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Originally Posted by djnemo65
See, the profit margin isn't good at all, because greater refinement capacity lowers the market price of oil. So logically companies don't want to invest millions in unpopular facilities that DEVALUE THEIR PRODUCT! Makes sense.
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no it doesn't... first off, non oil companies can make refineries. More refineries means higher demand for crude oil, and a higher supply of processed fuels.
Since a refinery deals with processed fuels, and doesn't necessarily have anything to do with the extraction of oil (beyond buying it at market price) they wouldn't be devauling their own product anymore than any other commodity in existance (like, say corn, steel, or aspirin). As long as you can get the efficiencies to work so you make a profit after costs, there's no problem.
By your example we'd only have 2 corn farms in america so they could charge 20$ an ear, but guess what? that'd make absolutely no sense.
09-02-2005, 02:57 PM
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