Fuel Prices............WHY ??

Diesel is usually cheaper the gasoline by a few cents in Canada. It is not always the case but they are usually a few cents of one another. Diesel is taxed less in Canada if I understand it correctly to help the shipping of goods.

Some interesting comments that I never considered. Also some that are off the wall. The poster who said that Europe does not mfr. ULSD should do some research. Europe has been using ULSD long before we did in N.A.

Moisheh

My theory is they charge more for Diesel.... Because they can.

I mean the truckers have no choice to pay it.

ON TV just now I see political adds (NOTE) this post has nothing to do with politics) where the candidate says something about not asking how high every time some oil shiek says JUMP.. Fact is we get less than 10% of our oil from those folks over in the gulf and we have reduced oil consumption in this country that we could tell 'em all to shove it back in the ground if we wished to, There is no excuse for the prices at the pump going up every time OPEC gets greedy. But the oil companies still use that as the reason they jack the price. I know what Id like to do. but alas, not a practical solution.

Dennis M M wrote:
Inelastic demand is the big driver. Diesel consumption in the US is primarily from commercial trucking. The demand is there regardless of the price, therefore inelastic demand. Raising the price does not decrease demand, reducing the price does not increase demand. Therefore no increase in sales with a price reduction, so no advantage to the producer.

Ultra Low Sulfur is why diesel now costs more tha gasoline in general.

But the inelastic demand is why you don't see diesel prices changing nearly as much:
- If you have a truckload of merchandise that has to be shipped 100miles, there isn't much room to cut the fuel (diesel) consumption required, so you buy the same amount of diesel regardless of the price. Your driver is limited to a realatively small number of fuel stations he can get into. 20yrs ago, they already put a lot of emphasis on fuel efficency so the low hanging fruit is already gone.
- With passenger cars (mostly gas), if the price spikes, people slow down to increase mpg, car pool, combine trips, if they have more than one vehicle, they try to use the more fuel efficent one more often. A typical two car family with a big suv/truck and a passenger car can probably shave off 20-30% of thier fuel consumption with just a modest amount of effort.

So by supply and demand rules, if gasoline prices go up, users (passenger vehicles) reduce thier demand and that can drive prices back down but as the prices go back down, they drive more, so you see the price seesaw. If diesel prices go up, unless it is extreme, they keep buying diesel. Likewise when the price goes down...they keep buying diesel,so while there is price movement, it is much more gradual and you don't see the big swings.

One interesting thing that trucking companies are starting to buy natural gas powered trucks. Right now it's a tiny percentage and there is debate if it's a good long term option as fueling stations are limited but if it takes off, we could see a change in the diesel markets.

Lies mostly! I can show you wells that were drilled in OK and came up dry because they were 1000 ft short of the other wells. Worked on a drilling rig and if you go to Rt 18 and Rt 33 jct West of Cushing and go up on the bank you can find a well, 8 in dia., 7000ft deep and capped. Worked on the rig that drilled it.

randallb wrote:
It will be interesting to see what happens in ND when the price of crude drops to $70-$75/barrel. When crude gets around that price profitability drops to almost a break even proposition for the Bakken shale oil.

Read an article on that just this week. When crude hits the break even point for the expensive wells like Fracking, and such. then fracking will stop. Which is exactly what Saudi Arabia is trying to do. they are purposely raising oil production to try to force oil wells in the US out of business. Why? Because they want to control the price of oil in the world.

So when they low ball the US oil wells, and put them out of business. Then they will cut production, and sky rocket the price again. Or at least that is the story.

And it has happened before. I can remember years ago, when oil feel to $25.00 per. Many wells in Texas were capped. To expensive to pump it out.

Almost 100 years ago (1920), world wide light bulbs manufactures fixed the light bulb price (and life expectancy). Now today, why would anyone beleive that the diesel and much more, are supply and demand related. This is an old concept from an other time. No longer exists in real life today.

For what it's worth here in Palm Springs California gas is 3.43 and diesel is 3.53.

$2.92 for gas here today----without using my bonus points!!!!!

It will be interesting to see what happens in ND when the price of crude drops to $70-$75/barrel. When crude gets around that price profitability drops to almost a break even proposition for the Bakken shale oil.