Think more supply will drop the price of gas?

Discussion in 'General Discussion' started by DKR, Apr 24, 2012.

  1. DKR

    DKR Raconteur of the first stripe

    I used to buy into the bigger supply = lower gas prices.

    Then I saw this

    At midnight on April 11, a 940-foot tanker maneuvered into the dock at the oil terminal in Valdez, Alaska, carrying an unusual cargo for a returning ship.
    Sloshing in its tanks were more than 12 million gallons of Alaskan crude, at least a quarter of the cargo the ship had carried away from Valdez two weeks earlier.
    The Alaskan Explorer had sailed to a Washington refinery, but was forced to return to Alaska with 300,000 barrels because the onshore storage tanks were too full to accept the oil, Anil Mathur, CEO of the Alaska Tanker Co., which owns the ship, confirmed last week

    Source: Abundant crude supply doesn't push gas prices down

    So - refinery tanks are so full, they can't take any more...and yet, gasoline is still high.

    Worse - for Alaskans - what if the refinery's on the West coast decide that oil from North Dakota is cheaper and stops buying oil from Alaska? By law, we cannot sell Alaskan oil overseas....

    Oh, snap.
  2. TheEconomist

    TheEconomist Creighton Bluejay

    This would cause Alaskans Oil Companies to lower prices. Someone would think hmm, we need to open another refinery to process this cheap oil. Of course this only works in a free market...
    Gator 45/70 likes this.
  3. BTPost

    BTPost Stumpy Old Fart Snow Monkey Moderator

    DKR, this issue is NOT that there is No Market for alaskan Oil. The issue is that one of the MAJOR Refineries in Washington State, had an explosion and fire, a few months back and is only running at 50% of capacity because of the damage. Their Crude OIL Tanks are full, because they can't process at the Rate, that they normally do. This is the SAME Refinery supplies 50% OF THE GASOLINE, back to the State of Alaska, because there are NO Refineries in the State of Alaska that make Gasoline. It is ALL shipped in from the West Coast Refineries. The fact that the FairBanks Refinery does NOT refine Gasoline, and has also shutdown one of it's two Cracking Towers, is significant, as well.
    ...... YMMV.....
  4. TheEconomist

    TheEconomist Creighton Bluejay

    Great info, as usual, Bruce. When it comes to the Pacific Northwest you are the man to talk to!
    Redneck Rebel likes this.
  5. TXKajun

    TXKajun Monkey+++

    Last week, gas here in SENM was $3.89/gal. Today it's $3.55/gal. 34 cent drop in a week. That doesn't seem like a bad thing until you think back 8 months or so when gas was $2.85/gal. Yeah, raise the prices until we squeal, then drop down and we're supposed to be greatful. Yeah, right.

    STANGF150 and oldawg like this.
survivalmonkey SSL seal warrant canary