Oil, Gas Prices Drop on Bush Supply Move

AP ^ | 4-25-06 | AP

[Alberta's Child]

The cost of raw crude might be relatively low, but there's a very important point to note here. The cost of refining is a major component of the price, and refining costs have increased dramatically in recent years as the U.S. has imported more and more oil from places like Canada and Mexico. This oil is not the light crude that is ideal for refining into gasoline, so it takes a lot more effort to make gasoline out of the heavier crude.

[COEXERJ145]

Expect it, especially from Shermy.

Bush bashing and blatant lies about the President are his standard M.O.

[EagleUSA]

This oil is not the light crude that is ideal for refining into gasoline, so it takes a lot more effort to make gasoline out of the heavier crude.
------
True. Lots of variables.

[TFMcGuire]

Their religion is straight out of the Lake of Fire. And that is where their prophet and false god are too.

They destroy because that is what false prophets and false religions do.

Ultimately, they are destroying themselves.

[SAJ]

Almost right. You have to factor in transportation differentials. NYMEX crude is priced basis delivery at Cushing OK, whereas NYMEX Unleaded and RBOB are priced basis New York harbour.

The usual comparison of prices regarding crude and the products is 3:2:1. It's not quite precise, but has been an excellent metric for decades. 3 x price of crude - 2 x price of unleaded - 1 x price of #2 oil (heating oil, fapp).

Even so, you are far closer to accurate than was Eagle's little rant.

[Dog Gone]

There's a lot of that going around lately.

I feel somewhat of an obligation to refute them when I notice them.

[COEXERJ145]

The trolls have seriously infested the forum. They pretend to be "conservatives" but then spout the standard DU style talking points.

[TFMcGuire]

Plus new EPA regs are forcing more and more steps into the refining process.

Higher sulfur standards require additional washing and lower volume.

Tightened benzene standards are next

MTBE is being discontinued and Ethyl alcohol requires additional refining steps before it can be added or the vapor pressure increases beyond Federal limits. (Pentanes and Butanes have to be fractionated out.)

Plus, don't forget significant mileage decreases with the addition of ethylk alcohol to gasoline.

[TFMcGuire]

Trolls need the truth too.

They are only trolls because they have been fed trollish diets and not been properly cared for.

And association with other trolls has made them into bad-tempered dwarfs (mental midgets) with no sense of humor.

So keep feeding them the truth.

:)

[thackney]

The oil companies have been closing refineries over the last decade.

Just how many did they close? Refinery capacity has increased 13% in the last decade. Granted that isn't enough, but a lot of existing refineries continue to be expanded.

Refinery Capacity

[jec41]

I thought the 18-21% interest rates were the most beneficial.

[deport]

The processed output from a barrel of crude......

[thackney]

The cost of raw crude might be relatively low, but there's a very important point to note here. The cost of refining is a major component of the price

Both statements are incorrect.

[jec41]

By small fraction, you mean more than half?

----- Your model looks like it was created by the oil companies...:-) --- it leaves out profits at the manufacturing, wholesale and retail levels. No way that crude is near 55%. Not at todays inflated prices.

$75 dollars/barrel divided by 37 gals/barrel equals $2.03. After refining costs today I think remember $2.23 a gallon wholesale before taxes, distribution, and retail.

[thackney]

I listened to an "oil company executive" on a talk show today who tried to convince his audience that the price of crude change over the past 18 months or so had a direct correlation to the pump price and was the major cost controller. WHOA BUDDY! --- not so, for those of us who can do arithmetic. Even if you double the price of crude, it has a small impact on the true pump price.

[jec41]

Yes, I agree it is higher. Am doing some research now to find gas yield per gallon of crude

If sweet oil ~37 gals. gas to a barrel of oil. If heavy oil less.

[jec41]

This oil is not the light crude that is ideal for refining into gasoline, so it takes a lot more effort to make gasoline out of the heavier crude.

Only 30% of the refineries in the world can handle sour heavy oil. US refineries have been updated and 2/3 can handle sour oil. If not for that ingenuity and investment by US oil companies gas would be a lot higher.

[Iscool]

I just spent £30 on half a tank of petrol. I bloody well hope the price drops soon.

And you probably drive one of them little 'foreign' cars...

[Iscool]

And you don't get 1 gallon of gasoline for each gallon of crude.

You're right...Out of a barrel you also get jet fuel as well as the oils that don't require nearly as much of the refining process such as paint thinners, diesel fuels, motor oils and the least refined go into things like plastics...

I forget the percentages of how much of a barrel of crude goes where...

But at 10-12 bucks a gallon for laquer thinner, it's easy to see why they are making astronomical profits...

[Diligent]

Anyone in California catch Democrat Steve Wesley, running for governor, in his latest political ad, running on "how I will stand up to Bush, and not allow any drilling for oil of our coast"

Smooooooooth timing...not.