02pm Permalink | Parent | Comments top
Ah, I forgot to tell you who "us" are. OK, I'm bitter -- so what?
Yankee on September 12, 2005 - 5:44pm Permalink | Parent | Comments top
Hey, Halfin, I could have...ahem...neglected to post this link, but I thought it more intellectually honest to put it out there. Personally, I don't know what to believe. In any case, last week we were talking about gouging, and whether there was anything illegal or unethical going on. This Dallas Morning News article says "Experts say it's not a matter of manipulation or gouging, but simple supply and demand." If true, then no matter what, it's STILL WRONG for Senators to get themselves in a tizzy and demand to know who's charging exorbitant prices at the pump. 'Cause maybe it really is just the market, and the consumer is actually to blame in this case.
Rajiv on September 13, 2005 - 9:03am Permalink | Comments top
Couple of interesting articles in the Energy Pulse

The Impact of Oil Supplies on World Peace

and

Insidious Inflation

tom deplume on September 13, 2005 - 1:44pm Permalink | Comments top
Suppose the pizza delivery guy gets 25 mpg like my car. Therefore a $1 rise in fuel costs works out to 4 cents a mile. The IRS proposes raising the writeoff by 8 cent a mile.  Hidden subsidy or what?
Ben on September 13, 2005 - 2:22pm Permalink | Parent | Comments top
I think we'd have to know more about their calculations.  Not that long ago gas was much cheaper.

The original 2005 IRS mileage rate (40.5 cents / mile) was calculated using prices as of September 2004, when it was rare to break $2.00; and also they probably aren't counting on 25 mpg.  The rate covers cars, pickups, and panel vans.

Just for kicks, here's the current gas and diesel analysis with comparison to last week, last year, by region, from the DOE.

Not just taxi drivers anymore

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