The last time oil averaged about $40 a barrel was July 2004 ($40.78).
http://tonto.eia.doe.gov/dnav/pet/hist/rwtcm.htm
The average price for Regular Gasoline was $1.91 a gallon back then.
Posted on 02/11/2009 5:14:52 AM PST by thackney
Facing weaker demand for gasoline, U.S. refiners could be forced to close older plants and may even see the potential to export gasoline to Latin America, the chief executive of Houston’s Marathon Oil Corp. said Tuesday.
But the industry must be careful to keep the U.S. market well-supplied with gasoline, in part to avoid price spikes at the pump, Clarence Cazelot said at the CERAWeek conference.
Refiners must continue to invest in upgrading plants to handle a wider variety of crude oil types and boost output of diesel fuel, which is expected to see higher global demand than gasoline in coming years, Cazelot said. But the least competitive facilities will likely close, he said, comparing the current period to a shakeout in the late 1970s that ultimately cut the number of U.S. refineries in half.
(Excerpt) Read more at chron.com ...
So why is the price at the pump going up as the price for a barrel of oil going down? At the current level of oil prices we should be seeing 1.40 a gal instead of 1.75....
Why do I believe that we will soon see refineries being built across the border, safe from the environmentalists and trial lawyers and unions?
ping
If demand is so weak, why are gasoline futures up 35 cents? Why is gas nearly $2.00 a gallon again?
And with crude expected to be at 39.00 to 41.00 brl?
The last time oil averaged about $40 a barrel was July 2004 ($40.78).
http://tonto.eia.doe.gov/dnav/pet/hist/rwtcm.htm
The average price for Regular Gasoline was $1.91 a gallon back then.
The reason was a correction nobody likes to admit needed to happen. The wholesale price of conventional gasoline was cheaper than the price of crude oil used to make it back in 4th Quarter 2008. They made up the price difference in diesel because of world demand for ULSD as Europe switched to a standard similar to the US. But it was not a position that could last. Relative to crude oil since then, diesel has come down while gasoline has gone up.
For more information and previous discussion:
http://www.freerepublic.com/focus/news/2165580/posts?page=51#51
Refiners are cutting crude runs in almost every market because gasoline demand is down and the sale price doesn’t provide a good return.
Not a lot of people want to believe gasoline was “too cheap” last Oct, Nov & Dec.
But the folks buying diesel will certainly agree it was too expensive then.
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