Comment by throwaway5752 | Hacker News Reader

Comment by throwaway5752 | Hacker News Reader

Parent Full thread

If you look at crude prices to pump prices, and it is very clear this summer is a manufactured shortage.

https://www.theguardian.com/environment/2022/apr/28/gas-pric...

Reflexive downvotes because you disagree is a loser's strategy. Here is the data for you own lying eyes to review: https://www.macrotrends.net/2501/crude-oil-vs-gasoline-price...

More background https://www.bloomberg.com/opinion/articles/2022-05-09/crude-... "From 1985 to 2021, the crack spread averaged about $10.50 a barrel. Even between 2004 and 2008, during the so-called golden age of refining, the crack spread never surpassed $30. It rarely spent more than a few weeks above $20. Last week, however, the margin jumped to a record high of nearly $55. Crack margins for diesel and other petroleum products surged much higher. "

That is with the coordinated SPR release. But sure, believe it's the invisible hand and the Jones Act!

(This is a clarifying question, not an oppositional one) -- would a potential response to a gap between crude and pump prices be lack of refinery supply? How are we able to rule that out? Or is it completely obvious?

My understanding is that refinery capacity is a significant problem.

I would encourage you to dig into why that is the case.

Any company that could refine oil faster would be able to make a ton of money by doing so. Do you have evidence for this grand conspiracy? How do you suppose it avoids the usual free-rider problem?

Maybe because nobody is going to invest megabucks longterm to create capacity only needed in the short term? (and may not even be needed)

In the chart linked here [0], section "Gasoline stocks (million barrels) and days of supply" each Petroleum Administration for Defense District has had flat supplies, indicating no especial need for additional refining capacity. In "US Regular All Formulations Gas Price/Consumer Price Index for All Urban Consumers: All Items in U.S. City Average" [1] the CPI adjusted cost of gasoline is somewhat high but still below where it was 2011-2015.

https://www.eia.gov/petroleum/weekly/gasoline.php

https://fred.stlouisfed.org/graph/?g=p93w

According to wikipedia [1]

The newest large refinery built in the US was completed in 1976 in Garyville, Louisiana. Since then, while some existing refineries have expanded, new refinery construction has faced significant barriers in environmental regulation, permitting, and local political opposition.

1: https://en.wikipedia.org/wiki/Petroleum_refining_in_the_Unit...

Reply on news.ycombinator.com