Randall wrote:
Don't kid yourself Randall,
Valero buys huge amounts of oil from all over the globe. They can compete
on price so well due to buying most of their crude on the spot market
instead of having long term contracts.
Perhaps it's because I've been enjoying this nice Scotch ... but I don't see how
that would make it easy for them to compete against the people who own wells,
like Shell and BP/Amoco.
In a glut market (even if temporary), they can get deals buying on the
spot market. In the current market, it's doubtful they're making a big
killing by buying in that way--if they were after high-demand
feedstocks, as many refineries are. If they've retooled for high-sulfur
oil, they're cherry-picking deals on oil nobody else wants at the time.
That's my guess.
Come to think of it, does Shell even sell retail gasoline any more ? All the
Shell stations near my house have closed, probably because they refused to
replace their leaky single-wall underground tanks.
This may have something to do with the Chevron/Texaco merger. Shell was
blocking the merger--until Texaco agreed to sell them their share of
their refining/retail franchising operations, Motiva (Shell now jointly
owns it with Aramco), and 100% of Equilon. In the process, Shell
acquired a lot of Texaco retail outlets, and they're still in the
process of converting those to Shell branding. Shell may have simply
walked away from those outlets destined to be unprofitable (because of
the need to change tanks, for example) and your nearest Texaco may soon
become a Shell station. It may take a while for the change to become
obvious--Shell said, last year, that they are starting the changeover in
Louisiana. A year or two from now, the only Texaco stations still
carrying that name will be getting gasoline from ChevronTexaco-owned
refineries, while Shell will be getting their fuel from refining
subsidiaries formerly part-owned by Texaco.
Cheers.
--
Never let anyone drive you crazy when you know it's within walking
distance....
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