The relationship between the price of diesel and gasoline

[KINGTUT]

I have been trying to figure out just what the relationship is between these two products. I know supply and demand is one thing, but their has to be some technical relationship, since as I understand it diesel is less expensive to produce than gasoline, which requires much more refining. I am worried about this since my local fuel jobber told me today that they were told to expect $4 per gallon gasoline within 60 days. Does that mean 4.50 or more diesel. Anyone with any refining or petroleum knowledge that can shed any light on this.

[Bluepowerpoky]

there is no relation ship they i guess dont have enougfh money for the rich selfs the are just too gready

[BuilderBob]

Originally Posted by KINGTUT

I know supply and demand is one thing, but their has to be some technical relationship, since as I understand it diesel is less expensive to produce than gasoline, which requires much more refining.

I don't believe you are correct in believing that the cost of fuel or gasoline is tied to the cost of refining.
The cost of refining is about the same when the cost of gasoline was under $1.00. Yes it has changed, and it does add to the cost of a gallon.
What has changed is the cost of crude. The cost of crude is based on supply & demand.
If there was no demand, we would buy crude for pennys, if demand were higher, than the cost of crude would be $$$.

[BigRed CC Dually]

Raise the price of diesel and relatively few complain. The truckers and companies that use diesel pass on the cost to their customers. Raise the price of gasoline and many more consumers see the increase directly and complain. Why is the price high for either? Because that is what the market will bear.

[Hook'em Horns!]

Originally Posted by BigRed CC Dually

Raise the price of diesel and relatively few complain. The truckers and companies that use diesel pass on the cost to their customers. Raise the price of gasoline and many more consumers see the increase directly and complain. Why is the price high for either? Because that is what the market will bear.

Diesel jumped 10-20 cents here in the last couple of days. Refinery went up in Big Springs, but that's for west TX, 300 miles away.

[FleetMan]

Don't overlook the commodities speculators who jack up the price based on every imaginable excuse they can devise. A number I'd like to see is the differential between what the producer of that barrel of crude collects and what the speculator gets when he sells it to the refiner. Remember the old time movies with Snidley Whiplash, the bad guys were always the bankers and the lawyers ripping off the poor guy who was just trying to operate his little farm or ranch.

[Blue01F250]

and don't forget that ULSD costs MUCH more to produce than LSD did...

the cost of crude is ridiculious now compared to what it was -- and there was a refinery fire and explosion in TX within the last week which is gonna put a dent in the supply around here -- so all the speculators went nuts and are freaking out about demand being low for the spring/summer

[checkthisout]

Originally Posted by FleetMan

Don't overlook the commodities speculators who jack up the price based on every imaginable excuse they can devise. A number I'd like to see is the differential between what the producer of that barrel of crude collects and what the speculator gets when he sells it to the refiner. Remember the old time movies with Snidley Whiplash, the bad guys were always the bankers and the lawyers ripping off the poor guy who was just trying to operate his little farm or ranch.

Bingo!

I am amazed at how many people outright ignore this factor.

It's the only factor there is.

Lots of accredited investors lost money in the Stock Market or their returns have fallen flat and they are now looking for somewhere else to put their money.

Oil and Food are going to skyrocket in price as the stock market tanks lower and lower because of this. These items provide guaranteed returns. What are you going to do? Not eat or go to work?

The simple solution is to reregulate the commodities exchange and not allow people to purchase the product who don't plan on burning it.

Problem solved.

[Super_Dave]

No one is even considering the devaluation of the dollar on the global market? Quite simply, it takes more dollars to buy crude now.

[roofeditor]

Originally Posted by FleetMan

Don't overlook the commodities speculators who jack up the price based on every imaginable excuse they can devise. A number I'd like to see is the differential between what the producer of that barrel of crude collects and what the speculator gets when he sells it to the refiner. Remember the old time movies with Snidley Whiplash, the bad guys were always the bankers and the lawyers ripping off the poor guy who was just trying to operate his little farm or ranch.

This is on a world wide basis and no president, no party, no regulator can even slightly stop this.

[Super_Dave]

+1

It's a huge market. And there are speculators and companies on both sides of their wants for an up or down market.

[roofeditor]

Originally Posted by checkthisout

Bingo!

I am amazed at how many people outright ignore this factor.

It's the only factor there is.

Lots of accredited investors lost money in the Stock Market or their returns have fallen flat and they are now looking for somewhere else to put their money.

Oil and Food are going to skyrocket in price as the stock market tanks lower and lower because of this. These items provide guaranteed returns. What are you going to do? Not eat or go to work?

The simple solution is to regulate the commodities exchange and not allow people to purchase the product who don't plan on burning it.

Problem solved.

Regulate world wide sales? Oh well lets see, how would you plan to do that. If regulated to no buying oil on the spot in the NY exchange, I simply buy in the London exchange.

In all fairness I should disclose that I invested as an OWNER not LLC partner in 20 natural gas wells last year that trade on the spot market and some have also hit oil as well as gas. How this all happens is way more complicated than simply buying crude, refining it, and then selling it at the pump. it is at times sold on PAPER many times in one day well before actual delivery. The market right now has TOO much crude and not enough delivery and refining. However for some really odd reason lack of refining and delivery is driving the crude price at least 25% more than it really should be.

Think none of us have any control over this? If every person in the USA traded in his/her PU that is rarely if ever used as a real truck, and if every person traded in his/her Suburban/Expedition that is also rarely used for it's intended use, for a more reasonable MPG unit the bottom would fall out of the oil market.

Do the math. How many PU/SUVS getting 12 mpg are there? Replace them with something getting 25? or a VW TDI or new Honda getting 50?

Stupid bunch of morons in Detroit can't build a V-6 Diesel 6 speed auto F-150 that gets 30 MPG? WE Can't match VW or Honda?

Coal? We are the worlds Saudi Arabia!

Nuclear Power? We invented it!

Solar power? I'm running a 56 KW power plant on a business this second and installing a 17KW unit in my back yard shortly.

We CAN beat the oil companies at their own game but just chose not to because of APATHY.

Last fall I went to Europe (Spain, France, Italy, Germany) to look at solar power over there. Typically they are passing us quickly. Nuclear power, France is making 85% of theirs. And gas prices there are in the $7.00 a gallon range.

So when it hits $7.00 here and it costs $350 to fill up your F-350, think it might start to sink in that changes must be made starting as the basic user/buyer?

Rant off!

[roofeditor]

Originally Posted by Blue01F250

and don't forget that ULSD costs MUCH more to produce than LSD did...

the cost of crude is ridiculous now compared to what it was -- and there was a refinery fire and explosion in TX within the last week which is gonna put a dent in the supply around here -- so all the speculators went nuts and are freaking out about demand being low for the spring/summer

Think about this. Refinery down mean LESS refining CAPACITY RIGHT? Now LESS refining CAPACITY should mean that there is an EXCESS of crude RIGHT? Now with an EXCESS of crude there should be a drop in crude prices RIGHT? But no by some nonsense BS EXCESS DEMAND for crude results in INCREASE prices in crude???? Can we still say *** here? That just doesn't add up.

[roofeditor]

Originally Posted by Super_Dave

No one is even considering the devaluation of the dollar on the global market? Quite simply, it takes more dollars to buy crude now.

Is the dollar the measuring standard or is the Barrel the measuring standard? As the dollar falls against the EURO it takes more dollars to buy a EURO therefore it takes more dollars to buy a barrel of oil.

So as you imply, had oil really gone up that much or has the dollar's VALUE gone down that much? Hmmmmmmmm!

[Niner1190]

Originally Posted by roofeditor

Do the math. How many PU/SUVS getting 12 mpg are there? Replace them with something getting 25? or a VW TDI or new Honda getting 50?

Agreed

Stupid bunch of morons in Detroit can't build a V-6 Diesel 6 speed auto F-150 that gets 30 MPG? WE Can't match VW or Honda?

it takes a few years to develop a vehicle. I hear it is coming in 2009/2010

Coal? We are the worlds Saudi Arabia!

Not practical for anything other than coal fired electric plants, which is where most of the electric energy in the US comes from.

Nuclear Power? We invented it!

Agreed, we should open some new plants, but everyone is so scared after 3 mile island they don't want them near where they live and the "environmentalists" get all upset.

Solar power? I'm running a 56 KW power plant on a business this second and installing a 17KW unit in my back yard shortly.

High cost, relatively short life, for not too much output. Unless you are talking about the mirror fields. I think wind power is a more viable option.

We CAN beat the oil companies at their own game but just chose not to because of APATHY.

Last fall I went to Europe (Spain, France, Italy, Germany) to look at solar power over there. Typically they are passing us quickly. Nuclear power, France is making 85% of theirs. And gas prices there are in the $7.00 a gallon range.

The US has been built on cheap energy, now that China and other nations are developing and using some energy we are startign to feel the pain of our resource hogging.

Just some comments on your comments. Not trying to invalidate your opinion, because you make a lot of good points, just adding my personal 1/50 of a dollar.