Crude oil is getting cheaper _ so why isn't gas?

[Are_grits_groceries]

Crude oil prices have fallen to new lows for this year. So you'd think gas prices would sink right along with them. Not so.
<snip>
The price of gas is indeed tied to oil. It's just a matter of which oil.

The benchmark for crude oil prices is West Texas Intermediate, drilled exactly where you would imagine. That's the price, set at the New York Mercantile Exchange, that you see quoted on business channels and in the morning paper.

Right now, in an unusual market trend, West Texas crude is selling for much less than inferior grades of crude from other places around the world. A severe economic downturn has left U.S. storage facilities brimming with it, sending prices for the premium crude to five-year lows.
<snip>
But it is the overseas crude that goes into most of the gas made in the United States. So prices at the pump will probably keep going up no matter what happens to the benchmark price of crude oil.
<snip>
Historically, West Texas International crude has cost more. So nobody bothered building the necessary pipelines to carry it beyond the nearby refineries in the Midwest, parts of Texas and a handful of other places.

Now that the premium oil is suddenly very inexpensive, refiners elsewhere can't get their hands on it.

"It's so cheap," said Lynn Westphall, the senior VP of external affairs at San Antonio-based Tesoro, which owns a half dozen refineries on the West Coast and Hawaii. "But you can't just build a pipeline to everywhere. We know we can't get it."
http://www.npr.org/templates/story/story.php?storyId=100733852

Hmmmmmmmmmmmmmmmm................

[rpannier]

1. Because

1. The companies can get away with it

2.No one is asking these questions loudly enough because the economy is in such disarray

3. Those execs need their ivory covered condor bone back scratchers

[nc4bo]

3. And for how many years did the oil companies have record breaking profits

and what exactly did they use all that profit for again? What happened to R&D? Isn't R&D one of the reasons why they gave to explain record profits?

And what would these companies have done with oil pumped up from offshore drilling off our coasts and in our protected areas? I guess that would sit in some storage facility too since there's no way of supplying it to various U.S. refineries?

Oil = crack. Oil companies = pushers. The sooner we can wean ourselves off of it the better off we'll all be.

[Ian David]

5. 4. Our supply of crude oil is greater than our refining capacity. n/t

[acmavm]

8. Intentionally so.

[bullimiami]

2. and the government has beed dominated by oil-businessmen for the last 8 years.

and with all their talk of drill here and american oil its the middle east oil sheiks they have always pandered to.

[sendero]

4. There are no..

... elections coming up soon.

[notadmblnd]

6. Because they cut back on refining

You know, create a shortage to maintain prices. They've been sticking it to us for years and getting away with it. Why shouldn't It continue? Who's going to do something about it? I don't know about you folks but I like to at least feel it when I'm getting fucked.

[Optical.Catalyst]

11. The big oil companies are old hands at this

They have a stack of stock excuses to use for any situation.

"We have to cut back on refining to switch over to the warm weather blend. Our capacity will be back up in a month."

They complain about 'summer blend', 'winter blend', 'California blend' and so on. Then the Reich Wing Radio picks up on this and proceeds to blame it on 'those whaco environmentalist!'

[liberal N proud]

12. BINGO!

[rpannier]

14. You mean they run theior business the same way diamond brokers do

Hold on to the diamonds, keeping them off the market thus raising their value

[ThomWV]

7. 2 weeks ago Exxon (once again) announced the highest quarterly profit in history

Profit is part of the final price and if profits are at an all time high one would expect the price of the final product to be far removed from price of the raw material from whence it came.

[spanone]

9. because they cut back on refining and control the price....it's not a free market

[carlyhippy]

10. It's still under 2.00 gal/here

me thinks they are keeping this price "low" :sarcasm: because when May hits, it will soar up to over 5.00 gallon, we will all be crying about it being so high, after summer it will go "back down" to over 2.00 a gallon, and consumers will be so happy it's no longer 5.00 a gallon, we will think we are getting a good deal at 2.00 gallon. It's all mind control, they are trying to psyche us into thinking 2.00 a gallon is a good deal, they have been doing this since the 80's, slowly but surely.

[olegramps]

13. The time for regulation is over due.

A commission should be established to regulate this basic commodity just as commissions regulate utility companies. Of course the oil companies along with their Republican supporters would oppose it only proving that it should be done. Anything that the Republicans oppose is benefical to the working class.

[HooptieWagon]

15. Or just nationalize the oil companies

Splitting them up worked for a while, until they started merging back together. OK, Plan B is just go ahead and nationalize them.