Where is the oil/gas you are buying originating from? - Tilted Forum Project Discussion Community

ASU2003 · 01-15-2006, 04:04 PM

I'm watching the NBC nightly news, and they said that Venezuela owns and runs Citgo. I am thinking that Citgo would sell gas imported from Venezuela only then.

Am I wrong, and gas refiners just buy oil from any country for the cheapest amount. Or are do some companies have contracts with Mexico, Russia, OPEC, Venezuela, US...

alpha phi · 01-15-2006, 06:33 PM

All the gas is ran through the same piplines
so in fact it is mixed.
the difference is what goes into the pipeline.
A company....say Citgo puts one million gallons in at the Texas refinery,
at the distrubution center they can take out up to one million gallons.
buying gas at citgo does not mean you are burning Venezuelan oil
It does mean you are putting more Venezuelan oil into the total market.
Citgo is also mostly owned by Venezuela
so the profit supports the Venezuelan goverment and people.

Charlatan · 01-16-2006, 06:08 AM

Quote:

Originally Posted by ASU2003

Or are do some companies have contracts with Mexico, Russia, OPEC, Venezuela, US...

Just a note: Venezuela is part of OPEC. In fact, it was in part a Venezuelan idea that gave birth to OPEC.

Additionally, in the past few years it has been Hugo Chavez that has reignited the OPEC fires, so to speak.

kutulu · 01-16-2006, 07:27 AM

So it's kind of like the electricity grid... You get power but you can't tell if it was made by the local power plant or one three states away.

Bill O'Rights · 01-16-2006, 07:46 AM

Quote:

Where is the oil/gas you are buying originating from?

Decayed plant and animal matter. I think.
Beyond that, the gas and oil, that I buy, comes from Phillips 66, Sinclair or the Quick Trip.

BigBen · 01-16-2006, 07:46 AM

Three states away? Try three countries away, in most cases.

As a commodity market, you don't get to choose where your product comes from. There is no location identifier to differentiate from.

I can understand where you would be willing to purchase domestic oil at a premium, to make a political or philosophical statement, but may I also ask: What is your choke price? Would you be willing to pay double, or just a few cents more?

Oil is categorized by its grade (heavy, sweet crude) thus telling the buyer how easy it will be to refine into consumer goods. It is also paid at a delivery point, that is to say, all transportation costs are included. This creates a fairly homogeneous product, and the free market loves homogeneous products. You want to stir up that market by adding in another variable.

xepherys · 01-16-2006, 09:40 AM

Yes, petro and electricity work in similar ways. If you remember the NE blackout a few years back, it was partially due to a failure in the interchange system. One major distributor in Ontario had some difficulties that caused a brownout condition, this was quickly countered by either Detroit Edison, or the power company in Buffalo (they couldn't be sure at the time, and it may have been both). This is why it's a power grid, it interconnects facilities. The problem is that once the coniditons were "balanced" other problems crept up in the way that the interconnects worked, and power was being hemhoragged somewhere along the line, which led to a complete failure of the system. NERC has been pushing new requirements to help prevent this on the technology side of things, and from the small amount of NERC assessments I've done, I'd say it's helping at least some.

As for fuel, as mentioned above, it all gets put into the pipeline, regardless of where it comes from. Even American oil gets pushed through the same pipeline. So the fuel you pump may be 5% American, 50% Venezualan and 45% Saudi. Who knows. The problem with this is it completely drives cheaper business. There is no reason to get, say, Venezuelan oil instead of Saudi oil if Ven charges $0.02 more per barrel. Why? Because you're paying more, but the overall picture doesn't change much. If a LOT of companies did that, then a change could be made, but since many petro companies in the US are owned by foreign oil vested countries, that would likely never happen.

01-15-2006, 04:04 PM	#1 (permalink)
ASU2003 immoral minority Location: Back in Ohio	Where is the oil/gas you are buying originating from? I'm watching the NBC nightly news, and they said that Venezuela owns and runs Citgo. I am thinking that Citgo would sell gas imported from Venezuela only then. Am I wrong, and gas refiners just buy oil from any country for the cheapest amount. Or are do some companies have contracts with Mexico, Russia, OPEC, Venezuela, US...

01-15-2006, 06:33 PM	#2 (permalink)
alpha phi seeker Location: home	All the gas is ran through the same piplines so in fact it is mixed. the difference is what goes into the pipeline. A company....say Citgo puts one million gallons in at the Texas refinery, at the distrubution center they can take out up to one million gallons. buying gas at citgo does not mean you are burning Venezuelan oil It does mean you are putting more Venezuelan oil into the total market. Citgo is also mostly owned by Venezuela so the profit supports the Venezuelan goverment and people. __________________ All ideas in this communication are sole property of the voices in my head. (C) 2005, 2006, 2007, 2008, 2009 "The Voices" (TM). All rights reserved. Last edited by alpha phi; 01-15-2006 at 06:37 PM..

01-16-2006, 07:46 AM	#6 (permalink)
BigBen Comedian Location: Use the search button	Three states away? Try three countries away, in most cases. As a commodity market, you don't get to choose where your product comes from. There is no location identifier to differentiate from. I can understand where you would be willing to purchase domestic oil at a premium, to make a political or philosophical statement, but may I also ask: What is your choke price? Would you be willing to pay double, or just a few cents more? Oil is categorized by its grade (heavy, sweet crude) thus telling the buyer how easy it will be to refine into consumer goods. It is also paid at a delivery point, that is to say, all transportation costs are included. This creates a fairly homogeneous product, and the free market loves homogeneous products. You want to stir up that market by adding in another variable. __________________ 3.141592654 Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

01-16-2006, 07:27 AM	#4 (permalink)
kutulu Junkie	So it's kind of like the electricity grid... You get power but you can't tell if it was made by the local power plant or one three states away.

01-16-2006, 09:40 AM	#7 (permalink)
xepherys <3 TFP Location: 17TLH2445607250	Yes, petro and electricity work in similar ways. If you remember the NE blackout a few years back, it was partially due to a failure in the interchange system. One major distributor in Ontario had some difficulties that caused a brownout condition, this was quickly countered by either Detroit Edison, or the power company in Buffalo (they couldn't be sure at the time, and it may have been both). This is why it's a power grid, it interconnects facilities. The problem is that once the coniditons were "balanced" other problems crept up in the way that the interconnects worked, and power was being hemhoragged somewhere along the line, which led to a complete failure of the system. NERC has been pushing new requirements to help prevent this on the technology side of things, and from the small amount of NERC assessments I've done, I'd say it's helping at least some. As for fuel, as mentioned above, it all gets put into the pipeline, regardless of where it comes from. Even American oil gets pushed through the same pipeline. So the fuel you pump may be 5% American, 50% Venezualan and 45% Saudi. Who knows. The problem with this is it completely drives cheaper business. There is no reason to get, say, Venezuelan oil instead of Saudi oil if Ven charges $0.02 more per barrel. Why? Because you're paying more, but the overall picture doesn't change much. If a LOT of companies did that, then a change could be made, but since many petro companies in the US are owned by foreign oil vested countries, that would likely never happen.