[eastforker]

Let me add to that. If prices came down wouldn’t demand go up, people would drive more, boat more etc? To the point they wouldn’t have to cut back on production.

[thackney]

If prices came down wouldn’t demand go up, people would drive more, boat more etc? To the point they wouldn’t have to cut back on production.

That is not an immediate demand increase. We would close refineries first.

What you need to realize is the margin on refining gasoline is tight now. Most of the refineries are buying oil at imported price, or buying coastal area domestic production at similar prices. The lower price of West Texas Intermediate to Cushing does not supply that many refineries.

[thackney]

This is the price that gets quoted in the news.

But much oil, domestic and imported, is selling at a higher price. (Note: all are Dec 2011 prices at the end. I don't have more recent data for the ones below, so I wanted to compare apples to apples of high grade oils at the same time frame)

You can look at the WTI bottleneck and the associated price drop and want to do the same with gasoline.

But the reality is, that condition is not going to last. Canada finds out they cannot expand that flow capacity quickly enough in the US, so they start expanding pipelines and export to Asia. Pipelines from Texas Gulf Coast to Cushing are being reversed. I guarantee more oil drilling would be hitting the central part of our if those prices were not depressed, in the Kansas Mississippian limestone for example.