As the price of oil slowly goes down (86.20 a barrel) and the price of

[demosincebirth]

gasoline goes up ($3.57 in the Bay Area), what gives? Something is not right and I haven't heard a reason for it. Maybe its just plain ol' greed.

[Orrex]

1. It's a simple equation, really.

When oil prices go up, gas prices go up.

When oil prices go down, gas prices go up.

When oil prices stay the same, gas prices go up.


Any questions?

[orleans]

2. oil speculators. they did it before, they're doing it again.

why the fuck isn't this type of thing banned? a small group of fuckers gamble and the country pays the price. again.

http://www.mcclatchydc.com/2010/12/08/104979/remember-4-gasoline-oil-speculators.html

google
oil speculation 2011
oil speculators are back
oil speculation
oil speculator

i first heard about this dirty little secret two or three years ago on randi rhodes' show.

[demosincebirth]

3. Oil is not @ 90 bucks a barrel. It went up .03 cents today to 86.22, I don't

understand it. Those fuckers that do that shit and make it hard for poor folk and average workers have no soul. I'm totally with you on this. Its a shame. I wonder how they sleep at night?

[eyepaddle]

4. It mostly likely has to do with hw the West Coast is a separate market from the rest of the US.

I haven't checked the location of the $86 dollar crude--but it is almost certainly the NYMEX stuff in Cushing Oklahoma.

Effectively there are no pipelines that cross the Rockies so the West Coast is bascially on its own in terms of petroleum supply (I've been out of the business for a decade, so they might have built one in that time, but I don't think so)

While CA and AK supply quite a bit of Crude to the West coast PADD 5 (Petroleum Area Defense District 5--a gov't holdover term from WWII) and CA has a LOT of refining capacity, the area is a huge consumer and gasloine supplies may be a little short--and if they are short there is no way to bring in other products easily. It needs to go into small tankers that fit through the Panama Canal, or perhaps in extremis by train.

Another factor may be how near SF is to a refinery; here in MN we are about as far away from an oil seaport as is easy to manage, yet gasoline is consistently less expensive than the national average, there are a few factors at work. We are close to North Dakota's Williston basin oil--we are the closest major population cneter to Canadian Oil Sands' oil (and connected via pipeline) and the refiniries are here in the metro. This means that we have first crack at a less desirable crude (therefore cheaper), a large refining capacity (relative to local population) means abundant supplies, and there proximity to the main twin Cities Market means short truck hauls and less ca$h spent on transport.


While I hate the oil biz with a fiery passion (I worked for those soulless bastards and was ground into a pulp by them) there is very rarely any real skullduggery going becasue they just don't need to do it. We are that hooked and use that much of their product anyhow.

[demosincebirth]

5. You know what? We have five major refineries within 30 miles of the Bay Area and still

pay the highest prices in the country. Something is fucking wrong here. No one here has an answer. All I hear is "that's the way the market goes...supply and demand." That's a bunch of BS

[eyepaddle]

6. Sorry for the late reply--I don't really have internet over the weekend

But I've done a bit of checking, and my thoughts are that first off, California has a VERY tight balance between refining capacity and population--with about 10% of national poulation, and 10% refining capacity--and is pretty much completely average in use of transportation fuels.

You may have to open the tabs to see the numbers--but look at the "Overview" "Reserves and Production" and "Consumption" tabs specifically to see the numbers.

http://www.eia.doe.gov/state/state-energy-profiles-data.cfm?sid=CA

This means that it can supply itself adequately--as long as everything is working and running. Right now it looks as though one or more of CA's refineries is doing maintenance and the state is drawing down its stocks of finished gasoline. Most refineries do their maintenance cycles in the Winter so that they can go balls out to meet our summer demand spikes.


Coupled with CA's own unique and stringent formulation requirements (not many places can make gasoline to sell in California--even if there were a way to get it there you wind up living with a tight balance of supply.

Please notice how CA's current stock of gasoline is less than half what WA has--or even MN for that matter. It is also half what it was this summer. (Gramted--these numbers are from November, so I'd suspect that we are either at the bottom of the trough right now, or quite possibly on the way back to building inventories.

http://www.eia.gov/dnav/pet/pet_stoc_st_a_EPM0F_STR_mbbl_m.htm

[meegbear]

7. By some odd happenstance, NPR ran a story about it this very morning ...

Why Is Gas Cheaper In Midwest? Thank Canada