Many years ago when gas finally went above $1.00/L (Canada), the Brent crude index followed it 100:1 almost exactly. When Brent crude was $130 the price at the pumps was $1.30. When it was $99, $0.99/L.
Why is it now that gas is $1.85/L when crude is $100?
I know I didn’t factor an exchange rate and this isn’t really the best index to compare, but why is it so so different?
Two major things I see: have to normalize the value of money in real dollars to adjust for inflation - so years ago $1 is not the same value as today.
Secondly crude is not gas, gas is refined crude. Refiners are not adding capacity, actually there’s been a decline so there is a bottleneck there. Refineries might also now cost more to operate now due to .. well rising energy prices for one, but at least one other factor might be (not sure if this is true, but plausible) more stringent regulations on environmental pollution from the refining process.
It's fair to say refining capacity has been systematically reduced to create a bottleneck for the purposes of price manipulation.
Refineries have been running at ir near capacity for the last 20 years with no expansion in capacity. Any downturn or lack of demand has however been used as an opportunity to reduce capacity.
If your landlord raises your rent 4x, and then drops it to only 2x after a few months, does that prove your landlord is working towards your goal of spending less?
I'm from Brazil and we have a right-wing politician, and the same argument is running around for the same reasons. Maybe it's not a world wide effect but it sure involves too many variables to attribute it all to one actor. But if it goes up you can bet the opposition will say its his fault, and if it goes down you can bet the opposition will say it is not his fault. Depends on how self-aware the person you're talking to is, and that skill is useless on the internet as it makes you unsure about your convictions.
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[ 3.3 ms ] story [ 38.7 ms ] threadMany years ago when gas finally went above $1.00/L (Canada), the Brent crude index followed it 100:1 almost exactly. When Brent crude was $130 the price at the pumps was $1.30. When it was $99, $0.99/L.
Why is it now that gas is $1.85/L when crude is $100?
I know I didn’t factor an exchange rate and this isn’t really the best index to compare, but why is it so so different?
Secondly crude is not gas, gas is refined crude. Refiners are not adding capacity, actually there’s been a decline so there is a bottleneck there. Refineries might also now cost more to operate now due to .. well rising energy prices for one, but at least one other factor might be (not sure if this is true, but plausible) more stringent regulations on environmental pollution from the refining process.
Refineries have been running at ir near capacity for the last 20 years with no expansion in capacity. Any downturn or lack of demand has however been used as an opportunity to reduce capacity.
https://www.eia.gov/todayinenergy/detail.php?id=48636
There's no competition because demand outstrips supply.