Oil, $91.15 per barrel,get it while its hot!

[Nwbie]

Oil price isn't the problem right now. 25% of the refineries in the US still have no power thanks to the hurricane.

Finally... someone who understands why gas prices are high....

[CAP1]

Oil price isn't the problem right now. 25% of the refineries in the US still have no power thanks to the hurricane.

I TALKED To a friend in texas that said otherwise? are they really down?

[Nwbie]

I TALKED To a friend in texas that said otherwise? are they really down?

It is not just that the refineries are down..it is that refineries in place today...even if all of them were running at full capacity..still do not keep up with american consumption needs..price of gas will remain high compared to oil prices because of that
even though..with all the subsidies from the government..american consumers still pay less for gas then most of the non oil producing nations.

[Nashwan]

The US west coast petroleum market is fairly separate from the rest of the US. There, prices have continued to fall, from an average of $4.46 a gallon to $3.77 now.

The rest of the US has been hit by the major shutdowns from Ike and Gustav. That's reduced production be a large amount, and led to shortages. Because the hurricanes did very little damage, production should be back in full swing shortly, and the price will fall.

ALSO REMEMBER everyone in other related threads stating that once oil was below $100/barrel, that gas would also drop to the $2.50 range again?

That's a bit over optimistic. At $100 dollars a barrel, the crude oil alone for a gallon of gasoline costs about $2.40. Federal taxes add 18c, state taxes an average of 30c or so. That's up to nearly $2.90 with paying the refiners, distributors or retailers.

The last time oil was under $100 a barrel was the first week of April. The average price for gasoline in the US then was $3.33

I TALKED To a friend in texas that said otherwise? are they really down?

From the DOE:

At the peak of preparations for Hurricane Gustav and later for Hurricane Ike, almost all U.S. Gulf of Mexico crude production was shut-in – 1.3 million barrels per day. Fifteen refineries were reported closed in Texas and Louisiana, equivalent to 3.9 million barrels per day of capacity – 22 percent of total U.S. capacity or 46 percent of Petroleum Administration for Defense District (PADD) 3 capacity. Another nine refineries reduced their crude oil throughput. As of Wednesday morning (September 17), shut-in Gulf of Mexico crude production remained at 1.3 million barrels per day while 12 refineries remained closed and 9 refineries were reducing runs.

It is not just that the refineries are down..it is that refineries in place today...even if all of them were running at full capacity..still do not keep up with american consumption needs..price of gas will remain high compared to oil prices because of that

No. Refineries have been running at reduced capacity all year because the US gasoline market is so weak. The refineries have been making very little, if any, profit on gasoline because competition is so intense. US gasoline is actually cheap compared to the oil price. You can see that in refiners margins. 2000 - 2007 refinery margins averaged 16% ie 16% of the cost of a gallon was made up of money paid to the refiners. To the end of August this year refinery margins have been just under 8%.

As the DOE point out:

U.S. refinery capacity utilization has been low this year, in large part due to falling petroleum demand. Consequently, refineries not affected by the hurricanes have some room to ramp up and help fill the product gap

There have been times in the past, notably spring 2007, when US gasoline prices were high because of refinery shortages. That hasn't been the case this year, apart from the last week's price rises due to Ike and Gustav.

[CAP1]

The US west coast petroleum market is fairly separate from the rest of the US. There, prices have continued to fall, from an average of $4.46 a gallon to $3.77 now.

The rest of the US has been hit by the major shutdowns from Ike and Gustav. That's reduced production be a large amount, and led to shortages. Because the hurricanes did very little damage, production should be back in full swing shortly, and the price will fall.

That's a bit over optimistic. At $100 dollars a barrel, the crude oil alone for a gallon of gasoline costs about $2.40. Federal taxes add 18c, state taxes an average of 30c or so. That's up to nearly $2.90 with paying the refiners, distributors or retailers.

The last time oil was under $100 a barrel was the first week of April. The average price for gasoline in the US then was $3.33

From the DOE:

No. Refineries have been running at reduced capacity all year because the US gasoline market is so weak. The refineries have been making very little, if any, profit on gasoline because competition is so intense. US gasoline is actually cheap compared to the oil price. You can see that in refiners margins. 2000 - 2007 refinery margins averaged 16% ie 16% of the cost of a gallon was made up of money paid to the refiners. To the end of August this year refinery margins have been just under 8%.

As the DOE point out:
There have been times in the past, notably spring 2007, when US gasoline prices were high because of refinery shortages. That hasn't been the case this year, apart from the last week's price rises due to Ike and Gustav.

new jersey has it's own refineries. how much of the country do they provide to?

[Nashwan]

new jersey has it's own refineries. how much of the country do they provide to?

In normal times it makes sense to supply from the closest refinery. When the closest refineries are all shut down, like in SW now, it makes sense to sell gasoline produced in NJ in Texas.

The only market that's largely separate is the west coast, thanks to California's different regulations as well as geography.

[Kaw1000]

Excuses excuses...say what you want, but we are getting bent over.
If its not the hurricanes,its that we don't have enough refineries, or
a ship sunk and we lost a bunch of oil,or the Russians took over and oil line,or
a pipe line got blow up by terrorist, or someone peed on a electric wire and shut
down a refinery.  get the point??

[Nashwan]

Partly that's because the supply situation has been very tight for the last few years. There simply hasn't been enough oil, so any disruption to supply has caused the price to go higher.

But what do you expect in the current situation? Over 20% of US refinery capacity has been shut down due to two hurricanes. That's going to lead to a price hike.

Will you be here complaining next week when the price falls? The week after?

There is a simple way to smooth out price increases due to temporary disruptions, though. A diesel and gasoline reserve stockpile wouldn't cost very much, and could be used when there are large scale refinery shut downs. Why not ask your politicians to require emergency stockpiles?

[Kaw1000]

No I will not be complaining...I will be happy because the price of gas will fall along with the
price of oil....Thank you

[CAP1]

Partly that's because the supply situation has been very tight for the last few years. There simply hasn't been enough oil, so any disruption to supply has caused the price to go higher.

But what do you expect in the current situation? Over 20% of US refinery capacity has been shut down due to two hurricanes. That's going to lead to a price hike.

Will you be here complaining next week when the price falls? The week after?

There is a simple way to smooth out price increases due to temporary disruptions, though. A diesel and gasoline reserve stockpile wouldn't cost very much, and could be used when there are large scale refinery shut downs. Why not ask your politicians to require emergency stockpiles?

they've tried to tell us there wasn't enough oil before. it was a lie then and it is a lie now.
they try to say there isn't the refining capacity. then build totally tubular refineries. put some of their profit back into their business. hell, i'm 1/2 way to being able to buy my own airplane, but i'm dumping that money into my business instead. they need to do the same. they knew 50 years ago that the demand was going to keep rising. did they think that the few refineries they had would majickly produce more gas from the oil?

kaw has it right.....they use any excuse they can latch onto.

[CAP1]

Will you be here complaining next week when the price falls? The week after?

There is a simple way to smooth out price increases due to temporary disruptions, though. A diesel and gasoline reserve stockpile wouldn't cost very much, and could be used when there are large scale refinery shut downs. Why not ask your politicians to require emergency stockpiles?

yes, because the price jumped BEFORE the hurricanes hit. and it jumped a LOT. the price takes forever to come back down, and never comes back to where it should be.

we DO have an emergency stockpile i think.

[indy007]

I TALKED To a friend in texas that said otherwise? are they really down?

East Houston is a wreck. The ship channel is closed with 40+ super tankers anchored off shore. It'll be closed for awhile. Galveston is uninhabitable. All of the refineries are to the east of Houston, and they took the worst of the storm. Beaumont's grid was 98% down as of yesterday and not expected back up for 3 or so weeks.

[CAP1]

No I will not be complaining...I will be happy because the price of gas will fall along with the
price of oil....Thank you

oil dropped from in the 130's to less than 100. yet gas went from 3.17 here to 3.49. i don't want to hear the hurrican bs either as there's refienries in nj....and as the oil companies wouldn't be so "overtasked" if they had put some money back into their business and built more.
 it's like the govt......poorly managed, they run low, tso they charge us more.

[Nashwan]

oil dropped from in the 130's to less than 100. yet gas went from 3.17 here to 3.49.

Where had gasoline at $3.17 in early June? The cheapest I can see is Minnesota and that was over $3.60.

i don't want to hear the hurrican bs either as there's refienries in nj

And they can supply Texas when there's a shortage. There's a shortage in the SW now, and they are buying gasoline from wherever they can get it to make up the shortfall. That means some gasoline is going from NJ to the sw, and that means NJ is short as well.

and as the oil companies wouldn't be so "overtasked" if they had put some money back into their business and built more.

Of course they would. New refineries shut down in a hurricane just like old ones. They could avoid the problem by building a lot more all over the US, and keeping a large amount of spare capacity. But that increases costs, and if the refiners have increased costs they will pass them on to their customers. That means higher gasoline prices.

The answer to short term supply disruptions is a stockpile, not excess long term capacity.

yes, because the price jumped BEFORE the hurricanes hit. and it jumped a LOT.

No, it didn't. I think you are a victim of your own misconceptions.

US gasoline prices per week, according to the DOE:

July
week 1 - $4.11
week 2 - $4.11
week 3 - $4.06
week 4 - $3.96

August
week 1 - $3.88
week 2 - $3.81
week 3 - $3.74
week 4 - $3.69

September
week 1 - $3.68
week 2 - $3.65
week 3 - $3.84

According to gasbuddy.com

we DO have an emergency stockpile i think.

The US has a crude oil reserve. That's not much use when the problem is refinery shutdowns.

they've tried to tell us there wasn't enough oil before. it was a lie then and it is a lie now.

Oil production remained flat between 2005 and 2007, at the same time as the world economy boomed. That's what led to the price increases. There is most certainly a shortage of oil production.

they try to say there isn't the refining capacity. then build totally tubular refineries.

There isn't a refinery shortage. There was following Katrina, and that affected repair cycles and caused shortages for a long time. There isn't any more. There are temporary disruptions due to weather, but the answer to those is stockpiling, not excess capacity.

they knew 50 years ago that the demand was going to keep rising. did they think that the few refineries they had would majickly produce more gas from the oil?

No. That's why they've been expanding refinery capacity. US refinery capacity has grown by about 1.5 million barrels a day over the last decade.

Why do you want more refineries? Don't you realise you'll have to pay for them? Maintaining excess capacity costs a lot of money, and will lead to higher gasoline prices.

[Reschke]

The other answer to high fuel costs is eliminating all the different "blends" of fuel for different states and metro areas within those states. If they would mandate one type of fuel for all areas and quit putting a "blend" for this area and another for that city/metro area then you would see the cost of fuel drop considerably as well.