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Oil prices and gas prices
Posted on 5/24/22 at 11:14 am
Posted on 5/24/22 at 11:14 am
Can someone explain why gas prices have increased relative to oil prices historically? Even as we have added ethanol to the mix..
We’ve been to $130/bbl oil before but gas was not $5/gallon then..
We’ve been to $130/bbl oil before but gas was not $5/gallon then..
Posted on 5/24/22 at 12:09 pm to Shepherd88
ETA: I really don’t know the answer.. but I would presume all the other input costs for the distribution side. Payroll, storage, services.. all of those items have gone up significantly since the early 2000s.
This post was edited on 5/24/22 at 12:11 pm
Posted on 5/24/22 at 12:12 pm to Shepherd88
quote:
We’ve been to $130/bbl oil before but gas was not $5/gallon then..
I would like to know the answer to this as well. Historically, the talking heads correlated high gas prices to high oil prices. Like you said, now we've reached pricing levels never seen before and the price of oil doesn't correlate to that.
Posted on 5/24/22 at 12:26 pm to Hammond Tiger Fan
Incorrect. We haven't come close to the highest, which was $185 a barrel back in 2008.
Posted on 5/24/22 at 12:26 pm to Hammond Tiger Fan
I would assume more taxes have been added in most states as well.
Posted on 5/24/22 at 12:32 pm to Shepherd88
From 2011 to 2014, gas prices were averaging $3.40 - to 3.70 a gallon with oil around $120 a barrel. Today, our is around $110 a barrel, but our prices are averaging $4.23. We also have "8%" inflation today, along with higher taxes on fuel in most states. It's not as if these oil companies are raising prices artificially. If so, why didn't they do it when oil was $15 a barrel?
Posted on 5/24/22 at 12:40 pm to Shepherd88
Taxes and reduced refining capacity. Basically government.
Posted on 5/24/22 at 12:42 pm to Shepherd88
Wait until China comes out of lockdown. Would not be surprised to see it jump another 30%.
Posted on 5/24/22 at 12:44 pm to Hammond Tiger Fan
Futures (fed by Biden's win after running partially on being anti-fossil fuel and then by proving it with permits/lease freezes and then fed again by the promises from world communities to black-ball Russian oil) combined with demand quickly outpacing both global and domestic production (which are both below pre-COVID levels) and continued high inflation?
Just a guess.
Just a guess.
This post was edited on 5/24/22 at 12:48 pm
Posted on 5/24/22 at 12:45 pm to Shepherd88
Natural gas prices are likely double over that period. Just one component similar to wages, capital costs, etc that have increased that all add up reflecting higher gasoline costs even if you kept the raw oil price flat.
Posted on 5/24/22 at 12:48 pm to Shepherd88
I think there are lots of reasons involved, but what it boils down to is its costing more to refine the oil.
Lots of US Refineries were built with heavy crude oil in mind. So we would import lots of heavy oil from overseas. They are typically more profitable. Refining domestic light crude oil is actually more expensive than refining imported heavy crude.
ETA: Since 1950, the US has always imported more oil than exported. Only two years that wasn't the case, 2020 and 2021.
Lots of US Refineries were built with heavy crude oil in mind. So we would import lots of heavy oil from overseas. They are typically more profitable. Refining domestic light crude oil is actually more expensive than refining imported heavy crude.
ETA: Since 1950, the US has always imported more oil than exported. Only two years that wasn't the case, 2020 and 2021.
This post was edited on 5/24/22 at 1:01 pm
Posted on 5/24/22 at 12:56 pm to Shepherd88
What’s the cost today to produce that 130$ Barrel of oil? What’s the cost today to produce that gallon of gasoline or diesel? Compare those to the 2008 cost of production and you have your answer.
Posted on 5/24/22 at 1:39 pm to michael corleone
I would think a lot of the cost to produce that oil has decreased due to improvement in fracking and technology.
Sure some things have increased but I’d like to see what those break even points have done myself over that time frame. I’d bet it’s gone down.
Sure some things have increased but I’d like to see what those break even points have done myself over that time frame. I’d bet it’s gone down.
Posted on 5/24/22 at 2:05 pm to Shepherd88
Mr T. What’s your prediction for the rest of Mr Biden’s term.
PAIN !
PAIN !
Posted on 5/24/22 at 2:47 pm to Shepherd88
quote:
improvement in fracking and technology.
Fracking just increases the amount of oil coming out the ground. Having 100MM bbls versus 90MM bbls of oil coming out a reservoir isn't impacting the prices at the pump.
Posted on 5/24/22 at 2:57 pm to notiger1997
I would assume more taxes have been added in most states as well.
Link?
State and Federal taxes have always been figured as cents per gallon, not by % of the sale. LA is 20.01 Cents per gallon, and is fairly low. Federal tax per gallon is 18.3 cents per gallon, regardless of the price per gallon.
So right now, at 4.15 a gallon, you are still only paying $ 0.38 tax, State and Federal on a gallon, the same as you did at 2.00 a gallon.
Link?
State and Federal taxes have always been figured as cents per gallon, not by % of the sale. LA is 20.01 Cents per gallon, and is fairly low. Federal tax per gallon is 18.3 cents per gallon, regardless of the price per gallon.
So right now, at 4.15 a gallon, you are still only paying $ 0.38 tax, State and Federal on a gallon, the same as you did at 2.00 a gallon.
This post was edited on 5/24/22 at 5:32 pm
Posted on 5/24/22 at 3:11 pm to Shepherd88
2 good question to start with might be..
Who owns the oil once it once it is pumped out of the ground?
Why does a gallon cost roughly the same in Louisiana as it does in Wisconsin, a state that has little to no oil/refining industry?
Who owns the oil once it once it is pumped out of the ground?
Why does a gallon cost roughly the same in Louisiana as it does in Wisconsin, a state that has little to no oil/refining industry?
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