Posted on 02/19/2009 8:50:43 AM PST by rightinthemiddle
The cost of a tank of gasoline has marched higher since the start of the year, defying a continued slide in oil prices and reduced demand.
So what gives?
Industry experts said refiners are trying to reclaim profit margins that disappeared late last year when gasoline prices collapsed after reaching $4 a gallon last summer.
"Refined-product prices were way underpriced relative to the cost of crude oil. The refiners were losing money," said Bryant Gimlin, energy risk manager for Gray Oil, a fuel wholesale marketer based in Fort Lupton.
A gallon of regular unleaded gasoline in the metro area has risen from an average of $1.42 in the first week of January to $1.82 on Wednesday, according to AAA Colorado.
That 28 percent increase contrasts with a 34 percent decline in crude-oil prices from $53.13 a barrel to less than $35 over the same period. Crude oil accounts for about three-quarters of the cost of gasoline.
The rising price of gasoline has cost drivers such as David Todd and his employer extra money.
"It is $10 to $15 more a tank," Todd said while filling up a work van at a station at Alameda Avenue and Broadway. "I wish it would go back to where it was."
Todd, who transports temporary workers to job sites, said he fills up his van two to three times a week and called the increases noticeable in a tight economy.
From about October to mid-December, refiners lost money on every barrel of gasoline they created from crude oil.
In late November, the loss exceeded $7 a barrel. This month, the gross margin for refiners has been as high as $18 a barrel.
(Excerpt) Read more at denverpost.com ...
How much does government intervention and regulation play in to this?
I forgot: Obama’s Fault.
Supply and Demand.
Diesel was forced higher by the expensive to refine ULSD mandate ...
How much is heating oil demands weighing on the total ...
don’t worry about the price of gas...”the one” will be buying it for everyone shortly..(I WISH that was sarcasm)
Because the wholesale cost of crude is only a tiny fraction of the entire expense that goes into gasoline production. With a $.05 to $.10 profit on each gallon, there is very little downward wiggle room if that one piece of the expense pie drops.
The green uber liberals now in charge of the country know that the stupid American bitter clinging sheeple won’t accept “alternative energy” if gas is “cheap”
Expect total silence from the democrats and expect their buddies to make sure gas gets back up to $4 a gallon- or more
Complainers will be labeled as selfish and short sighted
This noose being tightened slowly around our necks is for our own long term good and for the planet, don’cha know
s-a-r-c
Your comment:
“the wholesale cost of crude is only a tiny fraction of the entire expense that goes into gasoline production.”
vs the articles claim:
“Crude oil accounts for about three-quarters of the cost of gasoline.”
What am I missing?
“...crude is only a tiny fraction...”
________
What’s a tiny fraction?
Obama’s administration cancelled 77 oil and gas leases in Utah a couple of weeks back, and they have stated that they are going to review offshore drilling policy on the east and west coasts. That can’t help.
Personally, I’m not complaining.
I’ll take 2.00 a gallon over 4.00 a gallon any day!
Which causes me to ask two questions: First, in what way does their behavior differ from OPEC's? Second, what good would it have done to have additional refinery capacity on line?
The answer to both questions is "None, whatsoever".
Just my opinion, but I think “tiny fraction” overstates it. Is is a large part, but not the whole thing.
What does supply and demand have to do with the difference between oil and gas prices?
If crude is down, gas should be down.
Crude has steadily gone down, but gasoline has steadily gone up.
Industry experts said refiners are trying to reclaim profit margins that disappeared late last year when gasoline prices collapsed after reaching $4 a gallon last summer.
That looks more like collusion among the refiners to me. If GWB were still president, the Democrats would be screaming to high heaven for an explanation.
Yup. The Liberals want gas high no matter what. They could care less about the average joe or the economy.
Liberals use economic issues to advance their SOCIAL agenda.
“...Supply and Demand...”
More like price gouging. The supply is there. The demand is low. That’s why I’m not buying the S&D argument this time around.
I must have missed that!
So the drill here drill now people being told “Oil companies already have plenty of land to drill on” is now a lie?
Personally, I’m not complaining.
I’ll take 2.00 a gallon over 4.00 a gallon any day!
_____
It’s called “conditioning.”
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