Diesel fuel cheaper than gas... Great! (but for how long)

[KNS]

I've noticed that diesel has been cheaper than gasoline, sometimes even cheaper than 86 regular like it used to be. What finally happened and can we expect the prices to go back up beyond the premium gas price?

[dd74]

Yeah. It's much cheaper in SoCal -- at least where I am. Enjoy it while it lasts before the price is artificially jumped up because of fire season, winter, the rainy season, or Halloween.

[sammyg2]

Supply.
Price of diesel will continue to drop over the winter, but not as fast as gas. Expect a 50 cent drop by january.

[KNS]

Sammy,

Thanks, I was hoping you would comment.

[jyl]

sammy is my muse on this stuff.

[dd74]

"Muse" LOL!

I'll believe it when I see it.

(muse is for musing)

[idontknow]

amuse is for amusing

[sammyg2]

It's a prediction, not a guaranty.

Demand is very low and should drop some more by year's end. Supplies are stockpiling.
Surplus of distillates, crude, all point to a 5 year low on retail.
Refiners are cutting production but won't cut much more because they need the cash flow to survive.

That is until cap and trade passes, then gas will shoot to $6.50 and keep climbing towards $10/gal over the next 8 years.

[GothingNC]

Diesel is about 10 to 15 cents higher then gas in NC

[dd74]

What in our lifetime is going to cause fuel of any sort to be $10 a gallon? That's just insane. No one will be able to afford to drive; maybe except the military.

[The Gaijin]

Cap and Trade is an excuse to add on more taxes (most likely to pay for health care "reform").

That and a couple of years of coming inflation and yes, we will see $10 a gallon gas soon enough..

[sammyg2]

Originally Posted by The Gaijin

Cap and Trade is an excuse to add on more taxes (most likely to pay for health care "reform").

That and a couple of years of coming inflation and yes, we will see $10 a gallon gas soon enough..

Yep. A big part of the cap and trade bill that is currently being considered will significantly raise taxes on crude oil producers and refiners.
If it passes and goes into effect, it will raise gas prices to an estimated $6.50 a gallon and then increase more every year fopr about 10 years.
They went after cigarretes and made the price go from under $1 as pack to over $5 a pack, just by making new taxes. Gasoline and diesel and jet fuel will be next.

The idea is to make fossil fuels so expensive that alternative energy sources will finally be competitive. It will also raise prices so high people will have to cut back and drive less, with tiny cars. And it wil lgive lawmakers a windfall increase in taxes so they can spend as muich as they want, but that will only be temporary as the destruction of the economy will kill the tax revenue when no one is working or buying anything.

That is how they plan to lower greenhouse gases.
The result will be a crippled ecenomy, radical and uncontrolled unemployment and inflation, most independent oil refining comanies will go out of business and the remainnig companies will have a monopoly.

Al that so the left can engineer and modify society to make it look the way they want. They want to change our lifestyles through taxation, severely punishing those who use gasoline.
That idea is doomed and will only result in massive fail exeeding everything we've ever seen before.

BTW, they are also planning to go after electrical generating compasnies and natural gas, expect those energy sources to douyble or triple in cost also.

[dd74]

Meanwhile, haven't huge reserves of oil been recently found in, IIRC the Colorado Rockies and off the West Coast? I'm not certain.

Anyway, do any viable news inks exist about this cap and trade bill against gasoline and diesel?

[sammyg2]

Originally Posted by dd74

Meanwhile, haven't huge reserves of oil been recently found in, IIRC the Colorado Rockies and off the West Coast? I'm not certain.

Anyway, do any viable news inks exist about this cap and trade bill against gasoline and diesel?

There is oil under the rockies but it's shale oil. Darn near worthless, it costs a great deal of money to extract it and it's as slow process. Not really worth the effort.

This just in:

Oil falls sharply with supplies on the rise
Crude falls sharply for second straight day on surging supplies; gasoline and other fuels fall
By Mark Williams, AP Energy Writer
On Thursday September 24, 2009, 3:52 pm EDT

Oil prices fell sharply Thursday for a second straight day as growing supplies of crude, gasoline and heating oil exposed how badly the recession has cut into energy demand.

Benchmark crude for November delivery fell 4.4 percent, or $3.08, to settle at $65.89 a barrel on the New York Mercantile Exchange. The contract tumbled $2.79 to settle at $68.97 on Wednesday.

Prices for gasoline and heating oil also fell sharply.

Oil prices have been pushed higher for months by the weak dollar and by strengthening equities markets, but analyst Phil Flynn of PFGBest said the fundamentals are increasingly hard to ignore.

A government report Wednesday showed a larger-than-expected buildup in crude supplies.

Oil demand fell by 3 percent, the government said, and gasoline supplies surged by more than 5 million barrels even though refineries took in 316,000 fewer barrels of crude each day.

Still, the U.S currency continues to influence prices because a weak dollar effectively makes dollar-based crude cheaper.

Investors watched the opening Thursday of a two-day meeting in Pittsburgh for the world's 20 most powerful leaders. News from that meeting could sway the value of the dollar and oil.

The Energy Department's Energy Information Administration said Thursday in its weekly report that natural gas inventories held in underground storage grew by 67 billion cubic feet, which was in line with expectations.

Still, natural gas supplies are abundant. Levels are 16 percent above the five-year average, according to the government data. Prices by early this month had fallen to seven-year lows, far enough that there has been a surge to buy natural gas futures.

That trend continued Thursday and prices rose more than 3 percent.

Prices at the pump edged lower, falling 0.6 cents overnight to $2.534 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are now 8.9 cents below levels of a month ago and down $1.181 from year ago levels.

In other Nymex trading, gasoline fell 6.83 cents to settle at $1.6366 per gallon and heating oil for October delivery fell 7.8 cents to settle at $1.6814 a gallon. Natural gas rose 9.5 cents to settle at $3.955 per 1,000 cubic feet.

In London, Brent crude fell $3.17 to settle at $64.82 on the ICE Futures exchange.

Associated Press writers George Jahn in Vienna and Alex Kennedy in Singapore contributed to this report.

BTW, I don't currently own any oil or refiner stocks. maybe early next spring but not now.

[trekkor]

I was very surprised to see such a wide variance in pricing along I-5 last weekend.

over the span of about 50 miles we saw diesel at $3.15, then $2.71 and then as high as $3.35 at Grapevine.

Why?



KT