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Discussion Starter #7
I be curious...
does anyone know the yield of 1 barrel of crude in gals of gasoline, say 87 proof? I'm trying to figure out why if a barrel of crude goes up pennies, gasoline goes up many pennies!!!!
 

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thanks joe :)
 

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Joe,
It's very simple. Gas goes up many pennies when oil goes up a cent or two because the oil companies are greedy for profits. It's just an excuse to jack up the price. Most of the gasoline in California comes from the Alaskan oil fields and just some from other sources. In the last gas crunch, is was proven that the oil companies were selling oil to Japan when supplies were tight on the coast and using the pretext that oil from the mideast was hard to get thus driving up the price. At least that's MY understanding of it. Gas in the midwest was selling for 30 to 50 cents a gallon less than gas in Calif. at that time. Then all of a sudden, gas prices in Chicago and a couple of other cities in the midwest shot WAY up. Guess what? At the same time, gas on the West Coast went down to the level that it was formerly in the midwest (about $1.19 to $1.25 a gallon) Awfully convenient for the oil companies, huh? Jack the price up in one place and lower it in another, but not quite as low as it was in the first place to begin with. MORE PROFITS! Time to get off my soapbox now. x( 8o :)
BC, the PT Vike
 

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PT Vike said:
Joe,
It's very simple. Gas goes up many pennies when oil goes up a cent or two because the oil companies are greedy for profits. It's just an excuse to jack up the price. Most of the gasoline in California comes from the Alaskan oil fields and just some from other sources. In the last gas crunch, is was proven that the oil companies were selling oil to Japan when supplies were tight on the coast and using the pretext that oil from the mideast was hard to get thus driving up the price. At least that's MY understanding of it. Gas in the midwest was selling for 30 to 50 cents a gallon less than gas in Calif. at that time. Then all of a sudden, gas prices in Chicago and a couple of other cities in the midwest shot WAY up. Guess what? At the same time, gas on the West Coast went down to the level that it was formerly in the midwest (about $1.19 to $1.25 a gallon) Awfully convenient for the oil companies, huh? Jack the price up in one place and lower it in another, but not quite as low as it was in the first place to begin with. MORE PROFITS! Time to get off my soapbox now. x( 8o :)
BC, the PT Vike
Well...it's a bit more involved than that.

Fluctuations in supply are based on demand more than than they are a flilip in the market price for crude.

When prices are high, oil companies are encouraged to open more wells, refine more gasoline, etc., thereby eventually creating a surplus of our fave fossil fuel. The surplus drives down prices and folks are encouraged to drive more and buy more gas. In the meantime, the oil companies see the low prices and begin to shut down some wells and refineries because it isn't profitable to keep them all running with gas prices so low.

Then--you guessed it--lower supply drives gas prices up since demand for the nonce is so high. It's called supply and demand, part of Adam Smith's "invisible hand," and it's been going on just about forever.

Okay, now I'll step off my park bench. |)
 
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