Oil thread 9-7-06:Former BP head of Pipeline invokes 5th

[conjur]

Gas Prices since 1994

Notice how they've gone up since the Propagandist took office? Remember how much he and Cheney criticized Clinton/Gore about gas prices back in 2000 yet they've gone up *dramatically* since he took office?

 

[FuzzyBee]

Originally posted by: catnap1972

Originally posted by: FuzzyBee
I love how people bitch about the rising price of gas, but nobody has any reasonible solution to lower the costs.

OK Mr Smart Guy...you have some solutions?

Do you hear me bitching? No.

Even so:

A
N
W
R

 

[dullard]

Originally posted by: conjur
Umm, in 2000, oil prices were about $21/bbl and gas was OVER $1/gallon. Although, oil prices had settled into about $25/bbl at the end of 2001.

Why, yes it would be. And how does that violate my approximate math?

Originally posted by: GoPackGo
When oil was $35 gas was about $1.40

Temporarilly yes. It was also much higher than that too at $35 a barrel. My math was very rough to be simple. Taxes, profits (stations and refineries), delivery, etc are all variable. My point is the same, double one small part of the overall gas price, and it won't shoot from $1.40 to $5.

Originally posted by: dmcowen674
Thank you, you proved my point. We should have been at $3 a long long time ago.

I just stated that if it reaches $70 a barrel, we would be ~$3. So how does that prove your point and how does that mean that when oil was cheaper we should have been at $3?

A better model would look something like this:
P(t) = O(t)*E(t) + T(t)*(P(t)+A) + S(t) + R(t)*O(t)

P(t) is the price of gas over time
O(t) is the oil price as it varies over time.
E(t) is the efficiency of converting oil to gasoline. Lump in the refinery settings and improvements in to this category.
T(t) is the variable tax rate which is usually based on gas price and a constant factor, A.
S(t) is the station profit as a function of time.
R(t) is the refinery profit as a function of time.

I simplified this greatly to:
P(t) ~= O(t)/35+1

So, yes it was a simplification.

 

[GoPackGo]

Originally posted by: conjur
Gas Prices since 1994

Notice how they've gone up since the Propagandist took office? Remember how much he and Cheney criticized Clinton/Gore about gas prices back in 2000 yet they've gone up *dramatically* since he took office?

So what you are saying is that we are getting ripped off and our governmet is just letting it happen? Say it isn't so!

 

[conjur]

Originally posted by: dullard

Originally posted by: conjur
Umm, in 2000, oil prices were about $21/bbl and gas was OVER $1/gallon. Although, oil prices had settled into about $25/bbl at the end of 2001.

Why, yes it would be. And how does that violate my crude math?

Because you said $35/bbl oil would be $1/gallon gas. $21/bbl oil was $1.50 in gas back in 2000.

 

[dullard]

Originally posted by: conjur
Because you said $35/bbl oil would be $1/gallon gas.

Then add in taxes, and station profits. Read the whole post next time.

 

[Viper GTS]

You'd have to be a moron to think that a 10% increase in barrel costs would produce a 100% increase in pump price.

Viper GTS

 

[conjur]

Originally posted by: dullard

Originally posted by: conjur
Because you said $35/bbl oil would be $1/gallon gas.

Then add in taxes, and station profits. Read the whole post next time.

Ok, on Jan. 20, 2001, oil was $22/bbl and gas was about $1.50/gallon.

Since then, oil has TRIPLED to $66/bbl. Add in inflation, more "boutique blends", summer blends, etc. and gas should be well over $4/gallon. I guess we're lucky.

According to http://www.louisvillegasprices.com we just hit our first >$2.50/gallon station here in town.

 

[dullard]

Originally posted by: conjur
Since then, oil has TRIPLED to $66/bbl. Add in inflation, more "boutique blends", summer blends, etc. and gas should be well over $4/gallon. I guess we're lucky.

I still don't think you understand the relationship between oil prices and gas prices.

Lets try something different. Think about a car. If the cost of the tires doubles, does the cost of the car double? No. Doubling the cost of the tires has little effect on the cost of the car. Would trippling the cost of break pads tripple the cost of the car? No. Heck, would adding minor specialty features in newer models double or triple the car price? No.

Same goes with gas. The cost of oil is a minor fraction of the gas price. Thus doubling or trippling a small part does not double or tripple the overall cost.

 

[conjur]

I never said it was a one-to-one relationship. Re-read my post.

 

[dullard]

Originally posted by: conjur
I never said it was a one-to-one relationship. Re-read my post.

I did re-read it. You said, $22 -> $1.50. $66 -> $4+.

That is pretty darn near a one-to-one relationship.

In reality it is more like $22 -> $1.50. $66 -> $2.75.

 

[beer]

Originally posted by: Viper GTS
You'd have to be a moron to think that a 10% increase in barrel costs would produce a 100% increase in pump price.

Viper GTS

...you do realize we are talking about Dave, right"

 

[dmcowen674]

Originally posted by: beer

Originally posted by: Viper GTS
You'd have to be a moron to think that a 10% increase in barrel costs would produce a 100% increase in pump price.

Viper GTS

...you do realize we are talking about Dave, right"

That wasn't me that said a 10 to 100 ratio.

 

[conjur]

Originally posted by: dullard

Originally posted by: conjur
I never said it was a one-to-one relationship. Re-read my post.

I did re-read it. You said, $22 -> $1.50. $66 -> $4+.

That is pretty darn near a one-to-one relationship.

In reality it is more like $22 -> $1.50. $66 -> $2.75.

You neglected to take into account the other factors I mentioned.

 

[Viper GTS]

Originally posted by: dmcowen674

Originally posted by: beer

Originally posted by: Viper GTS
You'd have to be a moron to think that a 10% increase in barrel costs would produce a 100% increase in pump price.

Viper GTS

...you do realize we are talking about Dave, right"

That wasn't me that said a 10 to 100 ratio.

$65 a barrel now + 10% = $71.50 a barrel
$2.50 a gallon now + 100% = $5.00

Viper GTS

 

[dmcowen674]

Awesome

Now at $66

Everybody in here said I was insane when I said it would hit $70.

I am insane but I am right :laugh:

 

[rahvin]

Originally posted by: dmcowen674
OK, let's see your math.

We are approaching $70, what should gas be then according to your math???

A barrel of oil is 42 gallons of crude, an average refiner extracts 0.47 gallons of gas per gallon of oil.

($70/bar) / (42gal/bar) * (0.47gal/gal) = $3.54/bar raw cost, assume refining costs $0.50/bar = $4/gallon.

Now lets review Dave, $4 a gallon is 20% less than the $5 a gallon you have in this thread title. Now maybe in your world $4gallon = $5gallon but not in mine.

 

[3chordcharlie]

Originally posted by: rahvin

Originally posted by: dmcowen674
OK, let's see your math.

We are approaching $70, what should gas be then according to your math???

A barrel of oil is 42 gallons of crude, an average refiner extracts 0.47 gallons of gas per gallon of oil.

($70/bar) / (42gal/bar) * (0.47gal/gal) = $3.54/bar raw cost, assume refining costs $0.50/bar = $4/gallon.

Now lets review Dave, $4 a gallon is 20% less than the $5 a gallon you have in this thread title. Now maybe in your world $4gallon = $5gallon but not in mine.

Hang on - 21 gallons per barrel. let's use $63 cause it's a nice easy number.

That makes $3/gallon crude costs, plus refining, plus distribution, plus taxes.

So why the big discount at the pump?

 

[dmcowen674]

Originally posted by: 3chordcharlie

Originally posted by: rahvin

Originally posted by: dmcowen674
OK, let's see your math.

We are approaching $70, what should gas be then according to your math???

A barrel of oil is 42 gallons of crude, an average refiner extracts 0.47 gallons of gas per gallon of oil.

($70/bar) / (42gal/bar) * (0.47gal/gal) = $3.54/bar raw cost, assume refining costs $0.50/bar = $4/gallon.

Now lets review Dave, $4 a gallon is 20% less than the $5 a gallon you have in this thread title. Now maybe in your world $4gallon = $5gallon but not in mine.

Hang on - 21 gallons per barrel. let's use $63 cause it's a nice easy number.

That makes $3/gallon crude costs, plus refining, plus distribution, plus taxes.

So why the big discount at the pump?

Thank you sir :thumbsup:

Must be a fellow Rocket Scientist

 

[3chordcharlie]

Originally posted by: dmcowen674

Originally posted by: 3chordcharlie

Originally posted by: rahvin

Originally posted by: dmcowen674
OK, let's see your math.

We are approaching $70, what should gas be then according to your math???

A barrel of oil is 42 gallons of crude, an average refiner extracts 0.47 gallons of gas per gallon of oil.

($70/bar) / (42gal/bar) * (0.47gal/gal) = $3.54/bar raw cost, assume refining costs $0.50/bar = $4/gallon.

Now lets review Dave, $4 a gallon is 20% less than the $5 a gallon you have in this thread title. Now maybe in your world $4gallon = $5gallon but not in mine.

Hang on - 21 gallons per barrel. let's use $63 cause it's a nice easy number.

That makes $3/gallon crude costs, plus refining, plus distribution, plus taxes.

So why the big discount at the pump?

Thank you sir :thumbsup:

Must be a fellow Rocket Scientist

Just one question related to my math - is the .47 barrels/barrel for 'real' crude or price-standard crude?

 

[charrison]

Originally posted by: dmcowen674

Originally posted by: 3chordcharlie

Originally posted by: rahvin

Originally posted by: dmcowen674
OK, let's see your math.

We are approaching $70, what should gas be then according to your math???

A barrel of oil is 42 gallons of crude, an average refiner extracts 0.47 gallons of gas per gallon of oil.

($70/bar) / (42gal/bar) * (0.47gal/gal) = $3.54/bar raw cost, assume refining costs $0.50/bar = $4/gallon.

Now lets review Dave, $4 a gallon is 20% less than the $5 a gallon you have in this thread title. Now maybe in your world $4gallon = $5gallon but not in mine.

Hang on - 21 gallons per barrel. let's use $63 cause it's a nice easy number.

That makes $3/gallon crude costs, plus refining, plus distribution, plus taxes.

So why the big discount at the pump?

Thank you sir :thumbsup:

Must be a fellow Rocket Scientist

Heard on the radio yesterday that it takes 1.2 gallons of oil to make 1 gallon of gas. so maybe the numbers are better than what was calculated...

 

[3chordcharlie]

Originally posted by: charrison
Heard on the radio yesterday that it takes 1.2 gallons of oil to make 1 gallon of gas. so maybe the numbers are better than what was calculated...

That might answer my question, and suggest that crude costs are closer to $2/gallon at the moment.

If you assume away the 'producer profits' on easily accessible reserves, the rest of the industry is, and always has been pretty competitive.

Only in markets where the gas companies own the reserves do you see the kind of pricing games we get in Ontario (currently the price of gas is swinging more than 10% in the course of every single day - higher in the morning, falling til about 8-9pm, then rising again for the next day).

 

[dmcowen674]

Originally posted by: 3chordcharlie

(currently the price of gas is swinging more than 10% in the course of every single day - higher in the morning, falling til about 8-9pm, then rising again for the next day).

Speaking of swings, they have been raising the prices so quickly and multiple times a day that the price up on the signs is no longer matching the pump.

Sign said $2.39 but the pump had $2.44 and earlier in the week the sign was at $2.29 but was $2.34 at the pump.

 

[Engineer]

Gas jumped $0.10 in Lexington today. $2.49 a gallon again.

 

[3chordcharlie]

Originally posted by: dmcowen674

Originally posted by: 3chordcharlie

(currently the price of gas is swinging more than 10% in the course of every single day - higher in the morning, falling til about 8-9pm, then rising again for the next day).

Speaking of swings, they have been raising the prices so quickly and multiple times a day that the price up on the signs is no longer matching the pump.

Sign said $2.39 but the pump had $2.44 and earlier in the week the sign was at $2.29 but was $2.34 at the pump.

You know that's generally illegal right?

Most stations around here put the sign price up first, then wait to raisse the pump price until they know no cars left in line came in at the lower signed price.

That way they aren't entrapping, or (less generously) swindling. For the most part the people running the stations are quite powerless when it comes to price.