But since distillate inventories are reported on a weekly basis, such a move would be quite transparent. I think most refiners would love to make more distillate, but they have contracts with gasoline customers that must be satisfied.  

Here in San Diego, Diesel fuel is 10-15c more than premium gasoline.   Diesel is $2.70 or so and regular unleaded $2.25.

That's very unusual in my observation.

Excellent EROEI !

Alan

But if there is no evidence of conspiracy, and you can't even come up with a hypothetical of how the conspiracy would be pulled off, on what basis do you suggest that a conspiracy is taking place? With such a burden of proof, I could claim conspiracy about anything and everything.

The oil and gas reporting requirements are pretty stringent. Inventories and utilization are reported on a weekly basis. If someone was withholding product in order to influence prices, it would be very difficult to do that without it being very obvious.

Again, I am not suggesting that the market can't be influenced. The president of Iran has made his country a lot of money by doing it. Saudi Aramco is big enough to do it. But no U.S. oil company is big enough to pull it off. They watch the markets go up and down; they don't cause them to go up and down. Otherwise, the industry would not be cyclical.  

I don't think it is necessary to have blatent illegal collusion between the heads of the major oil companies in order for them to attempt to exert downward pressure on prices. The reason why outright collusion isn't necessary is that they all had a common interest in keeping Republican control of Congress. So rather than a conspiracy, in the narrow legal sense of the word, if it did occur, it would more likely be various actions taken independently due to theconfluence of similar self-interests. Nothing illegal about that.

While I think it is absurd to think that Big Oil can control prices at will, neither do I think it impossible for a producer of a product to influence the price at which his product sells for within some  narrow range, particularly if it is only for a short period of time.

This can be done through a combination of increasing supply and lowering profit margins. When this is done internationally, it is sometimescalled 'dumping', as was done when the Japanese dumped huge amounts of low-priced steel onto the American market during the 1970s.

 While I don't know claim to know enough about the current gasoline situation to say this actually HAS occured, I don't see why it would be theoretically impossible for Big Oil to do a similar sort of thing with gasoline in the run-up to the election. Again, not total price manipulation, but a gentle downward pressure for a short period of time.

There are probably various other little things that can help keep supplies up, such as deferring scheduled refinery maintenance and construction outages until after the election, and in general making extra sure the nothing happens to redude gasoline output.

I would imagine that to demonstrate that Big Oil has put some downward pressure on gasoline prices in the run-up to the election, one would (as a minimum) have to compare gasoline consumption, gasoline inventories, total refinery gasoline output, and gasoline profit margins for say the period May thru July with the period August through October. But even if one did that, the picture might not be all that clear, as many other factors probably come into the picture, such as the role of speculators, etc.

It gets down to the old Means, Motive, and Opportunity. While I don't think there can be much debate about whether Big Oil has the motive to keep prices low before the election,  the means and opportunity are much more difficult to detemine. So, it don't think there will ever be evidence of price manipulation that would be convincing enough to be admissible in a court of law.

Do you really think they would let Exxon loose billions by cutting oil prices?

Besides, it is a basic ingredient in the blood of any 'Big Business' mogul or mogul-to-be to maximize profits. Trying to cut prices against a market of rising prices would absolutely go against the grain of these people. A totally ephemeral connection to possible advantages if it helps so-and-so get elected just doesn't seem like enough incentive to go against the grain.

And I'll ask another question, which I'm asking to someone who is advocating a position, what % of  global oil contracts are publicly available?

I don't know that anyone would make their contracts publicly available, and I doubt that such is even legal. If you want to talk about collusion, having your competitor know exactly what you are paying for oil would certainly pave the way for that. It would give you unfair guidance on your pricing decisions.

I'll repeat, it defeats the purpose of long-term contracts to have them tied to the spot price.

No. The purpose of long-term contracts in this business is to secure suppliers, not prices. If you secure a supplier, the smart thing to do is to tie the contract to the market, because even if oil prices rise and you pay more, gasoline prices will rise along with it and protect your margins. But if you locked in a price, and the spot price fell, well you would be in the red pretty quickly. It just doesn't make good business sense to lock in a price, unless you are very, very confident that prices are going higher. Even then, if you are wrong you will probably lose your job.

If you're pumping oil out of the ground at ten dollars a gallon and have long term customers who know that and they don't tie the price down to something you can both live with it, well you know what that is Robert?

If you are pumping oil out at $10 a barrel, and your customer wants to pay you $20, I am going to tell him to get lost. I want to charge the market price, not some fixed price that may end up causing me to lose my shirt. Because remember, as oil prices go up, so does the $10 it takes me to pump the oil out of the ground.

Have the last word. I have said all I need to say on this issue.