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Originally posted by BettorsChat
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Not following you here, could you please expound? Oh yeah, thanks for all on commenting on this subject as it is hot and a fun discussion! -
How come the price of gasoline is rising while the price per barrel of oil is falling?Originally posted by KJ1000Comment
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I'm saying that they gas companies sell the gas for what they want. Meaning they set the profit margin just like the gas stations. Gas goes up in the summer, because more driving thus more $ for gas companies.Originally posted by KJ1000Comment
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Barrel is crude oil. Must go through the refinery process. Thus, the whole lack of refineries, etc...Originally posted by kbsooner21
Next question...NFL Kruise
2-2*
*updated as of 9/9Comment
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Originally posted by tkim11
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There is a time lag in terms of the barrel of oil making it to the gallon of gas. Remember that there are huge inventories of oil on hand and the current price on the market is for the latest barrel of oil; thus, the lag in movement of price...Originally posted by kbsooner21Comment
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Sort of...of course we are here to make money, like everyone else...there is a margin tied to our rack price and we have every right to that profit considering the amount of capital tied to making the commodity...but you would be surprised at the profit margins on refined products, which are fairly thin...the end market is less in favor as evidenced with most (not all) majors moving out of retail sales...my company has less than 500 company owned outlets...it is part of the business that has too much headache and it can be run more efficient by smaller members...Originally posted by BettorsChat
Gas goes up in summer due to supply/demand...demand goes up driving down inventory...refinery churn out inventory as fast as they can but there is only so much built up...you have to remember that during winter, refineries make heating oil and then have to re-engineer to make more gasoline...the refinery process is crazy complex and not as easy as flipping a switch to move from heating oil to gasoline...this is done with turnarounds...most turnarounds actually occur in spring/fall, not summer as someone else mentioned earlier...mind you, these are planned turnarounds...there are tons of unplanned turnarounds...
In addition to profit margin, remember the stringent requirements of gas...the US has over 12 different "boutique" requirements of gas across the US...yes, that is 12 different refined products of gasoline...i am talking about the chemical composition of the gasoline and the grade...for example, there is a pipeline that links the gulf coast to chicago through st. louis...however, st. louis has a different requirement of gas than chicago than the rest of the US...so, on one pipeline, the same product must be reformulated at the individual racks in St. louis and chicago...again, this is capital intensive...in addition, the refineries in chicago make gas specific to that region and can often not be used in different regions....in all honesty, this is silly...imo, the US government should have 2 types of gasoline...normal and very stringent...this would solve all the problems of various grades of gasoline across the US...point in case is nutty Cali, which has a gas shortage, yet they want no refineries...Phoenix makes plenty of gas and is tied via pipeline to LA, but the gas requirements are different so they can not be used in Cali without major modifications...truly stupid policy....
All this helps to increase the cost of gas...I realize I am one sided here as i work for the "evil empire"; however, I am trying to give out facts and angles that some don't think about...does this help?...any value here?...or do you guys just think I am off base?Comment
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NICE....your answers are more simple and to the point...I am electing you chairman of this thread now...Originally posted by tkim11
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