State highway from Pemex City to Macuspana: road subsides at Km 19 leaving single track circulation only

Refineries compete with each other for oil to refine. There is less oil than refinery demand, so oil prices are going up even with refinery utilization dropping.

Refineries also compete to sell refined product. This is the slow-demand season for gasoline, and although cold weather seems to be beginning, we're nowhere near the peak of heating oil demand. So, to sell their refined product, refineries are undercutting each other.

The problem is so bad for refineries that at least two that I'm aware of have announced they've been operating at a loss. Obviously, that can't continue.

As winter comes on and heating oil demand goes up, and especially as summer driving season comes on, product prices will go up sharply.

In the long run, as oil production declines, we will begin to see refineries have to close. There won't be enough oil to keep all of them in operation.

Overall, over-supply of refineries will mitigate product prices for consumers for some time. This will help keep demand for oil high. It is sending the wrong signal to consumers about future supply.

It may have a lot to do with taxes and also a percentages thing...think about gas at say, $1.50/gal and $3.00/gal twice the price.

If the entire barrel were converted to gasoline, and the price at the pump was only related to the gasoline then at $1.50 the barrel would be worth $63. If at $3.00/gal then the barrel would be worth $126.

However, lets say... $0.50 per gallon is taxes - state, federal - but a flat tax on the gallon. Of that $1.50/gal, only $1.00 is the actual fuel cost and of the $3.00/gal only $2.50 is the actual fuel cost. See what's happened? The price you see - what you put into your car with the nozzle has increased 2 times, but hidden by taxes the actual price of the fuel has increased 2.5 times.

Percentages. Refiners are probably letting go of a bit of profit...there are others better in the know but imagine this for the time being: Pretend for a moment the refiners are getting the full price you see at the pump and that $1.50 and $3.00/gal translate to the $63/bbl and $126/bbl that I showed before. Now at $1.50/gal gasoline they may have been picking up crude at $43/bbl (then selling at the aforementioned $63) for a profit of $20/bbl. Then at $3.00/gal perhaps they're getting crude for $106/bbl (and selling at the aforementioned $126/bbl) for a profit of $20/bbl! (In this example!) They're making the same amount per barrel at $1.50 as they are $3.00/gal! They've eaten some of their potential profit. At $1.50/gal gas and $43/bbl crude they're making near a 50% profit...yet at $3.00/gal gas and $126/bbl crude they're only making 16% profit. Their profit margin has dropped like a rock.

Also, I think you're starting at the wrong place. I believe it's generally accepted that prices in the 90's were more in the $15 - 20/bbl range most of the time bringing you to more like a 5X to 6X frame of reference rather than 10X.

Here's a question. What is the price of a barrel of crude in the USA inventory?

Yes.

TPTB are desperate to hold the status quo.

Keep the Stock Market Up.

Keep interest rates where they're at.

Keep gasoline and cigarettes cheap.

All else follows.

Arkansaw of Samuel L Clemens