Bobalouie
Active Member
Over 100 yrs of oil and gas locked up in the US alone with the new unconventional shale plays. And that is 100 yrs more than we thought just 5 yrs ago. Oil field technology, at least in the US & Canada, is improving at an unbelievable rate. In the next 20 yrs we will probably have developed technology to further increase that 2 or 3 fold. A good case in point is Canada's Tar Sands. Technology to exploit that resourse didnt exist 5 yrs ago.
The reason that gasoline prices dont index with crude oil prices anymore is due to the lack of refining capacity. We have enough crude to meet demand in the US, but not enough capcity in the refineries to produce enough gasoline to meet demand. Therefore, oil sits in the $100/bbl range because they can turn the spigots down since the refineries cant handle any more capacity. You can see this when there is a hurricane in the Gulf of Mexico. They knock 1 refinery off line and you see a $0.25 price increase at the pump because supply goes down. You can also see it when they shut a refinery down for mantainence.
The reason that gasoline prices dont index with crude oil prices anymore is due to the lack of refining capacity. We have enough crude to meet demand in the US, but not enough capcity in the refineries to produce enough gasoline to meet demand. Therefore, oil sits in the $100/bbl range because they can turn the spigots down since the refineries cant handle any more capacity. You can see this when there is a hurricane in the Gulf of Mexico. They knock 1 refinery off line and you see a $0.25 price increase at the pump because supply goes down. You can also see it when they shut a refinery down for mantainence.
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