U.S. refiners run at slowest rate since 2005

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U.S. refiners run at slowest rate since 2005 Thursday, March 27, 2008
Reuters -- NEW YORK, March 26 (Reuters) - U.S. refiners have slowed fuel production to the lowest rate since they were battered by hurricanes in 2005 even as pump prices hit all-time highs, according to government data released on Wednesday. Experts said the drop-off in domestic output was due to thin profit margins in the refining industry amid high costs for crude, and could lead to an increase in gasoline prices to over $4 a gallon this summer driving season. "Given the high price of crude and likely refiner efforts to increase their margins, the possibility exists for gasoline to suffer substantial increases," the Consumer Federation of America said in a report.
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JT Moderator	Message Posted: 3/27/2008 10:46:58 AM	Ignore JT Report Abuse
	Thursday, March 27, 2008 Reuters -- NEW YORK, March 26 (Reuters) - U.S. refiners have slowed fuel production to the lowest rate since they were battered by hurricanes in 2005 even as pump prices hit all-time highs, according to government data released on Wednesday. Experts said the drop-off in domestic output was due to thin profit margins in the refining industry amid high costs for crude, and could lead to an increase in gasoline prices to over $4 a gallon this summer driving season. "Given the high price of crude and likely refiner efforts to increase their margins, the possibility exists for gasoline to suffer substantial increases," the Consumer Federation of America said in a report. Visit Reuters for full article

REPLIES (newest first)		Page: First Prev [ 1 ] 2 3 4 Next Last

kingdick Champion Author Minnesota Posts:16,310 Points:1,335,945 Joined:Aug 2004	Message Posted: 4/5/2008 10:59:01 AM	Ignore kingdick Report Abuse
	----------------------------------- What are the components of the retail price of gasoline? Year 2008 percent * /gallon * /barrel 100.00% * $3.05 * $128.06 Retail * 6.00% * $0.18 ** $7.68 marketing and distribution 12.50% $0.38 * $16.01 refinery processing costs 14.50% $0.44 * $18.57 taxes 67.00% $2.04 * $85.80 cost of crude oil -----------------------------------
kingdick Champion Author Minnesota Posts:16,310 Points:1,335,945 Joined:Aug 2004	Message Posted: 4/5/2008 10:58:22 AM	Ignore kingdick Report Abuse
	----------------------------------- What are the components of the retail price of gasoline? Year 2005 percent * /gallon * /barrel 100.00% * $2.27 * $95.34 Retail * 9.00% * $0.20 ** $8.58 marketing and distribution 19.00% $0.43 * $18.11 refinery processing costs 19.00% $0.43 * $18.11 taxes 53.00% $1.20 * $50.53 cost of crude oil -----------------------------------
chemist74 Champion Author Cleveland Posts:5,523 Points:854,670 Joined:Apr 2005	Message Posted: 4/5/2008 9:14:32 AM	Ignore chemist74 Report Abuse
	Not all processing units at a refinery provide the same profit margin. If a refinery is operating at close to 100% of capacity, it is probably using some units that provide very low profit margin. "IF" refineries are operating with a very small profit margin, they would probably shut down the least profitable units. If there was more refinery capacity, refineries could operate at their most profitable capacity level without hurting overall supply.
backwash Champion Author Toronto Posts:6,048 Points:1,342,450 Joined:Mar 2003	Message Posted: 4/5/2008 8:23:19 AM	Ignore backwash Report Abuse
	it was fun while it lasted our "pushers" know we are addicts and now they jack up the prices and because the government gets a cut, we are all in big trouble
tryingtosave Sophomore Author Regina Posts:139 Points:9,880 Joined:Mar 2007	Message Posted: 3/30/2008 4:01:32 PM	Ignore tryingtosave Report Abuse
	It's already been proven that boycotts don't do anything. The date of the boycott is announced, and prices rise a day or two before that date. Everyone has to fuel up before they can participate in the boycott, right? If not before, then right after. The boycott would have to last a month or more and that isn't going to happen.
DebbieMarie Rookie Author Oklahoma City Posts:1 Points:195 Joined:Mar 2008	Message Posted: 3/30/2008 1:30:48 PM	Ignore DebbieMarie Report Abuse
	So, please what is the best course of action? I'm not an expert. Would a boycott be in our best interest or not? I dread going to the gas station. Gas money is now being paid out of my grocery money. Times are very tough. I'm working and going back to school at 53 years old. I'm a baby boomer. And baby boomers like to take action....if it will serve them and everyone else well. If a boycott is decided to be a good idea after all, and I think it is, then it must have some organization to it, such as specific dates for everyone to follow, else it will have little impact. The dates MUST be announced in The Daily Oklahoman a couple weeks in advance with a reminder a couple days prior to the actual event. Everyone would need to be encouraged to fill up before the event. Asking people to go without gas for a week is asking too much. But asking people to not go to the gas stations for 4 days would be reasonable. And what a strong political message that would send! Plus it would certainly get the attention of the US refiners. Do you agree?? Just my thoughts. Let me know what you think. I'm open. I don't claim to have all the answers. DebbieMarie
pgerassi Champion Author Wisconsin Posts:1,594 Points:354,965 Joined:Apr 2007	Message Posted: 3/28/2008 1:30:47 PM	Ignore pgerassi Report Abuse
	Aren't they forgetting the switchover to summer blends? That is a better reason for the slowdowns. But that makes it more normal than they want people to take it.
Grebe Sophomore Author Wisconsin Posts:238 Points:892,930 Joined:Feb 2003	Message Posted: 3/28/2008 11:22:11 AM	Ignore Grebe Report Abuse
	This is why "lowering demand" will not bring down gas prices. In order to maintain their margin of high profit, the refineries will mess with production in one way or another in order to keep the price of gas high. Obviously the same (or higher) profit for less production is pretty attractive. What is scary is that these folks no longer seem to be concerned about the devastating effect this will have on the consumer in particular and the economy in general. Maximum profit is paramount. If a person didn't know better, you'd think that the Iranians and Chavez were running the refineries. The manipulation of the production "limits" goes hand-in-hand with their desire to "break the back" of the American economy.
DriverDave Champion Author Twin Cities Posts:4,859 Points:571,485 Joined:Jul 2004	Message Posted: 3/28/2008 10:48:32 AM	Ignore DriverDave Report Abuse
	archerdave - No, I did not forget they produce more than gasoline. Valero made $12.33/barrel of crude last year. When a barrel of oil yields more gasoline than anything else (about 51% gasoline per barrel), that's the biggest factor in the profit/loss for a barrel. So you can take your "BS!" claims elsewhere (like the multitudes of other pointless and baseless threads) - they are hollow words if you know what's really going on. Don't forget that gasoline inventories are still at 9 year highs, after being at 14+ year highs earlier this year. [Edited by: DriverDave at 3/28/2008 10:54:57 AM EST]
exmetro49 Rookie Author St. Louis Posts:53 Points:11,750 Joined:Dec 2007	Message Posted: 3/28/2008 10:46:01 AM	Ignore exmetro49 Report Abuse
	thin profit margin? there isnt enough profit for them to get some too
LukeIN All-Star Author Indianapolis Posts:829 Points:150,885 Joined:Nov 2007	Message Posted: 3/28/2008 10:44:44 AM	Ignore LukeIN Report Abuse
	Refiners have decreased over the years instead of increasing, I know of two here in Indiana that closed down many years ago. this just seems criminal to me that they have the right to cut back output even more, huring the US economy jut to boost their profits even more!
willisc1 All-Star Author Louisville Posts:617 Points:291,055 Joined:Mar 2005	Message Posted: 3/28/2008 10:39:43 AM	Ignore willisc1 Report Abuse
	I want them to reduce it soo much the gas stations dont HAVE any gas. The folks have to drive all over town (on empty) & risk running out of fuel. Then they can sell even MORE gas at an ever higher price when folks cars are abandoned at stop lights. Wouldnt it be funny
w4kh Champion Author Riverside Posts:3,095 Points:531,315 Joined:May 2004	Message Posted: 3/28/2008 10:36:35 AM	Ignore w4kh Report Abuse
	I am almost hoping that gasoline does rise a bit, as long as diesel comes down a bunch so truckers can earn a living and the prices of everything can stay down
laddyboy62 All-Star Author Riverside Posts:611 Points:802,425 Joined:Mar 2005	Message Posted: 3/28/2008 10:35:47 AM	Ignore laddyboy62 Report Abuse
	i'm sure they will slow it down to slower then a snail with a limp...
Cuzilla Champion Author Indianapolis Posts:5,087 Points:832,620 Joined:Sep 2005	Message Posted: 3/28/2008 10:34:38 AM	Ignore Cuzilla Report Abuse
	Market forces at work here!
Somis1 Champion Author Ventura Posts:3,880 Points:884,395 Joined:Jul 2005	Message Posted: 3/28/2008 10:34:10 AM	Ignore Somis1 Report Abuse
	They control the spigot.....
kruk Veteran Author London Posts:259 Points:127,605 Joined:Jan 2007	Message Posted: 3/28/2008 10:27:30 AM	Ignore kruk Report Abuse
	Didn't they complain about lower profits?
gasman50 All-Star Author Portland Posts:542 Points:639,605 Joined:Nov 2005	Message Posted: 3/28/2008 10:23:53 AM	Ignore gasman50 Report Abuse
	Time will tell
thomas41546 All-Star Author Tennessee Posts:755 Points:601,080 Joined:Oct 2005	Message Posted: 3/28/2008 10:22:51 AM	Ignore thomas41546 Report Abuse
	We don't need more refineries. Just increase the output to 100 percent istead of 85.
91_Metro_Man Veteran Author Ventura Posts:311 Points:130,335 Joined:Dec 2007	Message Posted: 3/28/2008 10:20:40 AM	Ignore 91_Metro_Man Report Abuse
	If we do not start building new refineries we will be a third world country.
Rivermedic Veteran Author Fort Worth Posts:333 Points:60,455 Joined:Mar 2008	Message Posted: 3/28/2008 10:17:33 AM	Ignore Rivermedic Report Abuse
	They'll say anything to keep the money rolling in. From year-end reports the "thin profit margins" look pretty big!
Lovelee All-Star Author Detroit Posts:818 Points:265,255 Joined:Mar 2007	Message Posted: 3/28/2008 10:16:08 AM	Ignore Lovelee Report Abuse
	Let's see. Consumption is down. Refining is down. Ethanol use is up. And so is the price of gas at the pumps. And we still are not building refiner capacity or neclean plants.
GCL Champion Author San Jose Posts:9,184 Points:955,805 Joined:Aug 2003	Message Posted: 3/28/2008 10:15:57 AM	Ignore GCL Report Abuse
	17 cents a gallon doesn't sound like much, until you multiply it by 376 million gallons.PER DAY!
woos777 All-Star Author Washington Posts:647 Points:479,180 Joined:Sep 2006	Message Posted: 3/28/2008 10:15:35 AM	Ignore woos777 Report Abuse
	That's why gas prices are so high
AC-302 Champion Author Los Angeles Posts:6,343 Points:1,129,300 Joined:Aug 2004	Message Posted: 3/28/2008 10:12:51 AM	Ignore AC-302 Report Abuse
	Actually, by keeping production to 80 - 90% of "nameplate capacity", they can ensure a more constant supply of fuel. The refiners can do more maintenance on their plants and more easily replace broken down items. Also, they can avoid putting in new reactors. So, yes, it will hold prices down if we slow down or contract our fuel usage.
archerdave Champion Author Detroit Posts:2,369 Points:67,675 Joined:Sep 2005	Message Posted: 3/28/2008 10:12:39 AM	Ignore archerdave Report Abuse
	"Let's not forget that the input cost for gasoline has risen and continues to rise. Valero, the largest independant US refiner, made $.17/gallon of gasoline in 2007, while crude costs averaged over $70/barrel in the same timeframe. Add into that the cost of shipping, storage, refining, maintenance, upkeep...." BS! How about the profit on all of the other petrochemical products they produce and sell? Forget that they sell more than gasoline did we? Nationalize Big Oil! It worked in the Democracy of Brazil and it ought to work here as well.
The_WB Champion Author Detroit Posts:2,543 Points:300,675 Joined:Apr 2007	Message Posted: 3/28/2008 10:10:54 AM	Ignore The_WB Report Abuse
	The slowdown - drive prices (and profits) UP!
cdaisey Rookie Author Maine Posts:31 Points:2,000 Joined:Jan 2008	Message Posted: 3/28/2008 10:10:20 AM	Ignore cdaisey Report Abuse
	We're headed for 3rd world country.
GAC1Shirt Veteran Author Georgia Posts:337 Points:299,665 Joined:Sep 2006	Message Posted: 3/28/2008 10:09:55 AM	Ignore GAC1Shirt Report Abuse
	Gov't and business will always pass the cost to you.
fairchildd All-Star Author Kansas City Posts:543 Points:198,710 Joined:Aug 2007	Message Posted: 3/28/2008 10:07:08 AM	Ignore fairchildd Report Abuse
	lower production = higher prices
DriverDave Champion Author Twin Cities Posts:4,859 Points:571,485 Joined:Jul 2004	Message Posted: 3/28/2008 10:04:30 AM	Ignore DriverDave Report Abuse
	Thanks for the good post, markmoore80. At least some people in these forums have a clue as to what's going on! Let's not forget that the input cost for gasoline has risen and continues to rise. Valero, the largest independant US refiner, made $.17/gallon of gasoline in 2007, while crude costs averaged over $70/barrel in the same timeframe. Add into that the cost of shipping, storage, refining, maintenance, upkeep.... No matter what, the MSM will continue to "report" only what they want to report, facts be damned. Zinnoil - so true, so true.... [Edited by: DriverDave at 3/28/2008 10:06:55 AM EST]
Zinnoil Champion Author Illinois Posts:10,679 Points:1,323,820 Joined:May 2004	Message Posted: 3/28/2008 10:04:26 AM	Ignore Zinnoil Report Abuse
	They can't compete with Congress subsidized ethanol nor can't remodel refineries due to to too many opposing groups.
markmoore80 Veteran Author North Carolina Posts:394 Points:196,385 Joined:Apr 2004	Message Posted: 3/28/2008 9:59:51 AM	Ignore markmoore80 Report Abuse
	They aren't making enough money - oil is too high. If the oil to gas profit ratio was like pre-katrina, we'd already be paying >$4 a gal. This is one time i can the refineries have actually kept prices down... but they can't do it forever.
TomT2Lee All-Star Author Cincinnati Posts:642 Points:511,735 Joined:Sep 2005	Message Posted: 3/28/2008 9:59:21 AM	Ignore TomT2Lee Report Abuse
	In the not to distant future we will be wishing for the cheap gas prices we have today.
mb65 Sophomore Author Michigan Posts:126 Points:438,995 Joined:Apr 2005	Message Posted: 3/28/2008 9:59:02 AM	Ignore mb65 Report Abuse
	whatever...
1alden Veteran Author Twin Cities Posts:362 Points:94,300 Joined:Jan 2008	Message Posted: 3/28/2008 9:52:58 AM	Ignore 1alden Report Abuse
	It all comes down to supply and demand, they cut supply we demand more. The bottom line is the important thing, you don't make money You wait for a government hand out.
Zygnatz Champion Author British Columbia Posts:4,030 Points:791,855 Joined:Oct 2005	Message Posted: 3/28/2008 9:51:54 AM	Ignore Zygnatz Report Abuse
	Exactly!
Chazzer Champion Author Nevada Posts:7,155 Points:1,547,935 Joined:May 2002	Message Posted: 3/28/2008 9:51:19 AM	Ignore Chazzer Report Abuse
	This is one way to keep gas prices high!
scrounger Champion Author Vancouver Posts:5,365 Points:1,503,785 Joined:Mar 2003	Message Posted: 3/28/2008 9:50:24 AM	Ignore scrounger Report Abuse
	anything to keep prices high
bluebird1 Champion Author Toronto Posts:6,365 Points:1,305,820 Joined:May 2004	Message Posted: 3/28/2008 9:49:22 AM	Ignore bluebird1 Report Abuse
	Isn't that interesting, supply is up - demand is down and prices way up for a large part because of lack of refining & locations. Now prices rising because of Big Oils actions. Who would have thunk!!! maybe every single member of the public that buys gas.
Nasack04 Sophomore Author Pittsburgh Posts:127 Points:14,185 Joined:Mar 2008	Message Posted: 3/28/2008 9:47:36 AM	Ignore Nasack04 Report Abuse
	makes no sense
onethumb All-Star Author Hamilton Posts:796 Points:287,705 Joined:Mar 2006	Message Posted: 3/28/2008 9:47:10 AM	Ignore onethumb Report Abuse
	This will inflate the prices more. It's in all in their maim plan.
jhaumersen Champion Author Iowa Posts:6,218 Points:918,670 Joined:Sep 2005	Message Posted: 3/28/2008 9:46:19 AM	Ignore jhaumersen Report Abuse
	The oil companies are and refineries are businesses. They have to be allowed to make profits. However, stories like this, that try to create an impression that the refineries are suffering, and begin conditioning for higher gas prices (psychological manipulation) through unsupported advanced forecasting, should be chargeable as criminal collusion. Supply and Demand is the core of our economy. But psychological conditioning of demand and manipulated supply is another form of profiteering.
radrunner Veteran Author Toronto Posts:317 Points:875,915 Joined:Apr 2004	Message Posted: 3/28/2008 9:45:43 AM	Ignore radrunner Report Abuse
	helps keep the prices up
amearly Champion Author Michigan Posts:3,030 Points:671,565 Joined:Jan 2006	Message Posted: 3/28/2008 9:44:30 AM	Ignore amearly Report Abuse
	So when the economy finally collapse under the strain of high energy prices I guess they won't be able to make any profit because demand will fall .
trojanbuck All-Star Author Dayton Posts:525 Points:115,495 Joined:Aug 2007	Message Posted: 3/28/2008 9:43:00 AM	Ignore trojanbuck Report Abuse
	In a free-market environment where collusion wasn't rampant, the low demand, high supply situation would result in lower prices. In our environment, it just means radically higher prices.
pandarisuresh Sophomore Author New Jersey Posts:183 Points:101,915 Joined:Oct 2007	Message Posted: 3/28/2008 9:42:54 AM	Ignore pandarisuresh Report Abuse
	Good
LazerBlazer Rookie Author Akron Posts:5 Points:10,250 Joined:Dec 2007	Message Posted: 3/28/2008 9:40:07 AM	Ignore LazerBlazer Report Abuse
	Their profits aren't high enough.
BlueBike Champion Author San Jose Posts:1,802 Points:405,925 Joined:Feb 2007	Message Posted: 3/28/2008 9:39:49 AM	Ignore BlueBike Report Abuse
	What is their incentive to do anything different.
Magnum0829 All-Star Author Jackson Posts:570 Points:285,240 Joined:Oct 2005	Message Posted: 3/28/2008 9:39:02 AM	Ignore Magnum0829 Report Abuse
	Who had the thin profit margins?

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