Gasoline vs Diesel

[DRAFTSTUD]

Back when we all pulled up to the pumps and filled up with a $20 it was never a probleum. But yesterday I saw a Valero station where I fill up my F-250, the cost of Gasoline was $1.67 and Diesel was $1.77. Have alot of the stations where you live gotted that close to parity with the cost of gas and diesel. It used to be I had to pay around $.90 more for Diesel than what my wife paid for her gasoline. Just Curious. John

 

[Hntnhrd]

4 years ago diesel was .10 a gallon cheaper. Right now it is 2.29 and gas is 1.78. Diesel was 1.99 in Socorro New Mexico last week. If anyone knows why fuel is priced the way it is it would be nice to hear it.

 

[ringer]

Market manipulation. My entire life diesel was less than gas because it was cheaper to refine. I buy a diesel in 2004 and ever since then the price has been higher than gas. I just filled up for $1.99 and diesel is still falling while gas is going up. My bet is that speculators are gone and diesel will go below gas and stay there.

 

[guppie9]

You all can KMA!!!

Gas - 2.46
Diesel - 3.09

And we make the #$%^%& stuff!!!!

 

[BigHornRam]

I was going to say you guy's don't have any refineries Guppy, but I decided to do a search first. What do you know.............

Kenai Refinery (Tesoro), Kenai 72,000 bbl/d (11,400 m³/d)
Valdez Refinery (Petro Star), Valdez 50,000 bbl/d (7,900 m³/d)
North Pole Refinery (Petro Star), North Pole 17,000 bbl/d (2,700 m³/d)
Kuparuk Refinery (ConocoPhillips), Kuparuk 14,400 bbl/d (2,290 m³/d)
North Pole Refinery (Flint Hills Resources), North Pole 210,000 bbl/d (33,000 m³/d)
Prudhoe Bay Refinery (BP), Prudhoe Bay 12,500 bbl/d (1,990 m³/d)

 

[DRAFTSTUD]

You all can KMA!!!

Gas - 2.46
Diesel - 3.09

And we make the #$%^%& stuff!!!!

What can I say, I'm too busy pumping! LOL John

 

[TLC]

Market manipulation. My entire life diesel was less than gas because it was cheaper to refine. I buy a diesel in 2004 and ever since then the price has been higher than gas. I just filled up for $1.99 and diesel is still falling while gas is going up. My bet is that speculators are gone and diesel will go below gas and stay there.

+1. diesel gets closer to gas almost daily back here. cheapest diesel is at 2.179 right now. cheapest gas I have seen, 1.849.

 

[sreekers]

Someone can correct me if I am wrong, but this is what I have read and hopefully gotten correct on the price of Gas.

Gas is traded in contracts or futures. Those futures are for the upcoming month, and those contracts can vary from day to day, but there are points in trading when those contracts for the upcoming months close. Depending on where you are located, and how tough it is to get the refined fuel to your area will also dictate what your price will be. There are piping systems all over the U.S. for the energy, and cost to each area are different.

If you see the trading price of gas has gone down, expect it to go down at the pump, roughly a month later. You also have to view it in percentage's rather than in the dollar per barrel. Example, what percentage did gas fall on the overall price on the barrel? That percentage will equate to the penny figure that gas goes up or down.

Where the Industry was making a killing last summer was on the speculation that they could drive these contracts up based on demand. The speculators to some extent have had to pull out because they can no longer keep their cash cow in this market. The money they made off of gas is now being held onto and eventually will be speculated in the next "big" thing.

If I am completely wrong here tell me, but this is what I have read, and I think come to understand about the gas prices.

 

[ringer]

To cut through the BS why not go back and look up the price at the pump when oil was $33 per barrel before the speculation hit. Worldwide demand is in the dump so refining capacity is not a logical excuse so gas at the pump should be the same right? Maybe thay are hoping for a natural disaster so they can increase gas prices again.

 

[ARCAT]

I can't figure it out either. Around Christmas oil was $40 per barrell and gas was $1.50 per gallon. Gas got down to 1.29 the first of January. Now this week oil has been as low as $33 and gas is 1.85 per gallion. WTF????

 

[BigHornRam]

Here is a good read on the seasonal fluctuations in the diesel vs gas pricing from a year ago. http://www.freerepublic.com/focus/f-news/1992009/posts

 

[DRAFTSTUD]

Gup, Took the wife out to a Fine eating place at lunch and saw where the prices had already changed since yesterday: Gas $1.65 and Diesel was $1.75. Don't ya hate it when they don't give ya enough Ketshup Packages? John

 

[noharleyyet]

Don't ya hate it when they don't give ya enough Ketshup Packages? John


Quote:

Now John, we all know that your mode of transport runs on hay. Your hayburner's travel on diesel.

 

[smalls]

Market manipulation. My entire life diesel was less than gas because it was cheaper to refine. I buy a diesel in 2004 and ever since then the price has been higher than gas. I just filled up for $1.99 and diesel is still falling while gas is going up. My bet is that speculators are gone and diesel will go below gas and stay there.

Not quite Ringer.

First, fundamentals of gas and diesel demand have changed drastically over the last 15 years, mostly due to Europe's steady conversion to diesel as the primary transportation fuel. Up until the mid- to late-90's, Europe was a net exporter of diesel (i.e.- they produced more diesel than they used). Much of that diesel was barged to the US for sale. Europe now has a fairly large dependency on imported diesel (while now being long gasoline) as they cannot produce as much as they use. So not only is there less foriegn diesel being sold into US markets, but it has been more profitable for gulf refineries at times to export our domestically produced diesel to Europe (net supply loss).

Second, it isn't "easier" to refine diesel. When a barrel of crude is refined, a certain portion of it can be made into gas (about 60%) a certain portion into diesel (about 25%) and the rest into jet fuel, butane, road oils, asphalt, etc. The ratio of gas to diesel can be manipulated slightly, but a refinery essentially will end up with 2 gallons of gas for every gallon of diesel that is produced. You cannot take a gallon of diesel and further "refine" it and get a gallon of gas.

With respect to market manipulation... the only "manipulation" that I could claim is that refineries routinely reduce their production when margins are poor (which is exactly what they've been doing since about mid-December). But that is no different than any other private business, if you are the owner of a widget factory and margins on widgets suck, you'd probably make less widgets per day until margins improved....right?

 

[Dangerous Dave]

Here in the state everyone loves to hate (me too) Wackyfornia, deisel is consistantly higher priced because it is mandated we must use (and pay for) ULSD -ultra low sulfer diesel. Even though diesel is nothing more than cheap kerosene, the extra refining process and refinery production upgrades cost diesel burners 50-75 cents more per gallon compared to reg unleaded. Luckly the DuraRattler gets 19-21 mpg.

 

[smalls]

Someone can correct me if I am wrong, but this is what I have read and hopefully gotten correct on the price of Gas.

Gas is traded in contracts or futures. Those futures are for the upcoming month, and those contracts can vary from day to day, but there are points in trading when those contracts for the upcoming months close. Depending on where you are located, and how tough it is to get the refined fuel to your area will also dictate what your price will be. There are piping systems all over the U.S. for the energy, and cost to each area are different.

If you see the trading price of gas has gone down, expect it to go down at the pump, roughly a month later. You also have to view it in percentage's rather than in the dollar per barrel. Example, what percentage did gas fall on the overall price on the barrel? That percentage will equate to the penny figure that gas goes up or down.

Where the Industry was making a killing last summer was on the speculation that they could drive these contracts up based on demand. The speculators to some extent have had to pull out because they can no longer keep their cash cow in this market. The money they made off of gas is now being held onto and eventually will be speculated in the next "big" thing.

If I am completely wrong here tell me, but this is what I have read, and I think come to understand about the gas prices.

That's a reasonable explanation sreekers. Diesel is also traded on the NYMEX as "Heating Oil" (Gas is RBOB). It may be a bit unfair to say that the futures market is a predictor of prices, if the correlation was that strong we'd all be able to become quatrillionaires since we'd all see what pricing was going to do over the next year, case in point when crude hit $147 last July, March 09 futures were not trading at $33/bbl.

The real purpose of the futures market is to allow end users to hedge costs although it is used much more of a speculative investment at this point.

ARCAT,

The deal with the fluctuation with gas prices is a direct reflection of the reduced refinery utilization (especially gulf refineries who refine sweet crude and get a better gas ratio). As refineries slow production, crude oil supplies increase (negative pricing pressure) while finished product supplies decrease (positive pricing pressure). Interestingly, the demand for diesel has been so abysmal that inventories are still strong.

As a country right now, we have crude coming out of our ears. The SPR is essentially full, Cushing is near full and refineries are filling up old 20 oz bottles of Mt. Dew and putting them in the basement

 

[DRAFTSTUD]

Now John, we all know that your mode of transport runs on hay. Your hayburner's travel on diesel.

They sure do.....80 mph, unless I have to pass somebody! John

 

[noharleyyet]

The deal with the fluctuation with gas prices is a direct reflection of the reduced refinery utilization (especially gulf refineries who refine sweet crude and get a better gas ratio). As refineries slow production, crude oil supplies increase (negative pricing pressure) while finished product supplies decrease (positive pricing pressure). Interestingly, the demand for diesel has been so abysmal that inventories are still strong.

...a man could get less dumber purty fast ciphering smalls' commodities cyber seminars.

 

[ringer]

Smalls, I have worked for many corporations but have never seen one yet that could restrict supply to legally manipulate a market price. In a free market that is impossible to do without collusion between manufacturers because there is always a greedy bastard that will sell more widgits at a lower margin unless the price is below cost. Good explanation of diesel and europe but I am not buying the restriction of supply without collusion which means manipulation.

 

[BigHornRam]

Sounds like smalls read my link. Or maybe he wrote it!

From that article........

Gasoline and diesel fuel prices have traditionally followed set seasonal patterns from year to year. In spring and summer, the peak driving season, gasoline sells at a premium to diesel fuel. In the autumn, demand for distillate fuels (heating oil and diesel) picks up ahead of the winter at the same time that gasoline demand begins to soften. Refineries begin to build inventories of high sulfur distillate fuel (heating oil) late in the summer, while diesel fuel consumption increases in the fall due to farm use and trucking of goods ahead of the holidays. Heating oil prices put a floor under diesel prices through the winter, since if diesel were selling at a discount to heating oil, diesel could be used for home heating.

Sounds like heating oil sets the price for diesel in winter. Heating oil is always at it's highest price in the middle of the winter, when people need it the most.