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Valero Energy Corporation Message Board

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  • huikh2r huikh2r Aug 1, 2006 11:11 PM Flag

    Proof VLO is undervalued

    why would crack spread goes down? There is no new refinery being built. no extra competition in coming years.

    Think about this, real estate has a big bubble, and people have been talking about the bubble for years, have you seen a big drop in housing prices? Yeah, slow down some in some areas, but no big price drop.
    In some areas, even there is no shortage of land, teh housing price has gone up substantially in past few years, but why haven't seen the price going down?

    Oil will stay greater than $3.00/gallon for many years, simply because those oil companies can charge more. If one day the price is so high, say $10/gallon, the demand will reduce, then we may see a price drop, but for now, the demand is still growing. American people are buying $3/gallon without any problem.

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    • I don't know where you live, but (1) House prices have declined up to $30K in many of the places where they climbed the greatest; and (2) Most people are not paying $3/gallon. I travelled from Mrytle Beach to NYC last week and never paid over $2.85.

      I do agree with your point, in general, but you grossly overstate the case. Don't be surprised if gasoline is not significantly over $3 for years.

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