$4 BILLION REFINERY UNDER CONSTRUCTION

MENAFN - Middle East North Africa . Financial Network News: UAE building $4 billion refinery

The number of new refineries continues to climb. This latest one is a large one. It will be built in the United Arab Emirates.

Again, it will take time for the new refineries to come on line but investors should remember that the stock market invests in the future. Stocks values are based on what they will earn over the next 10 years and has little to do with what they earned the last 10 years.

When capacity catches up with demand, margins go down. Today, crude and gasoline prices dropped again. Demand declined about 3.2% from the prior year. Prices are set by the last gallon to be purchased. Crude at $55 per barrel could be very exciting.

Much is being said about oil politics:

According to the Los Angeles Times, there are 148 oil refineries in the US today compared to 324 in 1981. Since then, overproduction of gasoline, oil company mergers, and environmental rules have forced smaller operations out of business(The Week, October 14, 2005, Vol 5, Iss 229, pp 20.)
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