A different take on $4 gas...

But you get BOTH 19 galons of cas and 10 gallons of diesel plus a bunch of other stuff. It is not one or the other...

MM


Every 42-US-gallon barrel of crude provides a little more than 44 gallons of petroleum products. This is gained due to processing of crude. From one barrel we get (in gallons):
•7.27 gallons (27.5 liters): Other products (feedstocks for petrochemical plants, asphalt, bitumen, tar, etc.)
•1.72 gallons (6.5 liters): Liquefied Petroleum Gases (LPG)
•3.82 gallons (14.5 liters): Jet Fuel
•1.76 gallons (6.6 liters): Heavy Fuel Oil (Residual)
•1.75 gallons (6.6 liters): Other Distillates (Heating Oil)
•9.21 gallons (35 liters): Diesel
•19.15 gallons (72.5 liters): Gasoline
 
MonacoMike said:
But you get BOTH 19 galons of cas and 10 gallons of diesel plus a bunch of other stuff. It is not one or the other...
Click to expand...

Correct, but you don't take 42 gallons of oil and say "make this one all diesel" - you are resource constrained from the get-go. They don't have the option of changing the mix of what they get out of it (for the most part), so there is very little supply side flexibility in diesel production, relative to how much oil they are processing. The same is true of gasoline, of course, but diesel usage has been increasing in the US, and even more so around the world.

I remember the big push to put diesels in passenger cars in the 70's and 80's, and most people just didn't understand that if you converted a large percentage of our private transportation to diesel it would create more problems than it solved. Most still don't understand this.
 
src said:
I remember the big push to put diesels in passenger cars in the 70's and 80's, and most people just didn't understand that if you converted a large percentage of our private transportation to diesel it would create more problems than it solved. Most still don't understand this.
Click to expand...

Great point. As for folks understanding, I am constantly amazed by the lack of general interest in our world, society, and governmental structures.

MM
 
maybe I missed it, but a lot has to do with oil being based on the value of the dollar and it has and continues to go do in value so yes it is going to cost more. We need to stop printing money!!!
 
kaz911 said:
Well the "hidden" inflation in the US is what is happening. Your government in the US is friendly enough to lie about how high your inflation really is. That is part of your Quantitative Ease program - so people get happier and spend more.
Click to expand...

MonacoMike said:
I believe there is a reason aside from gouging, we all agree on the taxes part.

The simple reason is: your "dollar" ain't worth sh!t.

The value of commodities in dollars has jumped as we (US)keep borrowing to run our daily governmental needs. For the most part from what I can tell oil values are one of the most truly capitalistic commodities on our planet. Gasoline is in and of itself a commodity separate from the oil it is made. Gas is affected by the myriad of regulations and regional formulations, it also is affected by ObummerCare, other employee costs, high liability insurance, and environmental insurance. Go try to open a refinery and see what happens. There are two things we will likely never see in our lifetime, new internal combustion auto companies and new refineries. The enviros will never let that happen.

Blaming high gas prices on "gouging" is falling for their game, they want you to blame "big oil" and "greedy ba$tards" while they enact laws and regulation to end the middle class ability to afford to boating and other hobbies that need petroleum to be fun. I fear we may have lived through a very special time when average folks could afford a nice boat, as evidenced by our recent high boat prices thread. "They" want boating unaffordable to all but the eleites too...

MM
Click to expand...

chuck1 said:
maybe I missed it, but a lot has to do with oil being based on the value of the dollar and it has and continues to go do in value so yes it is going to cost more. We need to stop printing money!!!
Click to expand...

It has been mentioned in passing. :grin:

MM
 
Of course, those who can't afford a boat or have a small bass boat are looking at us on this site as a bunch of whiners. We have big boats that eat a lot of fuel so stop bitching.....yep that is what they are say'in
 
AKBASSKING said:
Of course, those who can't afford a boat or have a small bass boat are looking at us on this site as a bunch of whiners. We have big boats that eat a lot of fuel so stop bitching.....yep that is what they are say'in
Click to expand...

But honestly i didn't think those 2 little 454's would use any more fuel than my single 140hp Suzuki outboard! I mean I had to buy a diesel BMW so I could afford to run it.

What was it my daughter said to me when she stood beside me at the wharf and watch the bowser click over to $1200. "So Dad, why can't you afford to buy me car?"




Sent from my iPad using Tapatalk HD
 
chuck1 said:
maybe I missed it, but a lot has to do with oil being based on the value of the dollar and it has and continues to go do in value so yes it is going to cost more. We need to stop printing money!!!
Click to expand...

You got that right! Some of our pensions are paid in GPB and every month they seem to get less and less and ......I can see the day coming before long (if we continue on this path) that the US $ will cease to be a lead currency.
 
I am pissed!! gas just went to $425.9 in central Indiana. Every station in my small town (about 30 stations) all changed at the same time. 12 noon today. Tell me that they do not fix prices.
 
Sprint7TW said:
I am pissed!! gas just went to $425.9 in central Indiana. Every station in my small town (about 30 stations) all changed at the same time. 12 noon today. Tell me that they do not fix prices.
Click to expand...

"They" do not fix prices.

The market fixes prices as gasoline is a commodity.

Do stock brokers "fix" stock prices? They all sell the stock for the same price at the same time...

MM
 
MonacoMike said:
"They" do not fix prices.

The market fixes prices as gasoline is a commodity.

Do stock brokers "fix" stock prices? They all sell the stock for the same price at the same time...

MM
Click to expand...

A gas station does not act as a broker, it is a retailer. And oil is traded as a commodity, but gasoline is sold as a product.

If it worked the way you explained it, then gas stations would compete on price more, rather that prices floating upwards to level the local market.

Even though oil prices are fairly stable and relatively low (compared to a few years ago), the manipulation of refinery capacity is used to maintain high prices at the consumer level.

Gas station owners aren't getting rich, either. Most of their money comes from what is sold inside the store, not at the pump.

So, consumers are getting bent over, station owners are getting by, and oil companies are making record profits in a period of lower demand for their product.

Go figure.
 
from the original article.


Another myth: Big Oil makes "excess" profit. Nonsense. The oil business is fiercely competitive. If one company charges a penny too much, other companies steal its business. Apple's profit margin is about 24 percent. McDonald's makes 20 percent. Oil companies make half that
Click to expand...

There is more to it than "big oil is making record profits"
 
Different industries have different profit margins. Comparing Apple to McDonalds to Exxon is not valid. Comparing Exxon to BP is valid. Comparing Exxon 20012 profits to Exxon 2008 profits is valid.

Comparing profit margins across industries is a smokescreen. It hides the fact that they have different supply chain issues, different production issues, different staffing issues, and so on. Compare Apple to HP to Dell. Compare McDonalds to Burger King to Subway. Compare Exxon to BP. But don't throw Apple's 24% margin up against Exxon's 12%, because it just isn't valid.

But it's a great way to deflect people who don't know any better from the fact that, no matter what the margin is, they are still showing record profits year over year, in a time when supply costs are down and demand is down. That profit isn't magically appearing from nowhere. It's coming from our wallets. End of story.
 
Neither can you pretended that a 12% is "excessive". As for record profits, you need to compare those profits with the size of the investment to gain better insights.

If you had $10b invested, sure a $1b profit looks nice, but I can get half that with no risk sitting in a bank account.

Now I buy a few companies and I've got $100b invested, and pull a $5b profit (hey look, it's a record!) but I've got $100b at risk earning no more profit than if I stuck it in a bank.
 
Again, it's all relative, and I am talking about comparing the same company's results year over year. I never called 12% excessive. All I am saying is that oil prices are stable, gas prices are rising, and it's clear where the money is going.

In one industry, 12% might be doing fantastic (oil production and exploration, for example), while in other industries it would be a sign of trouble. Profit margin percentage isn't an absolute indicator of performance when you cross industry lines. What it is, is a valid measure of one company's operating efficiency when compared to similar companies, or itself historically. Period.

Meanwhile, you can't dispute the fact the the oil production industry overall has seen tremendous profit growth over the last several years. It's just true. Talk all you want about Apple and McDonalds and "but 12% isn't that much", but we are still paying a premium for gasoline which IS NOT supported by the cost of crude. It is blatantly obvious where that extra cash at the pump is going.
 
src said:
...but we are still paying a premium for gasoline which IS NOT supported by the cost of crude. It is blatantly obvious where that extra cash at the pump is going.
Click to expand...



Because gasoline IS a traded commodity as shown in the linked report.

http://money.cnn.com/data/commodities/

Refineries are selling gasoline to the highest bidder worldwide so as a fuel user we compete to get crude and then compete again to get refined gasoline or diesel for our cars, trucks, and boats.

MM
 
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sfergson727 said:
Oil is trading at $93 per F**KING barrel and today the local gas stations are $4.35 per F**KING gallon for 87 octane. I am really starting to get pissed.
Click to expand...

To my contention that prices are bat sh*t crazy, we are in a price plummet in the Omaha metro market. $4.04 before Memorial Day, bought at $3.55 a two days ago, same station was $3.53 the next morning, and $3.43 this morning. I'd feel great about this if I didn't know prices are skyrocketing elsewhere. We are usually considered a high price market as we have amongst the highest taxes at the State level.
 
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