Refiners - a factor in the price of fuel.

[Trackrig]

We've all watched the price of fuel drop slowly when there's a glut of crude oil and then watch the price of fuel jump overnight when the price of crude goes up. This is old news.

Something I've been watching for a while is why the price hasn't (particularly of diesel) been going down more with the excess of crude production vs usage? My thoughts have been that the refiners have been charging more and more. Let's say that if crude drops 5%, the refiners have lowered the refined product only 4%. Or, if the price up crude goes up 5%, they've been charging a 6% increase in refined product. The storage capacity of crude tanks is almost full in this country.

We're producing almost a million more barrels of crude per day than we're using - the price should be dropping further, but the refiners keep upping what they take out of the middle. Crude has dropped from $63 per barrel in mid to late May to $48.45 today. That's a 23% drop in the price of crude. Has anyone seen the price of fuel drop anything close to 23% also???

They think (and apparently so) that everyone is so happy with the lowered fuel price that they won't notice if the refiners take a larger chunk out of the middle.

Here are two quotes from a Seeking Alpha story a few minutes ago:

* Even as the E&P and oilfield services sectors have slumped again, stocks of refiners such as Valero Energy (NYSE:VLO), Tesoro (NYSE:TSO), Marathon Petroleum (NYSE:MPC) and Western Refining (NYSE:WNR) have jumped 25% or more YTD.

Their stock price is way up because they've been generating a lot more profits.

* West coast refiners are big winners right now: Earlier this month, according to Credit Suisse, regional refining margins hit almost $60/bbl, - higher than the oil price itself.

That's a lot of profits, and growing.

Bill

[gat75]

Trackrig wrote:
We've all watched the price of fuel drop slowly when there's a glut of crude oil and then watch the price of fuel jump overnight when the price of crude goes up. This is old news.

Something I've been watching for a while is why the price hasn't (particularly of diesel) been going down more with the excess of crude production vs usage? My thoughts have been that the refiners have been charging more and more. Let's say that if crude drops 5%, the refiners have lowered the refined product only 4%. Or, if the price up crude goes up 5%, they've been charging a 6% increase in refined product. The storage capacity of crude tanks is almost full in this country.

We're producing almost a million more barrels of crude per day than we're using - the price should be dropping further, but the refiners keep upping what they take out of the middle. Crude has dropped from $63 per barrel in mid to late May to $48.45 today. That's a 23% drop in the price of crude. Has anyone seen the price of fuel drop anything close to 23% also???

They think (and apparently so) that everyone is so happy with the lowered fuel price that they won't notice if the refiners take a larger chunk out of the middle.

Here are two quotes from a Seeking Alpha story a few minutes ago:

* Even as the E&P and oilfield services sectors have slumped again, stocks of refiners such as Valero Energy (NYSE:VLO), Tesoro (NYSE:TSO), Marathon Petroleum (NYSE:MPC) and Western Refining (NYSE:WNR) have jumped 25% or more YTD.

Their stock price is way up because they've been generating a lot more profits.

* West coast refiners are big winners right now: Earlier this month, according to Credit Suisse, regional refining margins hit almost $60/bbl, - higher than the oil price itself.

That's a lot of profits, and growing.

Bill

Here in Southeast Texas, price of diesel IS DROPPING. It is about the same per gallon as regular gas in most places. I for one am thankful for the relief. It has been years since diesel has been as cheap as regular.

The price of diesel took a huge jump right after our industrious know-it-all government demanded ULSD from refiners a few years ago.

As a retired refinery worker, I can tell you it costs lots more for refiners to make ULSD.

[wa8yxm]

The bumper jack theory of Fuel pricing,, Raise it, lower it a little Raise it a bunch, lower it a little (Remember the old bumper jacks, worked just like that)

page 2.

Ever notice how when the price gets low enough there is a refinery fire or some other disaster that reduces oil production capability so the price has to go back up? I have.. Is this by design? You decide.

[gbopp]

And winter is coming. In the North East a lot of us use heating oil.
Even when the price of crude drops, the price of heating oil goes up in the winter.
Imagine that.