A Question I Pose Again: (Gas Prices vs. Oil Prices):

[Dinger]

What was the price of gas when prices first hit $100/barrel?

How does that compare to what prices are now, with oil less than $100/barrel?

Seems to me it was less when oil prices were rising to $100/barrel.

Am I wrong?

[Historic NY]

1. gas was 2.81.2 one yr ago yesterday.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=7083579&mesg_id=7083670

[Dinger]

2. Thank You. That Means That Gas Should Be MORE Than $1.00 Less Per Gallon

Yes indeed, we are being robbed, gouged, and financially raped by bu$hco.

[glinda]

3. T Bunn Pickins

Isn't he big gas (bag)? I also just read he was the number two individual funder in swift boating Kerry last time. Can't verify if my info is correct though.

[Imagevision]

4. You're right, gas prices should be much lower but there using Ike for

the reason gas prices have spiked. here in Cape Coral Florida, before Ike $3.56 - after Ike hit not only have gas prices shot right up to $4.99, 4 gas stations in my area are claiming to be out of gas.
Bush & Cheney, first & foremost are oilmen!

[Dinger]

6. Even Before Ike, They Didn't Drop Like They Should Have,

the same as oil did.

[MercutioATC]

5. Answer: Refineries.

We don't have enough refining capacity (especially after Ike) to make enough gasoline to bring the price down.

Imagine cheap wheat and only enough bakeries to make 90% of the bread we need. Regardless of how cheap the wheat gets, there's a bread shortage, so prices go up.

[Sal Minella]

7. Would be nice if Big Oil hadn't colluded on closing down refinery capacity in the '90s.

[upi402]

8. That's it. And a war in Iraq that made oil more scarce, therfore expensive

Like Greg Pallast says,
'war for oil -scarcity'.

[Sal Minella]

9. Brando's line in oil movie: "We're not in the oil business; we're in the oil shortage business."

Brando was the CEO of the company, educating the new guy, who (foolishly) thought his job was to supply civilization with oil products.

(Think it was The Formula, 1980)

[ThomWV]

10. To be factual they didn't. They reduced the number of refineries, but refining capacity went up

Don't confuse the two. The total number of refineries has gone down but the refining capacity grew. I don't think there is any room for capacity to grow any more without new refineries and in fact they are being built in the mid-east even as we speak - just not in this country. You want one in your town?

[ProfessorGAC]

11. Too Late For Me, Thom

There's one only about 8 miles from my house. Of course, i sort of live near the middle of nowhere and the refinery is also just a little left of the middle of nowhere.

The Professor

[kristopher]

12. Don't you think that needs some clarification?

There were 24 refineries closed in the late 90s but, as you say, there was a 1-2% overall increase in refining capacity achieved by expansion of existing plants. That misses the point which is that the shut downs removed 830,000 barrels/day of capacity from the system and made the marginal price of fuel much more subject to what would otherwise be minor supply disruptions.

So the proper way to phrase this is that they REDUCED SURPLUS REFINING CAPACITY.

Also, just to put this into the proper context, the draw-down in refining capacity didn't start in the 90s, it started in the 70s under Carter when they repealed a national energy security law mandating excess refining capacity.


“As observed over the last few years and as projected well into the future, the most critical
factor facing the refining industry on the West Coast is the surplus refining capacity, and the
surplus gasoline production capacity. The same situation exists for the entire U.S. refining
industry. Supply significantly exceeds demand year-round. This results in very poor refinery
margins, and very poor refinery financial results. Significant events need to occur to assist
in reducing supplies and/or increasing the demand for gasoline.”
Internal Texaco document, March 7, 1996

A senior energy analyst at the recent API (American Petroleum Institute) convention
warned that if the U.S. petroleum industry doesn’t reduce its refining capacity, it will never
see any substantial increase in refining margins…However, refining utilization has been
rising, sustaining high levels of operations, thereby keeping prices low.”
Internal Chevron document, November 30, 1995

http://wyden.senate.gov/issues/wyden_oil_report.pdf.

[Sal Minella]

13. Thanks for posting this. I've seen the PDFs of the internal "curtail production" documents but had

no idea how to find them again.

Supply significantly exceeds demand year-round. ... Significant events need to occur to assist in reducing supplies

The idea that refinery capacity is limited because of NIMBY is absurd. Refinery capacity is limited because that's the way the Big Oil boys want it.

Price per barrel was the excuse for awhile, and now "impaired refinery capacity" is the excuse, after Big Oil deliberately colluded to engineer artificial shortages to increase profits.

fap.