Refinery cuts sending gas prices up

[Robbien]

Source: Delaware County Daily Times

Retail gas prices are at their highest levels in several weeks. The national average price of gas topped $1.92 a gallon Saturday, marking an increase of nearly $0.30 a gallon (or 18%) from the $1.62 a gallon multiyear low price set on December 30, 2008 and the first time the national average has crossed the $1.90 a gallon level since November 24, 2008. Looking back to this date in 2008 the national average price of gas was $2.97 a gallon. For the fourth consecutive week, most people have seen prices at the pump increase, while demand and crude oil prices continue to remain down. Crude oil closed the week at $40.17 a barrel, compared to prices of $89 per barrel a year ago.

Gasoline production has declined, below last year’s levels for the seventh time in eight weeks. Several refineries have announced fuel production cuts because of weak profits stemming from soft demand. Consumer demand for gas is running almost 3% below last year levels.

. . .

“It’s no wonder people are raising their eyebrows at gas prices. The economy is contracting, oil prices are low and motorists have been driving less. These factors would typically lead to a decrease in gas prices, but refineries are trimming production, and that’s propping up prices” said Catherine L. Rossi, Manager of Public and Government Affairs, AAA Mid-Atlantic. “Escalating gas prices are hardly justified right now. Refineries have cut production to pump up their profits. It’s unfortunate for consumers already battered by the economy. ”

February will be an interesting month for gasoline watchers because this is the time of year when the industry on the west coast begins depleting its inventory of winter fuels for the introduction of warmer weather blends. Prices should retreat before a slight seasonal increase in prices which normally happens in early spring. If this decline does not occur, then consumers may find themselves facing another spring season of aggravatingly higher gasoline prices even as the price for crude oil remains low.

Read more: http://www.delcotimes.com/articles/2009/02/09/business/doc49905238861c8162138132.txt

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Refineries producing less to increase prices. Got to keep those billions rolling in.

[billybob537]

1. Nationalize the oil industry!

Why should we only nationalize the bad businesses?

[tularetom]

2. May not work so well this time

IMO, gasoline is not as "inelastic" of a commodity as the oil companies think. Last year after the steep runup to $4 per gallon gas, there was a significant dropoff in consumption. People found other ways to get where they were going or discovered they didn't really need to go anywhere in the first place.

So if you raise prices, you make more profit per gallon but you sell fewer gallons. If you lower prices you sell more gallons at a lower profit margin.

They think they can sell as much as they want regardless of the price, but I think there is a limit to what the American motorist will (or can) pay.

[Robbien]

4. What they found out though is that consumers didn't radically change driving habits

until the gas price got a bit over three dollars a gallon.

Guess that is what they are betting will happen this time around also. So in their minds there's profits to be grabbed.

[radfringe]

3. WOOT! because $40 billion in Profits isn't enough!!!!! (:sarcasm: )n/t

[mentalslavery]

5. Obama FDR Lincoln-Nationalize Banks/OIL-Put Repuk leaders

in jail and any other person that dares to use the word "free-market". Give people an 8 hour day that pays a working wage.

[notadmblnd]

6. Just this month alone there another 500,000 people who don't have to be on the roads daily

consumption isn't going to go up any time soon. I use my car to go to the grocery store and to pick up my son from school. On Friday afternoon, I park it and don't get back in it until Monday afternoon.

[Whosis]

7. Yea for the oil companies

So they get the oil at decreased prices and bottleneck at their end to drive our prices up. Is it really free market when these a-holes control most of the supply/process line. Heck they even have their buddies on Wall Street to screw around with the futures market for them.

[Chemical Bill]

8. Isn't lack of refinery capacity a big reason for the past spikes ?

At least I remember reading that in the opinions of corporate news mavens.

Here's what CNN said:

http://money.cnn.com/2007/04/17/news/economy/refineries/index.htm

Oh look, here it is in the Washington Post:

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/20/AR2006042000594.html

If only we had built more refineries....

Bill

[Robbien]

9. Not really. Hedge funds were putting all their bets into commodities

The commodity boom was aided and abetted by investors, especially leveraged investors such as hedge funds. Hedge funds used commodities to bet on strong global growth and catch the updraft in emerging markets indirectly reducing problems of direct investment. Commodities also provide significant leverage making them more attractive to hedge funds.

http://www.rgemonitor.com/globalmacro-monitor/255472/holes_in_the_ground__the_end_of_the_commodity_super_cycle

And all the profits were doled out to execs and stockholders. None was put back into the industry.

[denverbill]

10. We need to drill our way out of this!

Like maybe by drilling holes in the heads of some oil company execs.

[florida08]

11. nationalize them absolutely

In the first place oil is a natural resource that should be protected if we're running out like they all claim. In the second place all I hear is you don't raise taxes during an economic crisis so what the hell do they do? Take them over for a while and get some decent people in there whose loyalty is to the country.

[Andy823]

12. Once again

The prices are being manipulated in order for greedy oil companies to make large profits the expense of the American people! Congress needs to get of their fat rear ends, and start passing laws the prohibit such tactics as price manipulation by corporations that have a monopoly on certain product, like fuel. I am all for a company making a profit, but if 40 some billion is outrageous! They did just fine back before Bush took office, so they can't tell me they "have" to raise the prices like this.

[acmavm]

13. Weak profits??? WTF, these vultures are making RECORD PROFITS

every fucking quarter.

When is the god damn government gonna step in? This is criminal manipulation of the market.

[CatholicEdHead]

17. Philsophy is still to increase the profit gain per quarter

That type of thinking has not changed. :puke:

[Psephos]

14. gas is under two bucks - never thought I'd see that again...gonna save my anger for something else

lots of other places for it these days

[Tyler Generation]

15. For real! nt

[vinylsolution]

16. And when gas goes back over $2 / gallon again....

.... the corporate media will all be shouting:

"It's Obama's fault!"

"It's Obama's fault!"

"It's Obama's fault!"

[jfkraus]

18. Tax their profits, cut their subsidies

Want to get the economy running again? Decrease the cost of fuel. Why are the simple things always ignored.