Introducing the Oil Industry's New Junk Product: Gasoline

[thackney]

Introducing the Oil Industry's New Junk Product: Gasoline
https://www.bloomberg.com/news/articles/2018-11-14/introducing-the-oil-industry-s-new-junk-product-gasoline

Once the oil industry’s star product, gasoline is now losing oil refineries money in Europe and has plunged in value against diesel, its main competitor.

How did this happen? Here’s a run-through of what’s taken place in a more than $1 billion a day business and how the world’s oil refiners might respond.


The simple answer is that gasoline supply has massively outpaced demand. That’s illustrated in data from the U.S. — by far the world’s single largest gasoline consumer — which shows stocks at record seasonal highs since the start of September.

A second issue is the kind of crude oil the world is pumping. Where output is growing fastest, notably in the U.S., the extra barrels have tended to be lighter and therefore rich in gasoline. By contrast, the supply of diesel-yielding oil from the likes of Venezuela and Iran has been more constrained.

Gasoline’s value against diesel started collapsing around August and hasn’t stopped sliding since. In Asia, Europe and even the U.S. — which consumes over 9 million barrels of gasoline a day — diesel is now around an average of about $70 a ton more expensive....

[Fishrrman]

"The simple answer is that gasoline supply has massively outpaced demand. That’s illustrated in data from the U.S. — by far the world’s single largest gasoline consumer — which shows stocks at record seasonal highs since the start of September."


If this is the case, why aren't prices falling at the pumps?

[IsailedawayfromFR]

"The simple answer is that gasoline supply has massively outpaced demand. That’s illustrated in data from the U.S. — by far the world’s single largest gasoline consumer — which shows stocks at record seasonal highs since the start of September."


If this is the case, why aren't prices falling at the pumps?

Just filled up 2 days ago at Samsclub for $2.14/gal.

It is the cheapest I have seen it in years.

[thackney]

"The simple answer is that gasoline supply has massively outpaced demand. That’s illustrated in data from the U.S. — by far the world’s single largest gasoline consumer — which shows stocks at record seasonal highs since the start of September."


If this is the case, why aren't prices falling at the pumps?

Two points, first prices are falling.  I saw $2.11 yesterday east of Houston.



But mostly this article was talking about worldwide demand not just the US.  In the US we use a much higher percentage of gasoline for our fuel.

[Smokin Joe]

Just filled up 2 days ago at Samsclub for $2.14/gal.

It is the cheapest I have seen it in years.

Cheapest I have seen across six states is 2.77 9/10 in Utah.

[thackney]

Cheapest I have seen across six states is 2.77 9/10 in Utah.

Texas & Oklahoma are seeing some decently priced gasoline these days.

https://www.gasbuddy.com/GasPriceMap?_ga=2.196514090.763043237.1542285726-1467085174.1542285725

Even dropping below $2 in a few places:
https://www.gasbuddy.com/GasPrices/Texas

[Smokin Joe]

Texas & Oklahoma are seeing some decently priced gasoline these days.

https://www.gasbuddy.com/GasPriceMap?_ga=2.196514090.763043237.1542285726-1467085174.1542285725

Even dropping below $2 in a few places:
https://www.gasbuddy.com/GasPrices/Texas

It will be a while before that wave breaks this far north....https://www.gasbuddy.com/GasPriceMap?z=4&lng=-92.88155956741299&lat=32.90064012362086 (this county is in the $2.87-$3.05 band, as are most of the places I was in the last 3000 miles. some are more expensive, only one less--Price, Utah, Walmart was 2.77 9/10 for 85 octane. I figured with an engine that normally ran at 2000 ft. Above Sea Level, the lower octane wouldn't hurt at 6K and higher. It didn't.

[jmyrlefuller]

It will be a while before that wave breaks this far north....https://www.gasbuddy.com/GasPriceMap?z=4&lng=-92.88155956741299&lat=32.90064012362086 (this county is in the $2.87-$3.05 band, as are most of the places I was in the last 3000 miles. some are more expensive, only one less--Price, Utah, Walmart was 2.77 9/10 for 85 octane. I figured with an engine that normally ran at 2000 ft. Above Sea Level, the lower octane wouldn't hurt at 6K and higher. It didn't.

Even the tax-evading reservation gas is still hovering above 2.70 here. It's been stuck in the 2.90s for years now.