Gas Not Dropping Below $1.50 Until Nov.

Reuters ^ | 09-08-03

[Poohbah]

We haven't built a refinery in the US since 1968.

Of course, we can continuously run refineries at their redline production rates forever, without any hiccups, right?

[appalachian_dweller]

>> Note the crude price drops while the National avg. continues to rise. <<

Yea I see that. Looks like gouging to me.

Parallel universe time: Wouldn't it be great if everyone stopped buying gas for one week? I wonder what the gas companies would do?

[oceanview]

then there should be supply problems, there aren't any. there was plenty of gas for everyone during the late summer boom, and AAA reports miles driven at all time highs. So where is the shortage due to lack of refined material? this idea that oil companies force a price increase to cut down on demand because they don't have enough product is not true, demand was higher then ever, who wasn't able to get gasoline that wanted it?

[Poohbah]

Crude oil supply isn't the only issue controlling gasoline prices.

Refinery capacity has a HUGH and VEY SERIES impact on price. And we have added ZERO refinery capacity in this country since 1968. Nobody wants a smelly, icky, ugly refinery anywhere near them...but they sure as **** want cheap gasoline.

[oceanview]

they would complain that they didn't have enough storage capacity for the stuff, and somehow the price would rise so they could afford to buy more tanks.

[BSunday]

Naw, I've been stationed in Norfolk pretty much my whole career (16 yrs and counting....counting big time, that is). I just hear the wild stories about Westpacs every so often.

[Poohbah]

then there should be supply problems, there aren't any.

Because price serves as a rationing mechanism. We simply bought gasoline on the world spot market.

When you demand a zillion gallons of gasoline for immediate delivery, you're going to get soaked.

there was plenty of gas for everyone during the late summer boom, and AAA reports miles driven at all time highs.

Uh-huh. We imported a bunch of gasoline from offshore refinieries, and we paid through the nose for it.

So where is the shortage due to lack of refined material?

It was overcome through the marketplace. The result was that we all paid higher prices.

this idea that oil companies force a price increase to cut down on demand because they don't have enough product is not true, demand was higher then ever, who wasn't able to get gasoline that wanted it?

People unwilling to pay the higher price, that's who.

Also, note that you can't just use any old formulation, anywhere, at any time these days. There's something like 34 different formulations of 87-octane unleaded mandated by the Nanny State of Californication. Pretty soon, the Nanny State will tell everyone to use their local winter formula. And that means that leftover "summer blend" gas will either be left to rot (gasoline DOES rot) or sold overseas (if anyone will take that particular formulation).

[Chemist_Geek]

We haven't built a refinery in the US since 1968.

Not just that, but they've torn down a refinery near me a few years ago. "Those refineries are ugly smelly things. We can't have that in our back yard! And anyway, the Evil Big Oil companies are gouging us for gas."

[meyer]

We haven't built a refinery in the US since 1968.

I occasionally remind my envormentalist brother if this when he verbally assaults my choice of vehicle. This country's energy infrastructure is reaching the breaking point.

[slimer]

Gas Not Dropping Below $1.50 Until Nov.

$1.50??? How about $2.10 in San Diego.

[Dog Gone]

And we have added ZERO refinery capacity in this country since 1968.

We haven't built a new refinery, but I'm pretty certain there have been some expansions of existing plants.

We are, however, to the point where we have to import refined gasoline, especially during the summer driving season.

[truenospinzone]

That's interesting, considering I've been paying $1.49 for over a week now.

Well, I've been paying $1.67 for the past two weeks. So, the two of us pay a national monthly average of over $1.50.

[Gringo1]

1.36 this morning in Gwinnett county Georgia

[Patangeles]

Uh-huh. We imported a bunch of gasoline from offshore refinieries, and we paid through the nose for it.

If the companies weren't in cahoots with each other, the ones who had more supply on hand would have underbid the others to capture market share. I guess oil companies don't work like airlines, telephone companies, etc. Why is that?

[solo gringo]

Went to Mississippi for the holiday and on the way there gas was 1.63 to 1.65 going.On the way back two days later gas was 1.49 to 1.51 at the same stations.I think there was some hanky panky takeing place.I ask one of the station people and they said they had a couple of slow days so they dropped the price.

[Poohbah]

If the companies weren't in cahoots with each other, the ones who had more supply on hand would have underbid the others to capture market share.

Actually, the problem is that we had to buy a bunch more gasoline than previously estimated, and we needed it delivered right way.

It doesn't matter what the commodity is, if you order a lot of it for delivery on very short notice, it will cost you more than if you order a lot for delivery in several months.

I guess oil companies don't work like airlines, telephone companies, etc. Why is that?

The airlines and telephone companies suffer from overcapacity. The refinery sector suffers from having barely enough capacity for routine operations inside the United States, IF nothing goes wrong.

[Patangeles]

Good reply. But do any companies have their own refineries? It would seem advantageous to some companies to have their own refineries, so they can capitalize on sporatic short supplies. They could reward their loyal customer base with slightly lower prices. Why aren't there ever gasoline advertisements in local papers to woo customers to their stations?

In my area, gas prices are based on ability to pay. In poorer areas, like mine, gas is always the cheapest, $1.87 today. In more affluent areas, it's more expensive, like $195, or a bit more.

Tip: Buy gas in poorer areas!

[MD_Willington_1976]

In Pullman WA
87 octane = $1.999
92 octane = $2.109

[Poohbah]

Good reply. But do any companies have their own refineries?

They all do. But we haven't built a new refinery in this country since 1968, and we've torn down a bunch, because they're icky, they stink, and they're ugly, so no one wants one in his back yard...but everyone still expects cheap gasoline as some sort of birthright.

California is the worst of the bunch in this regard. We don't want to build more nuclear power plants (because they have the word "nuclear" in the name), they don't want to build more oil or coal-fired plants (because they put out icky stuff), they don't want any more hydroelectric dams built (because they make rivers less wild and scenic), and they don't want any more windmills built (because they're "condor cuisinarts")...but they still expect the damn light switch to work, and the bill to be nice and inexpensive.

Refinery capacity growth hasn't kept up with demand growth. So where we used to have a buyer's market, we now have a seller's market--and the buyers are (a) unwilling to make the changes necessary to make it a buyer's market and (b) resent the sellers.

At some point, Californication is going to outlaw "profit" because only "greedy people demand profits."

It would seem advantageous to some companies to have their own refineries, so they can capitalize on sporatic short supplies.

Yeah, well, try actually BUILDING a refinery in this country. No one will let you. EVERYONE will tell you to build it somewhere else. Everyone wants gasoline; no one wants the production facility in their neck of the woods.

[WestPacSailor]

I just hear the wild stories about Westpacs every so often.

They're all true, and some stuff you haven't heard.