How Speculators Are Trying To Turn Drinking Water Into The Next Consumer 'Gouge' Item

I love Phil Davis. He speaks truth.

Here is an excerpt of what he wrote this morning.

The last paragraph is about water. The first several are about oil and gasoline and the criminal refiners.

The whole article is linked.

http://seekingalpha.com/article/36555

OPEC (and, as ZMan points out, the "C" stands for Cartel) stepped in to stop yesterday’s 2.4% drop in crude by indicating they would not be increasing output this summer. They rightfully pointed out that the real cartel at work here are the US refiners, who now mark up a barrel of oil 162% by the time it’s sold at the pump. Since OPEC nations do indeed incur some very real costs pulling oil out of the ground (let’s say $20 per barrel) and since a refined barrel of crude was recently (pre-Bush) available for just $42 per barrel ($1 per gallon at the pump), one could infer that $126 per barrel of the $168 per barrel we pay (at $4) falls under the the heading of "windfall profits."

From OPEC’s perspective, why do anything to decrease the cost of oil they sell to the President’s largest campaign contributors when all they do is use it to increase their margins? No drop in oil since Fall ‘05 has led to a drop in gasoline prices, as more than 10% of the nation’s refining capacity has been kept off-line for almost the entire last 18 months. While the refineries burn or get taken down for maintenance, Valero Energy Corp. (VLO) (for example) bought back over $2B of its own stock while spending little enough on that maintenance (and fire prevention) to keep its average operating cost per barrel down to just $4 (I kid you not!).

I have this same issue with Nigeria, where six more hostages were taken this morning, this time seizing six construction workers on a boat. This brings the count up to 200 foreign workers and 100 kidnapping incidents this year (once every 1.4 days on average) that has cut Nigeria’s oil production by 1/3, which is 800,000 barrels a day at $60 per barrel or $48M per day that is not being spent ON A FRIGGIN’ SECURITY GUARD! COME ON PEOPLE - THIS IS A TOTAL SCAM AND WE FALL FOR IT EVERY 1.4 DAYS!

Only by distracting you with non-stop fear and terror from Iraq, Iran, Nigeria, Hurricanes, etc. can the oil criminals get away with charging you four times more for the same amount of gas (within 3%) that we consumed when gas was under $1 per gallon.

Anyway, that’s more of a weekend topic, but it’s a holiday and you’ll be sending Exxon Mobil Corp. (XOM) almost $10 in operating income every time you fill up your tank. So I figure it’s good to have something to think about - this is another topic you can forward to your Congressmen (including state and local) in our continuing series aimed at putting a stop to this nonsense.

Keep in mind that CNBC Fast Money’s" Eric Bolling and other energy traders are licking their chops to get into the $400B water business, just another place where they can squeeze the life out of you by taking over a vital resource and then creating a series of "crises" to triple their profits.

 

Buy-sell hi;
If refineries are ''criminal,'' what do you call a group that makes more profit on a gallon of gas than them?????????????
I mean besides the US gov tax, which ecexceeds private sector profit?????????????????

 

It's all relative, I guess, Murray.

What I am confident of, is that there is a reasonable prospect that refinery companies are intentionally neglecting expenditures on maintenance and production, in favor of stock buybacks and higher dividend payments to their shareholders, in order to intentionally constrain the supply of refined gasoline, thus spiking prices.

Is it unreasonable to expect corporations to not intentionally constrain supply through such concerted efforts?

Didn't Enron essentially do a very similar thing the California electricity consumers a few years back?

And would OPEC be allowed to operate on U.S. soil given U.S. price fixing laws?

I also happen to agree with you that the government is complicit with this as state and federal taxes on gasoline are a major revenue source.

 

Two things. When OPEC originated back in the 70's it stood for Organization of Petroleum Exporting Countries. There was a joke going around that the countries that used petroloeum were known as "Organization of Fuel Using Countries" or OFUC for the acronym.

Now to the subject of water.

as i am getting older i notice things that are changing. one thing i noticed is that potable water is becoming an issue. what made me notice this was a few things;

first, we are having to control our water usuage more now than i can ever remember. the police and fire departments are watching for people watering their lawns on the wrong day!

second...i was driving past a goverment road construction area and a water truck was putting water on the surface...on the side of the truck it stated "non potable"...i have not seen that since my days in combat.

Also the county where i live use to use chlorine in the water, now they use a base mineral. I'm sure this is more to keep the pipes in working order longer and limit corrosion breaks.

all of this got me to thinking that water may be a problem that few are really noticing or believing. especially since in the us we have what could be termed an enormous supply of potable water where other countries do not. so i did a search on ET for possible long canditates (even penny stocks), came across the PHO which i understand is an etf from the amex. looked at the chart for a long position and instead found what may be a short term short position.

by the way...still interested in any water plays, even penny stocks. if you know of anything worthwhile please let me know.

 

??..............OTC:MSEX??