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Amazon.com Inc. Message Board

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  • britbabyboomer britbabyboomer Sep 15, 2005 2:13 PM Flag

    Gasoline futures will break soon.

    I'm afraid that gasoline prices are not going to fall dramatically in the near or far future.

    There is plenty of oil in the world but not enough refining capability. The experts were screaming about a year ago saying that there was only 2% spare refining capacity in the world. With Katrina knocking out a sizeable bit of this capacity in the USA coupled with China and India with 3 billion plus people buying cars like there is no tomorrow, the business to be in at the moment is refining, and prices are going to stay high and may even get higher in the next year or two until people start building more refineries.

    Here in the U.K. Richard Branson (of Virgin Group fame) was on the news saying that he was thinking about building his own oil refinery to supply Virgin airways with its fuel needs. That is how bad he thinks future demand for gasoline and kerosine (what jet planes use) will be.

    So don't count on gas prices to help AMZN or anybody else for that matter, other than oil companies with big refining capability. Look at marathon oil MRO up 15% since one day before Katrina struck, and they lost a lot of capacity in the Gulf from the damage, but their remaining capacity is worth so much more now the stock has climbed dramatically.

 
AMZN
360.84-0.43(-0.12%)Jul 22 4:00 PMEDT

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