Held hostage to the oil monopolies

This is what happens when you don’t have true competition: https://www.msn.com/en-us/money/markets/gas-prices-surge-aga…

It is no different than the situation with certain food items when you have companies like ADM and Monsanto that control a majority of the corn and grain crops.


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ADM has plenty of competitors in grain trading. Bunge and Cargill to name two.

Monsanto was sold to Bayer. Is the leader in the seed business but has competitors. Corteva spun off from Dupont. And Syngenta owned by the Chinese but likely to go public soon. Meanwhile FMC became a bigger player when they bought part of Duponts ag business when they merged with Dow Chemical.

Smaller refineries have been shut down left and right.

The pandemic wasn’t kind to them. Very low prices 2 years ago and very low margins.

Add on top of that the green demands for ‘reduced pollution’ and one by one, the smaller refineries went out of business. Dozens of them.

Refining takes now billions of investments. Old plants are upgraded and capacity increased but there’s a limit.

Yeah, right now that’s the bottle neck and contributing to higher prices with the higher demand.

However at the same time, Natural Gas is up by 3x from 2 years ago…that caused by the ‘worldwide price’ and lots of exports going overseas spiking demand and ever increasing demand from power plants now run on NG instead of coal.

Oil/gas prices will continue to rise. Even as EV penetration increases.

The rest of the world other than EU and China aren’t going to be rushing for high dollar EVs. A billion IC engines will still be around in 10 years


This is what happens when you don’t have true competition…

Hmmm. Perhaps an indication to look into refinery company stocks such as MPC, VLO, HFC and PSX. Their one-year charts certainly look good.


The people who invest in oil stocks seem unsophisticated.

Refining stocks like Valero are supposed to go up and down with crack spread. Instead they go up and down with oil prices, just like oil stocks. So just another oil stock.

We have discussed Valero on these boards in some detail over the years. Their refineries are equipped to process difficult oil grades that many refineries can’t process. They get a better margin because they buy their oil at a discount. But investors seem not to notice.

That’s why I see energy crises, when the market sector is down but Valero as a business excels, as a great buying opportunity.

Who thinks noticing what other investors do not is often makes Fools Foolish…

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