<VV> The price of gasoline and oil - no Corvair

[jvhroberts at aol.com]

 There's a bit of a flaw here. 

1. Not all oil is the same, not even close. 
2. Oil is only one of two raw material streams into a refinery. Natural gas is the other, used as a hydrogen source. 
3. ME crude requires a LOT less NG than Texas crude. Also, ME oil costs a LOT less to remove the sulfur, etc. 
4. ME crude is far less expensive to recover than Texas crude. Something like $3 a barrel vs. $20-45 a barrel for our stuff. 


Obviously, the value of any given lot of oil varies tremendously. 

 

John Roberts
 

 

-----Original Message-----
From: Jim Davis <jld at wk.net>
To: virtualvairs <virtualvairs at corvair.org>
Sent: Tue, Dec 11, 2012 5:52 pm
Subject: Re: <VV> The price of gasoline and oil - no Corvair


The spot price for reformulated gasoline is $2.60 per gallon today on 
the NY Merc.  Refineries buy US and Canadian crude at the Cushing price 
(West Texas Intermediate grade) which is $85.47 per barrel  and sell it 
at the Brent grade (world market ) price of $107.33.  A barrel of WTI is 
42 US gallons where as a barrel of Brent is 35 Imperial gallons.

Now you know why the Canadians want a pipeline directly to the Gulf Of 
Mexico.  Crude oil is worth an extra $20+ per barrel if they can get it 
on a tanker rather than let the American refineries buy it.   I am close 
to the Cottage Grove terminal on the New Orleans to Lima, OH.  22 inch 
pipeline, so gasoline is always cheap; usually about $0.50 more than the 
spot price. Cottage Grove does not have a blending license so only pure 
un-reformulated gasoline and ULSD is all they pull from the pipeline.
Jim Davis

On 12/11/2012 3:27 PM, efki at verizon.net wrote:
>   Oil it trading at $88.49 today. That is over $2.00 a gallon for the raw 
material. Then it needs to be processed. Distribution and advertizing costs.
> Then the retail needs to make some money. From what I've read most stations 
make more money from the stores that part of the station.
> Lastly the government isn't responsible for the price of oil. Worldwide oil 
usage it going up. The higher the demand the more it costs. Capitalism at work. 
Works for me.
>
> Eric
>
>   


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