US Fuel Prices May Be Volatile After Northeast US Refinery Closures

Right now, speculation isn't the biggest issue, it is medium term concerns because of the way the industry works. BP for example doesn't just go to a crude oil depot and give its refinery some crude like you do for gas. Because the volumes are so much higher, they have contracts that go out, sometimes for years. So what you may consider speculation is more often than not just the industry including the level of risk into the costs. That isn't to say that speculation doesn't play a part, but in most cases, it isn't as big a factor as you might think.

Right now some of the bigger risk factors include the supply of oil from the middle east, which are at risk right now because of events in Iran. Even though the US doesn't buy from Iran, oil prices are global in nature, and the supply of oil from iran will cause shortfalls in supply in europe who would then make up that shortfall by purchasing more oil from traditional US suppliers.

And before anyone says, screw europe, that is our oil, one of the items that the United States put into the WTO is a requirement that once a country opens up specific resource sales (not all, but oil is one of them, bulk water is another) to international trade, the nation cannot then close it down due to global situations. The US put that in to prevent say an embargo against the US alone. (the language is NOT quite like I said it is, but that is the impact).

Ironically, for all of peoples screaming about Keystone XL, the impact of it would be to REDUCE longer term supply risk, and therefore bring crude prices down, and at the same time locking control of that supply to US interests. Oh well.

Paul

Only the policies haven't changed, we are still pushing for the lowest price for oil possible, when we actually should be pushing for HIGHER prices, but those higher prices come with a catch, that the higher prices go into development of alternatives.

We talk about getting off of oil, but guess what, the lowest price isn't going to facilitate that transition, only higher prices will. If the price of gas is too low, then the investment costs of alternatives will make it such that alternatives will never arrive, (and sorry, the token volt is NOT arrived)

As for the nation article,

basically the gist of that article is that 'we are basically ripping off the canadians because they have nobody else to sell it to so we are forcing the price down'. Well guess what, if that pipeline goes to BC, not only does the price still go up, but the US loses control over who the eventual customer is, so the US loses either way. WOW!!! now that is smart thinking.

Now next time someone is ripping the US off on something, I take it you are going to be fine with that because you are ok with doing that to other nations. (what goes around, comes around).

the industry doesn't think long term, that is the problem. they only think in short term supply issues, because that is what fits their models.

and yet consumers are as much a part of the problem as are the companies. How many people have actually looked at alternatives? Are people buying smaller cars that consume less gas? Hell no, they want bigger and badder, because that is the american way. Well you can have the american way, but you have to pay for it, and right now, that is with unpredictable fuel costs.