All right so you are mad a BP so why not go out and try to cut into their profits buy not buying their gasoline. Well it sounds good, but the problem is that if you want to get back at BP that is not the way to do it. The truth is BP is not in the retail gas business and the other truth is all you will hurt by boycotting them is the people that have nothing to do with the spill. A BP boycott is an exercise in futility.
People are angry and they want to lash out but a boycott won't hurt BP. The owners of BP gas stations just bought the brand name and are in many cases hard working taxpaying citizens that are basically trying to make a living in a business where profit margins are already thin and rely heavily on the sale of cold drinks, coffee and hot dogs. They too are the victims of BP’s errors and are probably even angrier at BP than you are. Boycotting BP branded service stations to get back at and hurt BP will have about the same impact on BP as if you decided to boycott Dunkin Donuts or McDonalds or CNBC. On second thought, maybe boycotting CNBC might be a good way to express your anger. You know keeping things like that bottled up like that might not be good for your health. And of course watching the Fox Business Network is a good way to feel better.
Back in 2007 BP sold all of its U.S. convenience retail units of its company-owned and company-operated convenience stores. The majority of sites were sold to franchisees and some to dealers and large distributors (jobbers). While the franchises are required to market BP fuels for at least 20 years after they've bought the franchise, BP has the right to sell their fuels to anyone they want. So if the franchises do not buy the fuel, the fuel will be sold to other outlets and you may indeed be buying BP gas from? Exxon Mobil or others? There are those that are even actually calling on the government to just seize BP and take them over. Yes, don’t let that rule of law thing or the Constitution of the U.S. get in the way. Vladimir Putin would be very proud. This innocent until proven guilty idea really gets in the way of a good lynch mob.
The BP spill caused a rally in oil. Well not the spill but the fact that as reported by Bloomberg News, “Oil and gas producers seeking to drill in Gulf of Mexico waters less than 500 feet deep must resubmit plans to comply with new safety and environmental requirements, the U.S. Interior Department said.” Bloomberg says, “The Obama administration is “pulling back” exploration plans and requiring updated information to “ensure that new safety standards and risk considerations are incorporated.” While the decision extends a pause on drilling to shallow waters as permits are resubmitted, Obama administration officials said today that such operations aren’t covered by the six-month moratorium placed on deepwater drilling like the BP Plc well that exploded on April 20 in the Gulf of Mexico “Shallow-water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary Salazar outlined in his report to the president and have exploration plans that meet those requirements,” Interior Department spokeswoman Kendra Barkoff said today in an e-mailed statement. “There is no moratorium on shallow-water drilling.” Still the reports spooked oil traders that drove the market higher after the market was trying to put the bullish Energy Information Agency report in perspective.
The Energy Information Agency reported that crude oil inventories fell by 1.9 million barrels from the previous week. At Cushing, Oklahoma crude supplies actually increased taking away from some of the bearishness of draw. Add to that the fact that gasoline supply fell by a larger than expected 2.6 million barrels last week. That put supply at a five-month low and is above the upper limit of the average range for this time of year. The EIA said that as for demand the total products supplied over the last four-week period has averaged 19.7 million barrels per day, up by 8.1% compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged 9.1 million barrels per day, up by 0.5% from the same period last year. Distillate fuel demand has averaged 4.0 million barrels per day over the last four weeks, up by 17.1% from the same period last year. Jet fuel demand is 8.1% higher over the last four weeks compared to the same four-week period last year. Those numbers are good and show some good underlying economic strength.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org