Gas price drop hits 30 straight days as oil prices continue collapse

finance.yahoo.com

32 points·MilnerRoute··9 comments

Likely a dumb question:

Many years ago when gas finally went above $1.00/L (Canada), the Brent crude index followed it 100:1 almost exactly. When Brent crude was $130 the price at the pumps was $1.30. When it was $99, $0.99/L.

Why is it now that gas is $1.85/L when crude is $100?

I know I didn’t factor an exchange rate and this isn’t really the best index to compare, but why is it so so different?

Two major things I see: have to normalize the value of money in real dollars to adjust for inflation - so years ago $1 is not the same value as today.

Secondly crude is not gas, gas is refined crude. Refiners are not adding capacity, actually there’s been a decline so there is a bottleneck there. Refineries might also now cost more to operate now due to .. well rising energy prices for one, but at least one other factor might be (not sure if this is true, but plausible) more stringent regulations on environmental pollution from the refining process.

It's fair to say refining capacity has been systematically reduced to create a bottleneck for the purposes of price manipulation.

Refineries have been running at ir near capacity for the last 20 years with no expansion in capacity. Any downturn or lack of demand has however been used as an opportunity to reduce capacity.

https://www.eia.gov/todayinenergy/detail.php?id=48636

There's no competition because demand outstrips supply.

Can only imagine people trying to scrape Biden stickers off the pumps

I'm sure it's your imagination. They've already moved to inflation is Biden's fault. They don't have time to fix their past mistakes

_thats the joke_.jpg

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