Gas

[rpm]

High demand, low production. Does anyone remember the electricity crisis scam ENRON was pulling in Califorinia?

[Fishu]

Californians are buying refined fuel from Finland, because they're lacking the refining capacity
If I recall correctly, there hasn't been built any new refineries since the 70's in the states.

Even so, the price of gas in the states is still less than half of what it costs here.
About 1.25 *euros* per litre, which is about $1.5 per liter, and whatever the liters are in gallons..


I heard that in Venezuela they're getting a liter of gas for about 2 cents.
We're being royally screwed.

[Staga]

I don't mind the price increases; it's good for the producers.
Only commies and liberals would whine about the fuel price. If you cant afford it buy a frigging bicycle.

[TimRas]

Originally posted by weasel4
Why am I paying $2.70 a Gallon for gas....?

Yes, you pay way too little

In Finland, average price just now:
1.28 euros/Litre for 95 octane (=$5.88 a US Gallon)
1.31 euros/Litre for 98 octane (=$6.03 a US Gallon)

When I fill the tank of my car (around 50 litres= 13 gallons), I pay ca. 65 euros (= $ 80).

[beet1e]

Interesting article from the Torygraph this week.

Source: http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2005/08/15/do1502.xml

Do your eyes water as you pour ever larger sums into your petrol tank? Do you alternately curse the Chancellor for taxing it, and the oil companies for making such vast profits at your expense?
   

Calm down, dear, it's only the iron law of supply and demand. Besides, petrol isn't really that expensive. Adjusted for inflation, it's been 90p a litre before - several times, in fact, in 2000, 1986, 1981 and 1974 to be exact. Since then, your income will almost certainly have gone up faster than inflation (since incomes always do, except in times of recession) and the car you drive will have become more frugal, unless, of course, you have traded up to a bigger model.

It may not feel that way as another £50 disappears into your motor, but this is why a rise in the oil price which not so long ago might have caused panic, shortages and recession is making so little impact on our economic wellbeing. Last time the oil price doubled in 18 months, more than 30 years ago, we came within an ace of a return to petrol rationing.

Today, the very idea seems absurd. We may have less to spend in the shops after filling the car, but there is no talk of an oil price shock; since the 1970s, we've learnt to use it more carefully. Economic growth will be pretty modest this year, but we shall still be richer in December than we were in January.

Petrol costs 90p a litre because that is where supply and demand balance. Next week, the balance may be 88p, 92p or even £1, but it will still balance. The point is illustrated by looking at the price of diesel, or derv as Sir Geoffrey Howe used to call it, as he whacked another few shillings on to a gallon when he was chancellor. Diesel is less refined than four-star so, other things being equal, it should be cheaper, even after Gordon Brown scrapped the tax concession it used to enjoy.

Other countries, with more enlightened governments, encourage diesel because a diesel engine is a more efficient way of using the energy locked up in a barrel of oil. So effective has this policy been that diesel is now in short supply worldwide, because refineries cannot be quickly modified to meet the demand.

According to one authoritative survey last week, that shortage is going to get a lot worse over the next decade, unless oil refiners make big investments in extra capacity to meet the rising demand. Yet owners of diesel cars need not worry about being unable to fill their tanks - they may just have to pay a premium to do so.

It's often not appreciated just what a powerful mechanism pricing is; not only does the price send out a signal about the state of the market (in anything) but a rising price chokes off demand while giving the supplier the cash to find more of his product.

A falling price does the opposite. Where this mechanism is absent - the provision of state-funded services is the most obvious example - even the most dedicated bureaucracy cannot provide a decent match to supply and demand.

Government interference is a contributing factor in today's high oil price - not our Government, for a change, but those of countries where the oil is found. Many of them now have agreements with the oil companies which insist on their extracting less oil when the price goes up. This helps the country keep its domestic finances stable, but at a cost of more instability in the market, since it chokes off supply at the higher price, driving it up still further.

With crude at a record $65 a barrel, the oil companies are making profits like never before. They literally have more money than they know what to do with (so we may be sure they will upgrade their refineries to make more diesel just as fast as the environmentalist lobby will let them) and are reduced to giving capital back to the shareholders.

At first sight, this looks like an invitation to the Government to hit them with a windfall tax. In fact, it's supply and demand in action again. The oil price has risen so far and so fast that the world's geologists have never been so popular.

Essentially, they are all employed. Shell, for example, is spending $15 billion a year looking for more black stuff (or for methane, which is almost as valuable) yet it is still returning capital to the company's owners. It argues, sensibly enough, that it's already exploiting every worthwhile project it can find, and that it's not a bank. If it needs capital in a year or five, the market will provide it, provided investors can be confident that the profits won't be confiscated.

As all but the nuttiest Left-wingers have worked out, it makes no sense to steal the shareholders' assets, especially as the bulk of oil company profits are earned overseas. British companies paid out £39 billion in dividends last year, and £5 billion of that came from BP and Shell, so it's not much of an exaggeration to say that one pound in every eight paid to members of UK pension funds came from the industry. We are fortunate that two of the world's top three oil companies are British. It may not save you anything at the pumps, but it's a comfort to know that not all the money you pour down the tank is wasted.

[SirLoin]

Wait till 3 quarter earnings come out..anyone want to bet against record profit$ all around for the big oil companies?

[Nilsen]

Originally posted by SirLoin
Wait till 3 quarter earnings come out..anyone want to bet against record profit$ all around for the big oil companies?

I'm hoping they will.. totally selfish ofcourse but still.

[lazs2]

You guys with diesel cars will be screwed when the new low sulpur laws kick in next year.   Probly a 50% increase to start.

I found myself taking the R75  to the parts store a couple of times to get parts to finish some work on my V8 powered Healey... I will take my 6-13 mpg Big Block el camino to a muscle car show today... maybe even burn off about 50 bucks or so of rubber.

still... my girlfriend is here and that is a lot more expensive than my cars and guns..

lazs

[mora]

Originally posted by lazs2
You guys with diesel cars will be screwed when the new low sulpur laws kick in next year.   Probly a 50% increase to start.

We've had low sulphur diesel for years and there wasn't any notable price increase when the regulations kicked in. Low sulphur diesel is still cheaper to produce than gasoline.

[Nilsen]

Same here mora.

[lazs2]

You sure that you are talking about what the U.S. considers "low sulphur"?   It is very strict.   I don't really know what yu guys start out with either.   I bet your cars don't meet Kalifornia regulations tho... kyoto or not.   Maybe the new ones but not for older cars (73 and newer)

lazs

[beet1e]

We have low sulphur diesel here too. The price has risen - supply/demand. I've seen newspaper articles that cite the expanding economies of China and India as being responsible for the oil price rises as the need for fuel oil in those countries increases.

[mora]

Originally posted by lazs2
You sure that you are talking about what the U.S. considers "low sulphur"?   It is very strict.   I don't really know what yu guys start out with either.   I bet your cars don't meet Kalifornia regulations tho... kyoto or not.   Maybe the new ones but not for older cars (73 and newer)

lazs

There's only traceable amounts sulphur in our diesels(I don't have the numbers, some 50 ppm or there abouts). The California regs are different than ours, but I can't say if they are more or less strict. However there's no magic technology in CA cars that ours don't have. I'm sure a CA car could be tuned to pass euro regs and vice versa.

You are right about the older cars, the catalytic converters became mandatory in 1990. By that time all the cars had electronic injection, so we were saved from the air pump madness. The old CA cars are really a nightmare.

[bj229r]

Originally posted by Charon
1. The raw cost of crude is at record highs. In spite of minor *****ing we still go out of our way to buy SUVs. Prices do not impact demand at this level, no reason to lower prices. Stop buying SUVs and change commuting habits (take the train) decrease demand and prices will drop. We ceased to be a notable oil producing country years ago, and all the new drilling in Alaska ain't gonna change that.

2. Refining capacity is strained at peak periods (summer). No excess capacity around now. Shut down a refinery for a week or have a pipeleine problem and prices skyrocket short term. Building new refineries is a problem environmentally, BUT - the industry has about as many refineries as it needs and about as much capacity as it wants. Overcapacity is not good for the stockholders and it isn't a regulated industry.

3. Just wait until the diesel sulfur regs hit in a 2006 Oh mama!

Charon

I heard a refinery in PA went down a few days, causing most of the recent bump? Havent seen much about it. That being said, can it be assumed that demand in US has increased in last 35 years? There hasn't been a refinery come online since 1971 or so, all the refineries operate at peak this time of year, and it will get worse, as some will have to devote resources to making heating oil quite soon---we dont have enough refining capacity, and its all but impossible to BUILD a refinery in this country--tree-huggers in and out of gov't squash that...we have oil in ground that can increase supply, thus lower price, buit those same people dont want THAT to happen either (ANWAR, and last week, a feweral judge in CA squashed an attempt to expend drilling off coast there.)---We get what we deserve--Left's only response is to quit driving SUV's--IT's my understanding that MOST of the oil consumed in US is to create electricity? If someone could find stats

[beet1e]

Originally posted by lazs2
I will take my 6-13 mpg Big Block el camino to a muscle car show today...  

-would love to see some pics, if you took any.