Hey all --

So far I have not been able to find the answer to this question...One that has been asked by many. What has happened to the price of diesel fuel? Or better yet, why has it not gone back down, as is traditionally the case, once the winter months are behind us (heating oil)...

There have been some good threads recently about the cost of fuel and the comparison to gas and etc. and there have been some good reports linked on posts as well as some interesting graphs...but nowhere have I seen the answer to the question.

Why, this year, has diesel not gone down to considerably less than regular unleaded? It is June and it should have happened by now.

Thanks in advance for your input.

 

China and India are working overtime to ramp up their industrial infrastructure thereby sucking up much of the readily available global natural resources.

In addition to oil they are having an impact on the price and availability of metals. Steel, stainless steel and aluminum, and titanium are really taking a hit.

Don't forget the war effort (no politics). It takes a lot of fuel to support our military forces world wide.

Plus, I read just yesterday, two US refineries were shut down. Don't know the reason or which fuels they produced. It was just a quick blurb on Bloomberg.

 

Good questions and seemingly good answers (no disrespect kw). Now ponder this, I fueled up yesterday in town (So. Cal.) at a Unocal 76 station for $2.25 per gallon. The Texaco and Chevron stations across the street on opposite corners of the 76 station were at $2.47 & $2.49 respectively.

 

No disrespect taken Mr. Sandman.

BTW: I didn't say those were the only reasons. Huge, record oil company profits are a big reason as well. A very vicious circle it is.

China is second only to the US in daily oil consumption...as the populace of China moves from peddling rickshaws to driving...they will surely surpass us in short order.

Example: A huge amount of Venezuelan barrels per day have been diverted from the US to China shores.

And, you are not alone. The disparity of diesel prices are apparent here as well. Just in my little suburb of the suburbs of Dallas, fuel ranges $ 2.15 to $ 2.36....Go figure.

 

My local fuel stations (Chevron, Conoco/76, Independents) sell Diesel at $2.71 to $2.79 but the Conoco/76 station about 3-miles away, where alot of rigs fill up, sells for $2.31. Definitely worth the 3-mile drive!

In comparison, regular gasoline sells at about the same cost as Diesel now at most stations I see in LA. (Burbank, Glendale, Pasadena areas)

 

Drove down to Fla. Memorial Day weekend, Jersey tpke $2.09, returned this Sunday $2.13. Same story everywhere, passed on fueling up in Florida ($2.09), Traditionally higher than other states hoping to get $1.99 in S.C., guess what, $2.15. In the past Georgia was the state to fuel up in, well EL CHEAPO was not so Cheapo $2.15+.

On the bright side, holding speed down to 60/65 I broke the 20mpg barrier. 20.5, that was the best I could do.

For the first time I noticed a miss at idle a couple of times. I suspect the EGR valve. Plan on making an appointment to bring it in for some other work next week.

 

The reason is simple. I bought my first diesel last October. Just my luck. I know your all hoping I go back to gas so the prices go back down. Sorry, don't count on it guys.

 

Sometimes I wonder. I bought mine last Feb. Gas was about 1.80 or so and diesel was 1.45. Now gas is 1.97 and diesel is 2.17. I know you guys are freaking that it's so cheap, sorry. But it's really not, 18 months ago it was literally 72 cent per gallon less than now and that was in the winter too. OK, it's all my fault and "olfordsnstone" too, we are too blame, sorry. Really, I can't think of a good reason that gas is still less than diesel. Just cuz other places are using more oil doesn't mean that the oil we bring in here and refine here will be diverted to gas more than diesel, it comes out in different levels and diesel takes less work and additives, therefore it really should be cheaper. I'm a conspiracy theorist sometimes though and believe that it is some weird plan to raise inflation by costing ALL companies more in shipping (trucks and trains use diesel) therefore ALL companies who need to move commodities or use anything (everyone BTW) will have higher costs and will have to increase their sale prices to cover those costs and those costs will pass on to other companies who use their products and consumers who will demand more pay from the companies that they work for to make up for their increased spending which will cost their companies more and they will have to increase prices to make up for the extra payroll costs. All of this because the couple of oil companies that are left have decided to keep fuel costs at high levels and PROFITS at higher levels. OIL goes up 10%, fuel goes up 15%, then a week later OIL goes down 5% and fuel goes down 1% or sometimes not at all. This means that the EXXON/MOBIL's and BP's are making more profit (money to buy fancy houses for exec's) than EVER. OK, well that's my take on why diesel is still more than gas this year. Bottom line, they ram us cuz they can and we can't stop them. And they gov't won't cuz most of the gov't has some ties to oil and they like that profit too, so why would they stop it, not politics, but the real world. Time to convert the trains back to coal?????Nah, too much polution right?.......

 

And this is what I just don't understand. KW lays out some very good points...but be all those things as they may the fact still remains that as far back as I can remember diesel goes less than gas around April until November or so every single year. So even if this supply and demand thing and the war and etc and etc...then all prices are higher as a result...but higher should be relative. It is the time of year for diesel to be lower and if gas and diesel are both running higher then such is understood but diesel should still be lower, and it is not.

 

I second that!!!

 

What I didn't tell you is ...diesel is the fuel of choice for China & India. Three cylinder diesel vehicles like Toyota trucks are more than common. Diesel powered generators etc...sooo... not only is crude being diverted but, I have read, that refined US made diesel is also shipping overseas.

And remember....the US of A hasn't built an new refinery in many, many years. Decades, as I understand it. How many diesels of all kinds are on the road today compared to even 5 years ago? How many more homes are warmed by heating oil compared to 5 years ago? US diesel manufacturing capacity is max'ed out.

Simple rule of supply and demand.

BTW: The EPA boys have stifled the building of new power plants in the US as well...has your pay check increased by the same % as your energy bill? Typically not.

Home building in the US, over the last 5 years, has been at a record pace. They all require energy plus one diesel truck, or diesel VW it seems, in the drive way.

I am typically not a pessimist but, in 10 or 20 years rickshaws could be the transportation mode of choice.

There...how's that for a soap box?...ain't it amazing what a couple of late night beers can do. OK, well...maybe more than just a couple.

 

Today in the Dallas Morning News:

Beijing: A leading Chinese oil producer, CNOOC, is considering making a competitive bid to Chevron's $ 16.4 billion offer for Unocal, as soaring demand puts pressure on China to find new oil supplies.

IMO: If CNOOC is successful, more fuels historically targeted to the US market will be diverted to China.

Fact is, they must feed the industrial beast. If they do not buy Unocal it will be someone else. It is not intended as a financial investment for the $$$$. But for the oil.

China is awakening folks and I don't think they are gonna care much about global economic impacts or EPA like issues.

All of this, of course, is just a poor 'ol country boy's simple, honest opinion.

 

Well...that doesn't sound very promising for us, does it?

So, is our country going to wake up and build a few more refineries? Will that even help?

 

Hard to say...EPA issues may make it near impossible to build new ones on US soil.

Maybe when the yuan becomes new global currency...or when we have to burn the trees to keep our homes warm ...

BTW: Since I am going to be out of town for a few days (get to see my 60 month old grandchild for the first time) let me say this...

It is not so much synthetic fuels that we have a near immediate need for but, how 'bout synthetic politicians?

 

Watch FX's OIL STORM, it's a scary near truth possibility of a story.