RV Fuel Issues & Prices - Post 'Em Here!

[Dick_A]

All other fuel threads will be automatically deleted. 🙂

[doublenot7]

Our local prices just dipped a bit, which was accredited to a shut down refinery coming back online. Must be a lie though since the space-time continuum ignores the laws of supply and demand.

[cekkk]

Predictions, anyone? Price of regular in six months? :B

[SRT]

Gas prices continue to slowly, ever so slowly, drift downward. The higher priced stations have reduced gasoline by 2¢ a gallon to $3.83.

[HJGyswyt]

Buckley Washington, 4-11-2012

Diesel: $4.35, Regular Unleaded: $4.09

[DelCamper]

The refinery I worked had a 300 million dollar environmental upgrade just to be allowed to stay on stream due to increasing tighter sulfur regulations. That 300 million did not refine one additional barrel of crude. At 2.2 billion it's an increase in capacity if not with all of those funds but probably 80% of it. At 20 to 25 cents a gallon in gross margins (delta between crude cost and finished product value) there is not a lot to play with. That 2.2 billion expense requires a lot of gallons of throughput just to get your money back.

[DelCamper]

tomman58

Competing in the refining industry is brutal. So brutal that the majors have divested themselves of a great segment of that side of the business and the likes of Valero a strictly refining company was created. Refining poses the most risks both physically and economically with the least reward. Only at very short times were they really good profit producers. Sunoco a pure refining company is selling the business and concentrating on marketing (gas stations) instead. Fountain Cokes offer a better return on capital invested. The post economic slump the US has reduced crude oil demand by 3 million bbls / day from 20 million to 17 million bbls/day. The rocket scientists in Washington wanted to have Uncle Sam build refineries because they just could not stand the gravy train that Katrina produced for a year. That would have been another terrible idea for Washington to carry through. Now more then a dozen US refineries have closed with one Sunoco refinery that was sold and is being disassembled and sent to India.

Refining had an eight year streak of pretty good with one year of great now followed by what is believed to be very poor for as far as the eye can see. It's no great business and over time it was the bastard child of the oil industry.

The money in oil is in E&P (Exploration and Production) which is oil wells and crude oil, not refining.

I don't know the specific situation at Marathon but it is possible that units are being built or modified to produce more diesel instead of gasoline. The other possibility is they are meeting the new much lower sulfur regulations which requires a lot more refining and ion the end provides zero profit.

[omatty]

4.10 per gal of diesel today

[tomman58]

DelCamper wrote:
As gasoline demand drops diesel becomes more expensive relative to gasoline. When gasoline is in high demand too much diesel is made as a by-product and the market is flooded with diesel dropping it's price. This happened often in summer. Now diesel is the driving force and only as much is made to meet market demand. Diesel is 20% heaver then gasoline and less is therefore in every barrel of crude. Many see gasoline as the "higher product" and assume it should cost more. In reality diesel is more valuable because refining is the lowest of costs in the overall price reflecting 20-25 cents a gallon outside of a rarity like Katrina. With less diesel in a barrel and the cost of crude being 10 times or more of the refining cost diesel is a premium.

Even though I spent three decades in power generation within a refinery you if your attend enough meetings you get to understand downstream oil economics a bit.

AHHHHHHHHHHHHHHH do you suppose the diesel issue is why Marathon here in Detroit is spending many, many millions adding to their refinery for diesel?????

You gotta know if their is a buck in it the oil companies are there to give us a good rip!

[DelCamper]

As gasoline demand drops diesel becomes more expensive relative to gasoline. When gasoline is in high demand too much diesel is made as a by-product and the market is flooded with diesel dropping it's price. This happened often in summer. Now diesel is the driving force and only as much is made to meet market demand. Diesel is 20% heaver then gasoline and less is therefore in every barrel of crude. Many see gasoline as the "higher product" and assume it should cost more. In reality diesel is more valuable because refining is the lowest of costs in the overall price reflecting 20-25 cents a gallon outside of a rarity like Katrina. With less diesel in a barrel and the cost of crude being 10 times or more of the refining cost diesel is a premium.

Even though I spent three decades in power generation within a refinery you if your attend enough meetings you get to understand downstream oil economics a bit.

[SRT]

More stations have dropped their gasoline prices from $3.85 to $3.75. Diesel prices run from $4.09 to $4.23. Plan B will be in effect unless prices for gasoline get below $3.50. Feel sorry for the diesel owners forking over all those inflated dollars for fuel.

[SRT]

Hmmm, we seem to have gas prices retreating. According to Gas Buddy, local prices vary from $3.75 to $3.89. Many stations that were at $3.89 have dropped to $3.83. But, as we know, prices can go back up. Diesel prices range from $4.15 to $4.22.

[sunkist]

$3.69 for ethanol unleaded in Dell Rapids, SD today.

[DelCamper]

The price is not in the refining margins which are pretty poor in the $8 a bbl range (roughly 20 cents/gallon). Refining is so poor that SUNOCO is going out of the business concentrating on Canadian Tar Sands and marketing (gas stations) instead. Roughly every $10 increase in crude price equates to 25 cents a gallon. They're about on target today.

[cekkk]

DelCamper, you're right. I wasn't suggesting anything, just that tankers hanging out during high price days is not unusual.

But I do wonder about the prices of gas today. When oil topped at nearly $150/bbl gas was about $4. At 107 today it's about $4. Shame on me for speculating, but my guess is the $4 price just ain't going to
hold if/when oil goes to $150. So we'll hear about refineries closing, switching over blends, more taxes. Same ol same ol. Why, after 40 years of this game, can't we know more than we do about this industry? The industry won't talk, "environmentalists" love it as the bike their
sorry butts from their downtown loft/dorm to the office/classroom, and the government just keeps on being the government.

[DelCamper]

cekkk

There is no contrived shortage of supply to the refineries like the 1970s. Refining margins are not high. OPEC and non OPEC members are pumping more then there is demand for and the crude oil is being stored everywhere it can be globally.

I have three guesses on why this is happening, Iran, Iran & Iran.