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>>Saudi Arabia has twice offered to build a new refinery in the U.S. as a direct way of highlighting the REAL problem that is hurting U.S. oil/gas prices.
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>Saudi Arabia and Royal Dutch Shell are involved in a couple of refinery projects, just not in the US. See below
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>>The oil companies have NO USE for increased refining capacity because all that can do is cause LOWER GAS PRICES and it is not in their interest to have low gas prices.
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>Your lack of knowledge of economics is staggering. The profit margin for gasoline is steady at around 9-10%. They make their profits on volume. More refining capacity leads to more gallons produced leads to more gallons sold leads to greater profits on volume.
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>>They lose profit with each penny of price drop!
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>Wrong, see above

No, I think my knowledge of economics far outweighs your meagre capabilities for analysis!
You say the profit margin on gasoline is steady at 9-10%.
Using that "fact" (you only deal in facts, right) please explain how all the U.S. oil giants made obscenely record profits last year when in fact because of Katrina sales volumes were down.
You've swallowed the oil companies' line without thinking it through yourself.

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>>The oil companies are sitting exactly where they want to be... allowing claims of supply/demand on the world market to be the cause of higher prices when in fact it is their closure of refineries years ago - to bring on this situation - that is the real cause.
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>There have been and still are attempts to expand refining capacity which are being shut down by coordinated efforts of environmental activists and NIMBYs.
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>Lookee here:
>http://www.fool.com/News/mft/2005/mft05091414.htm
>"To get an idea of what it takes to build a new refinery, one can look at Arizona Clean Fuels Yuma. This company has been trying to build a new refinery for six years, and not a single shovel of dirt has moved. The company is still fighting its way through city, county, state, and federal permit procedures. Between various levels of government, environmental organizations, and community groups, there are seemingly endless obstacles before construction can begin. Even if the stars align, Arizona Clean Fuels Yuma will not be running until the end of the decade."

Is this one of the oil giants? Is this on land formerly occupied by a refinery or with a mothballed refinery already sitting on it? NOT ON YOUR LIFE!
The oil companies, who do own lots of such tracts of land, are making NO EFFORT to expand/build refining capacity BECAUSE IT'S NOT IN THEIR INTEREST TO DO SO. Why do you think there hasn't been a refinery built in the U.S. since 1976?... because of the environmentalists?... Not even close. They were hardly a force in 1976 and were too busy fighting nuclear in the several years after that!
The oil companies consolidated in the mid-late 90s and SHUT DOWN 1 in 3 refineries while doing so.
There public reason for doing so was "redundancy", as they now owned 2 or more refineries in the same region. Ignore the fact that those 3, formerly operating at around 70% capacity each, left 2 now operating at 100% capacity thus leaving a 10% gap already in former production availability. When they saw they could increase prices as a result they liked that and set about to replicate the situation where ever they could. And they succeeded!

Think things through a bit, Jake. It's clear as a bell how the oil companies set themselves up to be exactly where they are today and that they have no interest in changing that.
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