Pulaski

Yes, I think switch over is usually in March.

Guindalf

I heard that they're supposed to be switching to the summer blend earlier and prices could well hit $3.75 by the summer.

yukichon

If the US is generating so much fuel now and claim to be self sufficient by 2035, why does the cost of petrol continue to rise?

lansbury

So the oil companies can make the same amount of money selling less fuel.

Pulaski

Global supply and demand. If an oil company can export US oil/ distillates to an overseas market for a better price, it will. The US is not a ring-fenced market.

TimNiceBut

Looks like premium jumped 8c overnight out here at my local Costco.

Fun.

sir_eccles

Which is why politicians spouting off about promising lower fuel prices during elections (or conversely blaming other politicians for high prices) is pretty damn close to meaningless, their influence is tiny compared to the global market.

It also depends what is meant by generating more fuel. I was always under the impression that you can drill and pump as much crude as you want, the bottleneck is refinery capacity. There is little interest in hugely increasing capacity as the oil companies would rather have control of limited supply and high demand.

Apparently three big refineries are offline right now for maintenance http://www.nhregister.com/business/2...s-prices-spike

Mr Weeze

It's illegal to export oil (Canada excepted). Distillates are fair game though.

Pulaski

Weird/ interesting. I did not know that.

Mr Weeze

It was legislation brought in after the oil shock in the 70s, and up until recently has not been an issue, really. I can't remember if there is an exemption for Canada or it is barrel for barrel swaps. But you can sell refined products internationally.

scrubbedexpat091

Been pretty stable where I am north of the border. With exchange rate its running about 5.50/per gallon US.

Michael

The refineries love the law and are lobbying against repealing it and the oil companies are lobbying to repeal the it.

Another interesting thing is that Louisiana crude oil is selling at about $9 a barrel below Brent crude on the world market since the oil companies have figured out a way to get WTI crude to the gulf coast creating a glut for gulf coast refineries.

And the glut on the Gulf Coast is likely to grow. In January, the southern leg of TransCanada Corp.'s Keystone pipeline is set to begin transporting 700,000 barrels a day of crude from the storage tanks of Cushing, Okla., to Port Arthur, Texas

Globally, the surge in supply and tumbling prices are attracting notice. On Monday, a delegate to the Organization of the Petroleum Exporting Countries said Saudi Arabia is selling oil to the U.S. for less than it would fetch in Asia. Nonetheless, the Saudis have continued to ship crude to refineries they own in Texas and Louisiana, according to U.S. import data, further driving down prices.

U.S. Oil Prices Fall Sharply as Glut Forms on Gulf Coast

Mr Weeze

I've not had a look to see what position the integrated oil companies are taking - I would imagine they are trying very carefully to appear neutral.

There is a margin there to be had, and someone is going to get it - is it the upstream oil companies or the downstream refiners? Currently it is the downstream refiners, and as to what they use that extra income for I do not know - they won't be looking to "subsidize" gas prices, and I'm not aware of any truly major refinery expansion projects. My guess is it would be to buy another refinery from another company and upgrade it .

Were it to move to the upstream segment, then that money would be used to fund further exploration and production activities, but that could be anywhere in the world. However, if the US price realized increased pretty rapidly it would fuel, at least in the short term, additional domestic expansion. There isn't that much additional capacity to increase the growth rate now - everyone is running to keep up as it is.

I should point out I used to work for an integrated oil company (and have worked downstream in the UK) and now I work for an upstream company. My views are my own etc. etc. etc.

Michael

I agree and suspect that refiners are either putting the money in their coffers, increasing dividends, or buying other refineries and none of that does much for the oil and gas industry.

However the refiners are claiming the law creates jobs since they are shipping refined products overseas.

Bob

So the bulk store place a couple towns away that was $3.15 a couple days ago went up to $3.39 this morning.

It seems everywhere else is in the $3.33 mark in town though.