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Re: Question regarding fuel prices

Posted By: Dennis Bevers <bassco2@bellsouth.net>
Friday, 21 April 2006, at 9:34 p.m.

In Response To: Question regarding fuel prices (Jim Wilson)

Hello Jim,

You really know how to ask a short question that requires a long answer to get anywhere near the truth.

There are at least a dozen factors involved in the current price increases.

You posted, "The refineries are up and online and are making the gas."

The damaged caused by Hurricanes Katrina and Rita. Not all the offshore production has recovered as of this date. And I don't have first hand information, but a number of gasoline refineries were damaged, particularly by Katrina.

The futures market does have a direct impact on the prices we see at the pump.

The fact that world markets have bid oil to $73 per barrel have to be considered as a primary reason behind to current increases at the pump.

No new refineries have been built in the US during the past 3 decades. Some additional capacity has been added inside the existing refineries, but no new plants have been built. During the same time, some refineries in California were shutdown.

The US gov't (can you say EPA) actually dictates that all refiners MUST reformulate their gasoline for summer driving conditions. This causes both a spike in the net cost, but also a short-term shortage as refineies work to built up volume of the summer stocks.

Hopr the points help you see the big picture.

Dennis Bevers

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You'll find great information in this "Read Only" Archive, but remember..... things change.
Be sure to visit the Current Message Board when you're finished here.

We're very friendly, so don't be shy... just jump right in and post your question.
Scams outnumber legitimate biz ops about a bzillion to one, so it's well worth your time.



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