Mickey Clark (Radio 5 - Wake Up To Money) has mentioned the refinery capacity thing at least four times, but he never tackles my e-mails on the subject.Why is lack of refinery capacity often cited as one of the reasons for the high crude oil price?
Refinery capacity does not really relate to the price of crude, though I understand your assumption. Crude is produced, it needs be to be sold to refineries; if there isn't sufficient refinery capacity, refineries don't buy and there's an excess of crude on the market. I get ya'. This would be unlikely to occur, however, because producers of crude are aware of the market factors and will produce less crude if their buyers won't be able to refine it.
I know you know this, but for the sake of clarity, a very basic diagram:
crude %26gt; refinery %26gt; gasoline
Refinery output, therefore, is just one factor affecting the price of gasoline, not crude. This is why the oil industry itself intentionally shut down many of its own refineries in the 1980s in an attempt to cause oil prices to spike. I don't know or listen to Mickey Clark (is he on the radio? I don't really do talk radio.), but I do know that for some reason, the Republican Party is oil-drunk and has made it their business to defend every piece of self-serving crap that industry hands out, and as such, you get a lot of arguments that don't make sense floating about in a field of so much static and interference that it's hard to get at the truth.Why is lack of refinery capacity often cited as one of the reasons for the high crude oil price?
I do not listen to that radio station, However when I have heard Refinery Capacity mentioned in relation to Prices it has been relative to Gasoline Prices, Not Crude Oil. The Crude Oil prices are mentioned more in relation to Crude Oil production generally. Crude Oil prices also have a major impact on the Gasoline Prices, and production levels are typically manipulated by the major oil producing nations in order to maintain a high Crude Oil Price.
Mickey Clark cant't tackle your e-mails - because he can't - full stop...
The process, as others have described here and:
Oil refinery - Wikipedia, the free encyclopediaAn oil refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, ...
Is where the money lies ..... the arab countries - the main producers of crude oil in the first place - dictate the price of a barrel of oil world wide .... if they want to up the prices - there's nothing we or any of us can do about it .... and they will up the prices if the demand for the oil is there ....
Then, because they are restricting the production of oil, the price of the barrel is often too high - so refineries don't refine as much as they could to meet demand in order to keep their prices down to a level that doesn't knock us all out ... enough but not too much (which in itself is expensive to you and me).....
The machinery to process the oil is extremely, horrendously expensive.... the process to refine is complicate.... the end product expensive - because there aren't enough refineries..... again down to the price of a barrel of oil..... if the price of the base product is expensive - fewer producers are going to buy it to refine it .... fewer producers = fewer refineries..... fewer refineries = less production of gas and petroleum etc...... high consumer prices......and so it goes on....
It's a vicious circle that only the Arabs control.... world countries cow-tow to appease them - and pay the prices for limited availability......
Because it's easy to say that. They'll never admit to the gigantic markup on refining oil. That's where the billions in profit are coming from. New refineries mean spreading out the profit, reinvesting money and basically producing the same amount of gas - so in the long run it's less profit.
Its just an excuse not a reason seeing that the US on produce and supply 1/4 of the nations oil. Its an excuse to price gouge us.
Because the truth would be unpalatable to the public.
Demand out strips supply thats why
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