If oil closed Wednesday at $34.80 per barrel, why are pump prices, absent a tax hike, increasing?
In Sacramento, Fornicalia at ARCO (generally least expensive in area): $2.17.
Up from last week.
Why?
BZ
Price Per Barrel
Bloviating Zeppelin
Right thinking from a Left brain.
02 23 09
The Saudis cut production to meet the reduced demand so they can keep their profit margins up.
Disa, that would make the price of oil increase, wouldn’t it? Or are you just speaking of refined product?
Can’t answer that one. It doesn’t make sense to me either unless it has to do with the refineries.
My husband guessed that one possibility is that they buy it from the Saudi’s and when shipping it to the refineries they delay in taking it to the refineries, on purpose? He heard that from somewhere, but isn’t sure it is true. There is something fishy going on with the refineries or those responsible for getting it to us. That is the only way the price for a barrel goes down, yet our prices are up.
Another reason could be that the refineries also reformulate the different gasoline for different parts of the country according to their polution requirements in different seasons. They have to shut down to do that, so who knows. They could just be getting ready for Spring/Summer.
but the biggest reason is that the oil companies have cut back production (under the guise of repairing/updating refineries) thereby tighening the supply of refined product. meanwhile, offshore sits tankers and tankers full of crude waiting to get in and dump their load….but as long as the refineries have cut back and limited the supply the price will rise…..
The price has dropped about a dime here.
LOL they haven’t cut production. Not according to my cousin who works for one of the major oil companies.
Trust me it’s all about ripping us off. And NOT the oil companies, the OPEC countries.
I’ve been wondering that too – no answer really – Ours in Washington has continually risen since Obama’s been in.
One possibility is even though the crude price is the same, the refining price is fluctuating because Obama has said there will be no more refineries built. So because this knowledge there will be less competition in the refineries – which enables the refineries to drive up their price. – Anyways – that is one possiblity???
02 23 09
Well GW and Dons_Mind, we seem to be thinking along the same lines here. Jenn, I wish I had insider knowledge of how the OPEC nations really run things. I can only go off what I read or hear on NPR or read in the Wall St Journal.
Here in Alaska, where we produce & refine 95% of our own supply, we’re paying $2.36/gallon. The refiners say they’re losing money on jet fuel, and therefore charging more for vehicle gasoline to make up the difference.
The AK legislature has just introduced a bill to limit retail gas prices to not more than 10% above Seattle prices. We’ll see.
Don’s Mind & Rev. Paul: sorry about my poor manners, thanks for visiting and, moreover, thanks for taking the time to comment! Please come back frequently!
BZ
BZ,
You may have already seen it but BWH’s blog has a post concerning this issue.