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<div> <font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;">I believe that the pricing formula is very complex and may or may not track toward just supply and demand. Most of the refineries in this country are operating at nearly full capacity and there are no new ones coming on line, partly due to regulatory hurdles taking decades to get permitted and partly from the low margin on the throughput, I have heard as low as 2%, a serious impediment to an investment of billion or more dollars for a new one. </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-tab-span" style="white-space:pre"> </span>Of course, there are always politically motivated actions such at the Keystone Pipeline that can affect pricing at any time and have no particular predictability. </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"> In a localized event, a Texas refinery went down for a turnaround and the prices in the area rose significantly. </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-tab-span" style="white-space:pre"> </span>On the demand side, we have cars getting more fuel efficient and some expanding mass transit, which makes the formula more complex. Some EU cars get 40% more milage than the same US models, Ford makes a very high efficiency engine in the US, exports it and cannot use it in US vehicles although it meets EU and US emission standards </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-tab-span" style="white-space:pre"> </span>Further, on the supply side, fracking and other recovery processes have permanently affected natural gas supply, however with the limited refining capacity, the liquid fuel production is not as easily affected. </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-tab-span" style="white-space:pre"> </span>With fracking, the US is becoming less dependent on foreign oil and before the large Mideast finds, Texas crude was the world benchmark, and may return to that some day, going way out on a limb. </span></font></div>
<div><font class="Apple-style-span" color="#000000" face="arial"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-tab-span" style="white-space:pre"> </span>My conclusion is that oil pricing is largely a political product and as long as the status quo stays, will continue to be so. . </span></font></div>
<div style="font-family:arial;color:black;font-size:10pt;clear:both;"><font class="Apple-style-span" face="arial">Sincerely,</font><br>
<div><font class="Apple-style-span" face="'Comic Sans MS', sans-serif">Leland T. "Tom" Taylor</font></div>
<div><font class="Apple-style-span" face="Arial, Helvetica, sans-serif">Thermogenics Inc. </font></div>
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-----Original Message-----<br>
From: Steven Barber (RIT Student) <stb4703@rit.edu><br>
To: Discussion of biomass pyrolysis and gasification <gasification@lists.bioenergylists.org><br>
Sent: Thu, Apr 3, 2014 6:15 am<br>
Subject: Re: [Gasification] Demonstration and Training Unit<br>
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<div>Hi Tom,<br>
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I've been doing some research on the price of commodities for several years now. Since global producers of oil can quickly ramp up (or down) production to meet any level of current demand, we can essentially take out supply and demand out of the equation (except for the very short term refinery explosion, Nigerian coup, etc.). Since oil is priced in dollars, the relative value of the dollar itself determines the price of oil. More value, less dollars needed to buy, less value, more dollars needed to buy. For stable oil prices, we simply need a steady or slightly increasing value of the dollar.<br>
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<div class="aolmail_gmail_extra">Regards,<br>
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<div class="aolmail_gmail_extra">-Steve<br>
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<div class="aolmail_gmail_extra"><br>
<div class="aolmail_gmail_quote">On Wed, Apr 2, 2014 at 9:41 PM, thomas reed <span dir="ltr"><<a href="mailto:tombreed2009@gmail.com">tombreed2009@gmail.com</a>></span> wrote: <br>
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<div>Long term, I believe that FRACKING will make oil prices stable, so don't count on oil increasing in price. </div>
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<div>COMMENTS?</div>
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<div>Tom Reed<br>
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-- <br>
<div dir="ltr">Steven T. Barber<br>
MS Finance '12<br>
PhD Sustainability Student<br>
Golisano Institute for Sustainability<br>
Rochester Institute of Technology (RIT)<br>
<a value="+15855821574"><font color="#0066cc">585-582-1574</font></a> - Office<br>
<a value="+15853708598"><font color="#0066cc">585-370-8598</font></a> - Cell</div>
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