Didn't we already touch on this?
https://www.bobistheoilguy.com/foru...84388/diesel-fuel-price-drop#Post5384388
https://www.bobistheoilguy.com/foru...84388/diesel-fuel-price-drop#Post5384388
How Come Diesel is $2.69 when gas is $1.47 ?
- Thread starter LoneRanger
- Start date
- Status
And in Illinois, don't you have a very high biodiesel content? Most folks don't want that anywhere near their diesel engines. When I had my diesel Passat and drove through the midwest, I never bought fuel in Illinois.
Originally Posted by grampi
Originally Posted by Imp4
Diesel is more expensive because of market dynamics.
Diesel isn't refined as much as gasoline...wait, that doesn't make sense...
Market dynamics involve much more than refining. But you already knew that, right?!?
Originally Posted by Imp4
Diesel is more expensive because of market dynamics.
Diesel isn't refined as much as gasoline...wait, that doesn't make sense...
Market dynamics involve much more than refining. But you already knew that, right?!?
Originally Posted by Imp4
Originally Posted by grampi
Originally Posted by Imp4
Diesel is more expensive because of market dynamics.
Diesel isn't refined as much as gasoline...wait, that doesn't make sense...
Market dynamics involve much more than refining. But you already knew that, right?!?
The term "market dynamics" sounds like there's speculation involved in the process...we all know how that affects pricing...
Originally Posted by grampi
Originally Posted by Imp4
Diesel is more expensive because of market dynamics.
Diesel isn't refined as much as gasoline...wait, that doesn't make sense...
Market dynamics involve much more than refining. But you already knew that, right?!?
The term "market dynamics" sounds like there's speculation involved in the process...we all know how that affects pricing...
93 octane is the same price as Diesel here. 87 is cheaper but I only half my vehicles can run on it
Look at it from a refiners point of view: You buy crude oil and turn it into gasoline, diesel, kerosene (jet fuel) etc. You have to sell these products at prices that in total make a profit. You can sell all the diesel you make a good price. You find yourself selling gasoline and kerosene at low prices, even at a loss, because you make the difference up on diesel sales.
Not much more complicated than that.
Not much more complicated than that.
- Joined
- Apr 22, 2016
- Messages
- 1,237
Because they can
Quote
I remember when diesel was always cheaper than gasoline.
Which cost more to refine?
And also from a refiners point of view, the feed stocks (Crude Slate) must be matched to optimize either for gasoline or diesel. Certain feeds produce more of either product. Probably the refineries have balanced the feeds in anticipation for "Driving season", in other words cars on vacation and such. Now that didn't happen so an abundance of gasoline is in the system. This process is done over a period of months, it just doesn't happen in a day.
Diesel demand remains fairly steady year 'round.
And don't forget about ULSD, which requires the addition of lubricity additive to compensate for the loss of sulfur. Not cheap to do, and is done at the point of distribution (terminal level).
So ultimately, diesel fuel is more costly to make and distribute.
I remember when diesel was always cheaper than gasoline.
Which cost more to refine?
And also from a refiners point of view, the feed stocks (Crude Slate) must be matched to optimize either for gasoline or diesel. Certain feeds produce more of either product. Probably the refineries have balanced the feeds in anticipation for "Driving season", in other words cars on vacation and such. Now that didn't happen so an abundance of gasoline is in the system. This process is done over a period of months, it just doesn't happen in a day.
Diesel demand remains fairly steady year 'round.
And don't forget about ULSD, which requires the addition of lubricity additive to compensate for the loss of sulfur. Not cheap to do, and is done at the point of distribution (terminal level).
So ultimately, diesel fuel is more costly to make and distribute.
Some are still heating homes and trucks use a very similar fraction of the distillation tower. So while airlines may not be using as much fuel, I doubt trucks have stopped running.
Originally Posted by LoneRanger
Is it because diesel demand hasn't collapsed as much as gasoline, due to commercial transport industry? I would think the distillates market in
general would be in severe demand collapse due to airlines parking all their jets lately.
Originally Posted by LoneRanger
Is it because diesel demand hasn't collapsed as much as gasoline, due to commercial transport industry? I would think the distillates market in
general would be in severe demand collapse due to airlines parking all their jets lately.
It just occurred to me that we are also in the midst of RVP changeover, which puts pressure on gasoline sales to move the old high RVP stuff out of storage.
This is MOST LIKELY the reason that the President suspended the EPA regulations. Of course he would never explain that for fear that it would look like he was catering to the oil companies.
This way everybody can go on criticizing any action he takes and it will fade into the background, which it seems to have already done.
Without taking this action, come May 1st many oil companies would end up with storage tanks locked, and possible fines.
This is MOST LIKELY the reason that the President suspended the EPA regulations. Of course he would never explain that for fear that it would look like he was catering to the oil companies.
This way everybody can go on criticizing any action he takes and it will fade into the background, which it seems to have already done.
Without taking this action, come May 1st many oil companies would end up with storage tanks locked, and possible fines.
- Status
