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Surge in oil production is keeping the price of crude from rising too high but we've got somebody uses the supply -- and the subsequent price drop of crude may not provide you much relief -- all at the pump.
But what's the stop trade joining us now -- -- chairmen.
Peachtree partners and -- this is a little bit of a conundrum isn't it -- as we look at we see.
That crude oil has fallen today are Bob gasoline the wholesale price gasoline that trades done at the nymex also fell but.
Nonetheless we're still seeing well above four dollars a gallon at many gas station that is not breaking that floor.
Down above four dollars why why the disparate.
Well I -- we've got other constraints in the delivery system and and inventories that are on the low side.
For the products.
But you're right it is a surprise or pass -- driving season normally you'd have a seasonal downturn here.
-- these these crude prices though are elevated enough that I think.
There's a real incentive for the downstream into the business to try to hold them up as long as they can.
And I I expect would have been -- -- as we get into the winner.
Tom looked from one -- I can tell demand is falling.
With the global economy slowing down -- offering a best supply increasing.
Why is an oil dropping lower than it is.
I think it's a matter timing.
When you really think about oil prices.
Most of -- pricing is against the Brent price moves toward north of -- 110 dollars a barrel.
And there is a cumulative demand destruction going on.
And it's one of those things where for a while the market doesn't recognize it and -- one day it wakes up and and we get a big adjustment and I think that's coming but you could be another 234 months.
Okay two or 344.
More months but what where -- you oil prices go.
And why is there also still -- we've seen this now for about a year as such a big difference between west Texas intermediate which is what is here in the United States and Brent crude which is what trades overseas.
Brent is a lot more expense.
That's right in the main reason is that that we're producing more oil in this country but it's it's not located.
In thin in spots -- it's easy to get it to market.
And as a result you're getting this disparity.
I do think that that in terms of -- of US oil.
We we saw earlier this year oil prices tests of below eighty dollars a barrel for a fairly brief period of time.
I would not be surprised.
You know during the first half of next year to see that tests to come again Thomas well.
All of that and I had I had truck because I'm just dying to know it if if you what you say is true in that we don't have enough of the actual product and that is more gasoline.
-- would would an investment be more appropriate in the refinery business.
Well the refinery business is doing better now than it has but there's a real -- -- yet going on.
But but you're right.
Refining margins -- you have come back quite a bit.
And the interests of investors in the refining stocks is greater than I've seen in some.
Some years now.
Tom does tension in the Middle East essentially keep oil around 85 to ninety bucks a barrel.
Well it -- it certainly is a factor.
I'm not convinced -- keep that are quite at that high price especially as we get a little further -- this little but until we know.
A little bit more about what's going on between Iran and Israel.
And what's going on between China and Japan.
Now all of those geo political factors do contribute to keeping an insecurity premium in the price you -- what it takes is one headline and oil -- heading up all right compatriot Tom thank you so much.
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