There was an excellent article in the WSJ today about a pipeline between
OK and TX coast, and that its flow is being reversed to take oil to the
coast from OK where there is a large supply at a lower cost than world
average. This announcement has driven up crude prices. The article
also mentions that 15% of US-refined gasoline is being exported, and
diesel too, to take advantage of higher prices. This oil will be
refined on the coast and exported. US imports have been declining with
increased domestic production. This move affects the viability of the
Keystone pipeline deal as well (I will not even get into that whole
deal, I leave it as an exercise for the informed). A very interesting
article, I tried to get it online but it is behind the paywall
http://online.wsj.com/article/SB10001424052970203611404577041941864856270.html
Maybe someone has an online subscription. Bottom line is that our
prices are inflated because of these other goings-on, despite a strong
supply and lower-than-world-price domestic supplies.
As an editorial comment, this is devastating:
http://online.wsj.com/article/SB10001424052970204323904577040430486060086.html?mod=WSJ_hp_mostpop_read
-- offered without personal comment.
This stuff is distressing.
--R
On 11/16/11 10:24 PM, Allan Streib wrote:
Craig<diese...@pisquared.net> writes:
I was planning on writing an email about this tonight.
Over the last few months, our gasoline prices have inched downward and
our diesel prices have inched upward.
Is that so consumers will feel good about "cheap" gasoline, but not see
the increased diesel prices because they are hidden in the cost of goods
and the goods manufacturers and sellers will be blamed?
Or is it because winter is approaching and people are stocking up on
heating oil?
Or is it because someone is jigging the futures prices?
The rationale I've heard is that with current refining technology, it's
possible to get a lot more gasoline out of a barrel of oil than in the
past. So years ago diesel was in some sense a "waste product" in the
refining process, plentiful relative to demand, and therefore cheap.
Cheaper than gasoline at any rate. Today, more of each barrel of crude
is refined into gasoline as there is higher demand for it. Therefore, a
lower supply of diesel, and higher prices.
Allan
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