Gas prices down but diesel up...

KNS · 11-16-2014, 03:58 AM

We've all seen gas prices falling which is great but I had been noticing that diesel has stayed the same and yesterday I noticed that it went up in price. I'd be pissed if Id bought a diesel.

Sammy..?

Rick V · 11-16-2014, 04:38 AM

Heating fuel season, that is always the excuse. Seems they can't make heat fuel until it gets cold then they have to make lots of excuses to jack the price up. You know how the oil cartel operates

Porsche-O-Phile · Porsche-O-Phile's Garage

Whatever the market will bear...

Chocaholic · 11-16-2014, 05:15 AM

Quote:

Whatever the market will bear...

A philosophy that applies to most industries. But not this one. The market is captive with little alternative to driving the vehicle sitting in the driveway.

ckelly78z · 11-16-2014, 05:49 AM

I fixed up my daughters old car that was sitting behind the house with a blown head gasket, It's a Saturn twin cam 2.0 liter, with many nice options including sunroof, leather, trac control, and nice stereo. it gets around 30-32 mpg using crap 87 octane gas @ $2.89 a gallon, while my diesel 4x4 superduty F-250 gets about 17 mpg driving the same commuting route using $3.75 a gallon diesel. You do the math, I'm saving about $50 a week.

I've been in my 401k at work for about 15 years now and have seen some nice gains, and took a few hits as well, however, investing more aggressively than I probably should be at my age (49 yo), I have been able to achieve 20% returns for the last 5 years in a row, while contributing 15% with 3% matching. Needless to say, as of right now, my account is WELL up into 6 figures with 10 years to go, and I will get a company pension for 25 years of service to boot.

I have a good outlook on the economy, but I have no debt, and don't buy new cars, have lived on a farm for 20 years now, and hope to be here another 30 years, and don't spend frivolously.

strupgolf · 11-16-2014, 06:14 AM

With the drop in retail gas prices, the oil companies are not getting the big profit they're used to. So what to do? Lets keep the profit margin up on diesel and still make tons of money. Diesel is very cheap to make, cheaper then gas. They dont want to see profits drop too much. as the trucking industry is hugh, and they know they can't get by without it. At times " lets just screw some of the people all of the time, not just all of the people all of the time".

Porchdog · 11-16-2014, 06:20 AM

My understanding is that there is limited capacity to produce the currently mandated low sulfur diesel, and that not all the crude on the market is suitable. Gasoline refineries are a bit more flexible and demand is down.

Bugsinrugs · 11-16-2014, 06:37 AM

Diesel is also taxed at a much higher rate then gasoline.

Jrboulder · 11-16-2014, 07:37 AM

Back in the 1930s everything ran or coal or gasoline and "distillate" was just a byproduct of all this gasoline production. They started running trains, planes, ships, trucks and every other vehicle of industry on this cheap byproduct. Now that everything runs on light fuel oils and it's all working close to record levels it would make sense that demand is high.

Maybe we're also starting to see the results of better fuel economy. For most of the last several years gas had been relatively expensive and that has a lot to do with new car purchases.

kaisen · 11-16-2014, 08:16 AM

I text this photo to Speeder three days ago, but it's fitting here. Diesel in Minneapolis is running around $1.10-1.20 a gallon more than regular unleaded. That's over 40% more. How would it ever pencil to buy a new diesel vehicle? It wouldn't.

Tilikum Turbo · Tilikum Turbo's Garage

Just think of all the suckers who will be going even this weekend to buy that big V-8 truck/Suv...and when gas goes again to $4-5/gallon, it will be crying to time again.

We never learn...

kaisen · 11-16-2014, 08:53 AM

I would suppose it's whether you actually need a big V8 truck/SUV or whether you could have made do with a little 4 cylinder car.

Car or truck, diesel right now isn't the right answer for most

ben parrish · 11-16-2014, 09:23 AM

Car or truck, diesel right now isn't the right answer for most[/QUOTE]

It hasn't made financial sense for years now...unless you plan to put over 300,000 miles on a vehicle.

speeder · speeder's Garage

Here in CA, I saw diesel yesterday for $3.55 a gallon. Premium gas, (which any modern vehicle I like burns), is at about $3.45. So that would be a Minnesota problem. Not sure what's going on up there.

speeder · speeder's Garage

Quote:

Originally Posted by kaisen

I would suppose it's whether you actually need a big V8 truck/SUV or whether you could have made do with a little 4 cylinder car.

Car or truck, diesel right now isn't the right answer for most

99% of truck and SUV buyers around here could have gotten by with either a small 4-cylinder car or a large 4-cyl. car. It doesn't take a 7k lb. vehicle to transport a 160 lb. person down a freeway alone.

Jrboulder · 11-16-2014, 09:42 AM

Quote:

Originally Posted by speeder

99% of truck and SUV buyers around here could have gotten by with either a small 4-cylinder car or a large 4-cyl. car. It doesn't take a 7k lb. vehicle to transport a 160 lb. person down a freeway alone.

But apparently it takes a 7k lb V8 to move a 320 lb person down the freeway

ckelly78z · 11-16-2014, 11:08 AM

Quote:

Originally Posted by speeder

99% of truck and SUV buyers around here could have gotten by with either a small 4-cylinder car or a large 4-cyl. car. It doesn't take a 7k lb. vehicle to transport a 160 lb. person down a freeway alone.

I have a 30 foot camper, a 4 horse trailer, and generally cut firewood and fill the truck and a 16 foot utility trailer several times a year. I also go long distances to pick up project cars, and the occasional 10,000 lb scrap steel run to the recyclers, I guess I'm in that 1% that actually do need a 7000 lb truck with heavy duty suspension, 4x4 and diesel. I decided to fix up my daughter's old Saturn because of the difference in diesel and gas prices now. 2-3 years ago, there was maybe only 15-20 cents difference.

Tilikum Turbo · Tilikum Turbo's Garage

Quote:

Originally Posted by speeder

99% of truck and SUV buyers around here could have gotten by with either a small 4-cylinder car or a large 4-cyl. car. It doesn't take a 7k lb. vehicle to transport a 160 lb. person down a freeway alone.

"get-cha an extra case of beer for that one!"...quote from Apocalypse Now

kaisen · 11-16-2014, 11:21 AM

As speeder will attest, you don't need a 3,000 pound 35mpg gas powered car to transport a 160 lb person down a freeway alone. A 500 pound motorcycle will do it just fine.

sammyg2 · 11-16-2014, 01:08 PM

I drive what i want, i drive what I like to drive. I can afford it.
I would not enjoy driving a little POS sheet box nothing on the freeway. I enjoy driving my big pick-em-up.

The typical oil refinery produces 2 gallons of gas for every gallon of diesel.
We can tweak that a little but maybe by 10% at the most.

So the bottom line is, the gasoline market is currently way over-supplied and the diesel market is stable.
Refineries are adjusting and maximizing distillate production as much as possible, but there's only so much they can do.
Last I heard gasoline wholesale margin was losing about 5 cents a gallon and diesel was making 20 cents a gallon.

BTW, this is not a surprise. Certain refineries I am aware of already have projects in place to drastically increase diesel and cut gasoline production (50/50), but it takes years and a whole bunch of millions to accomplish that.

I believe the gas prices have almost bottomed out and will be headed back up in a while, slowly.
Excerpt in January in California, we're going to see a big sudden jump (thanks idiot voters).