For the past three months, oil prices have been basically flat.
Refinery outages combined with increased demand brought our gasoline stocks low.
The restrictions to build refineries leaves us with very little spare capacity so upsets have greater impact.
What is your take on the restrictions to build refineries? EPA? If that is so, why wouldn't Exxon build a refinery across the border from Brownsville, TX and truck gas across the border? Barring reason unknown to me for not taking this step, it seems Exxon is artificially restricting supply to increase prices.
BTW, I own 2,000 shares of Exxon stock which I purchased a little over 3 years ago for under $40/share.
I understand the economic reasoning for the higher prices, and it's clearly the lack of refining capacity.
My question is this: what evidence do we have that building new refineries is not economically viable?
I know that there is anecdotal evidence that there's always strong resistance from environmental groups, and that government regulation adds significant costs. But the same could be said of many other kinds of construction. Why is such opposition and government regulation a complete show-stopper for refineries?
With prices as high as they are, why don't oil companies very publicly announce plans for some new refineries, explaining that they are needed to improve supplies? Environmentalists would get a lot of heat from the public by objecting in the current economic climate.
While I don't believe most of the "Big Oil" baloney, they sure do appear to be acting in effective concert, though there likely is no formal cartel. There sure isn't much going on in the way of vigorous competition.