Diesel Prices out of kilter?

[MNgopher]

Noticed today that Diesel pricing here is off the charts. At the moment, E10 gasoline is selling for around 3.20 a gallon on average in the Twin Cities, and can be found as low as 3.09 a gallon.

Diesel just jumped to 4.39 a gallon at many stations around me. Thats $1.19 more a gallon than gasoline! 37% higher than gasoline. Makes some of the appeal of better fuel mileage on a diesel dissapear at the moment

Anyplace else with Diesel pricing this out of kilter? Its been higher than gas for a while, but this is the biggest differential I've ever seen...

 

[bepperb]

Glad I don't use oil to heat, which is basically the same as and priced similarly to diesel.

 

[Kestas]

Is the demand for diesel relative to gasoline higher than in the past? My understanding is that our refineries can tweak their output to make more gasoline or more diesel, but only to a point. Production of the two must still remain somewhat proportional.

 

[45ACP]

Thats the thing, id have a VW Touraeg or Tiguan or Jetta in TDI by now but with diesel at $3.69 and $3.89 a gallon and higher compared to gasoline, that 40MPG+ of diesel makes me just want to get a gas hybrid.

Id love a diesel, but i agree.

 

[Trav]

10c more than premium hereat the moment.

 

[McKittrick]

Here it is 3.09-3.19 for gasoline 3.69-3.89 for diesel.

Some reasons I have read is that gasoline demand has dropped significantly resulting in lower gasoline prices, refiners can change product mix slightly for gasoline/diesel percentages but not much. This results in total throughput being a little less. I will have to see if refinery utilization is falling which would confirm this.

demand for diesel has remained steady so it is relatively higher than demand for gasoline, resulting in higher diesel prices.

And export from USA of refined products has been growing, most of which is diesel. It is now at nearly 900,000 bbls/day.

One more factor stated for upper midwest is being near the end of the pipeline distribution system, which might explain your $1.19 difference compared to our 60 to 80 cent difference here in central Texas.

In the past with normal diesel/heating oil change for winter the price would jump to equal premium gasoline, but this year well above premium.

I have a diesel truck, and it gets used sparingly now.

 

[Kuato]

It's price gouging, clear and simple. Before there were widespread diesels in the US, diesel fuel was less than 1/2 of regular gas prices.

 

[Lead Shoes]

Because more trucks are hauling stuff for the holidays, so they blame the price increase on some other economic event, and reap the profits, because no matter what they have to buy it...

And its about 1 dollar more for diesel here in Fargo/Moorhead.

 

[kschachn]

It has to do with demand and the crack spread. This is about Washington State and is a little outdated but still accurate:

http://theseventhfold.com/2010/04/16/the-curious-case-of-the-crude-crack-spread/

 

[chubbs1]

Originally Posted By: Kuato
It's price gouging, clear and simple. Before there were widespread diesels in the US, diesel fuel was less than 1/2 of regular gas prices.



I do always remember as a kid, when I was traveling, seeing the diesel lower than or the same as regular gasoline. It is a gouging that hurts the whole economy. Why was diesel cheaper than regular gas 20 years ago? What has changed so dramatically that it is so much more. I am sure there are some reasons like USLD regs. but greed has to creep in at some point. We are so dependent on trucking and they know in the end we will pay. If I was president I would be karate chopping the oil refinery CEO's. Lowering the price of diesel would help us all out.

 

[kschachn]

It forever amazes me to read how oil and refined goods prices are a "conspiracy" or "gouging" or whatever. It is -never- that from a producer or refiner standpoint. Speculators in the market drive up prices for crude on their daily whim but after that it is all driven by the market (as influenced by regulatory interference of course).

 

[kschachn]

Originally Posted By: chubbs1

If I was president I would be karate chopping the oil refinery CEO's. Lowering the price of diesel would help us all out.


THAT is already happening and it does absolutely nothing to lower the cost of refined products. The only thing that would lower the price is a drop in demand or an increase in supply.

 

[JHZR2]

wow. in NJ, RUG is 3.13, PUG is 3.33 and Diesel is 3.49. The thing is that the UG prices are cash - cc is 10c more per gallon at each tier, while diesel is same price cash or credit.

The reality is that we mandate ULSD. This requires copious hydrogen to hydrotreeat the aromatics and open the rings so sulfur can be removed. That means use cat cracker gas or NG to steam reform to hydrogen. That is all $$$

Meanwhile, the blend pool for heating fuel doesnt need to be as low sulfur. That may cause the use for diesel to be priced at a premium...

 

[AuthorEditor]

Around here gas just dropped around 10 cents to $3.59 while diesel went up 10 cents to around $4.09. I was thinking it had something to do with winter diesel coming in, but maybe I'm wrong. Most of the summer diesel was $3.99 around here.

 

[MNgopher]

Theres been rumbles about unexpected demand from the Ag harvest (which to my knowledge is no different than any other year) and tons of excess demand for Diesel out in western North Dakota for use by equipment out on the Bakken Oil Field.

We may be on the "end" of the distribution network to come into the area, but we also produce a large amount of refined product here that goes out (strange to hear, I know, from a non-oil producing state). Flint Hills in Rosemount in one of the top 15 largest oil refineries in the Country, around 330,000 barrels a day of throughput (using canadian oil sands crude).

Just interesting to note the huge discrepancy at the moment.

 

[Garak]

Same up here. It's above gas, and that's pretty uncommon, though it does occasionally happen in the winter. We had a big refinery fire up here that wiped out 20% of our capacity, plus winter is here.

 

[Trajan]

http://www.eia.gov/oog/info/gdu/gasdiesel.asp

http://blogs.cars.com/kickingtires/2008/05/why-is-diesel-m.html

http://en.allexperts.com/q/Oil-Gas-3147/Gallon-gas.htm

One 42gal gallon barrel of crude oil yields:

19.5 gallons of gasoline
9.2 gallons of distillate fuel oil (diesel fuel and home-heating oil)
4.1 gallons of kerosene-type jet fuel
2.3 gallons of residual fuel oil (used in industry and marine transportation and for election power generation)
1.9 gallons liquefied refinery gases
1.9 gallons still gas
1.8 gallons coke
1.3 gallons asphalt and road oil
1.2 gallons petrochemical feedstock
0.5 gallons lubricants
0.2 gallons kerosene
0.3 gallons other

 

[daves87rs]

Just give it a little time...gas will catch up soon....

 

[andyd]

Yah If i could heat my house with regular gas. it would be cheaper than heating oil.

 

[Klutch9]

I remember somewhat recently seeing diesel for a couple cents less than 87 octane, but it never lasted more than a day or two. What really gets me about diesel is the price disparity between multiple stations. Some sell it for $3.79, some for $3.89, some for $4.09, some for $4.29, etc. And some of these stations with massive disparities are only a mile or so apart. I find that the pricing of e85 also has a big disparity around here, but not as bad as diesel does.