CNN Money raised an interesting question:They also pointed out that the oil producing countries are building refineries and shipping final product instead of just crude. But this does raise an interesting challenge.

Would investing in a refinery be a good 401k strategy?

Bob Wilson

 

I think so, short and medium-term.
Long-term remains to be seen, but I've gotta believe we eventually lift our heads out of that sand - and move on to another energy source.
Plus, if we've really already hit Peak Oil, then it's a dwindling proposition, as the existing refineries would eventually be able to handle ALL the oil being harvested.

There are SO many people hoping, just hoping, that we'll be able to get every last drop of oil (and somehow do it at a reasonable cost) for many years to come. They think the "new" finds near Rio (under the sea, collected by very expensive boat-barge/drilling-rigs) will bring "balance" back to the price of oil. I'm not sure, but that kind of drilling sounds awfully expensive to me. No-one's going to "give away" that oil, as it's likely very expensive to harvest. But maybe they are right, and "reasonably priced" oil will remain for quite some time. If so, then consumption will continue to be high - and likely even increase.

 

There is no shortage of oil. Or gasoline in the U.S.

A report on Fox News yesterday said that U.S. refineries are SLOWING DOWN production this week as gasoline storage facilities are reaching full capacity.

Ethanol stock prices are falling, as ethanol profits are in decline, and there is a hold on new ethanol construction because ethanol producers have full tanks and can't move the product out of the mid-west fast enough.

The price is up primarily because the U.S. dollar is weak.
Also, OPEC has lots more customers these days, so the U.S. has much more competition now than it did just one or two decades ago. ( read into that China and India are buying oil in large quantities for the first time )

 

It's also up because oil producing nations know that tension in the middle east is good for business, so any problems is good for them. Just ask Putin (PM now).

 

Tension in any oil-producing area is good for business, as the fear of a shutdown raises speculation and prices.