[loadedbeat]

I look at the price of barrels of crude oil daily. At the start of the year it was hovering around the $60 mark. Then it started to go up and almost hit $70 again. I told my friends to expect the price of petrol to go up, and it surely did. It was around the $1.40 per litre mark and then it rose up to $1.55.

I've then watched the crude oil price drop back down to the $60-$63 mark, but the petrol prices haven't reflected this, and i don't understand this, and thats my question. Are you able to provide some insight on this for me?

Now i asked montequest about this and he explained that it takes time for the higher priced crude oil to filter through the system, and that kinda explains why its still high despite the crude price dropping.

But then I wondered this: When the crude price rose, the petrol price rose too and the gap was only a week or two, if that. But the lag from the crude dropping and the petrol prices returning to normal is up to nine weeks. Why do petrol prices rise faster with the crude, but take longer to return to normal when crude drops?

I hope that lot makes sense.

Another question i posed to montequest. My dad keeps harping on about the GREAT SOUTH BASIN, which is aparently south of New Zealand. Has anyone else heard of this? Montequest said there was potential for 2.5 billion barrels of oil. I don't dispute this after reading This PDF. Has anyone else heard of reasons why that field isn't being ultilised?

Thanks in advance,

Nathan

[loadedbeat]

Ok, even more confused now. Crude's dropped to $61 and the petrol price has jumped again, up 3 cents a litre, overnight.

Link

[loadedbeat]

*places in the 'too hard' basket*

[ubercynicmeister]

Somewhere over at The Oil Drum they are referring to the fact that it's "maintenance season" on US refineries. That is they have shut some bits of them down so they can repair bits of them. It gets a little problematic to work on Oil Refineries when they are operating.

OK, so what does this mean? Simple - there's less "demand" for Oil, because the Refineries are dropping consumption. Not the quotation marks...I think if one were to track the actual amount of "drop" in Oil Demand, you'd find that the entire amount was so small, you'd probably have trouble measuring it.

But the Markets think there's been a drop (as there is at about this time of year, every year) so the price goes down. Indeed, it "ought" to have gone down a whole lot more but there's the "Force Majeur" in plac ein Nigeria, there's tensions due to Iran and there's the all-but-declared Civil War in Iraq, not to mention the mucking around OPEC is doing, where it is trying very hard to sell everyone Heavy, Sour, Contaminated Crude, instead of the Light Sweet Crude that everyone can actually use.

Bye The Way: you could probably buy a barrel of Heavy Sour Contaminated Crude for around the US$30 mark, but the contaminants make it almost unuseable.

But, what happens to the "opposite end" of the Oil Equation when you slow the amount of "goo" going through the refinery? Well, the End Product (fuels, chemicals) rises in price, because there's seen to be less of it, and it's really Fuels & Chemicals we're interested in. If there was a way to get the fuels & chemicals without the Oil, we'd choose that.

Getting the picture?

So, the Oil Companies now have to explain (and thanks to the ever-compliant media, who're not even asking the questions, they are having a dream run) why it is that as the Price of Crude goes DOWN, the price of Fuel Goes Up.

All of those "inventories" that Aussie Media and (no doubt) NZ Media are referring to are entirely due to the rest of the world sending the US heaps of Oil Post Katrina. This means The Rest Of The World will be short when the next Big One Hits. It's those inventories that are (supposedly) driving the price of Oil downwards (yeah...riiiight)

Have you had your question answered?

#########

BTW: I regularly hear from older persons who insist there's "Plenty of oil, they're just holding it back"...the "Great Southern Basin" sounds like one of those things. Australia has a moderate amount of Oil, but it;'s so highly contaminated (we've used up the good stuff) that we really cannot use it. This is why our Oil Production is actually going down, in spite of the North West Shelf projects, which (I understand) is mostly Natural Gas, anyway.

The truth is that there MAY be some Oil in the Deep Oceans...trouble is it's one heck of an expensive problem getting to it. And when you look at how expensive getting the Deep Ocean Oil is thought to be then you begin to realise why they ain't even lookin'.

[loadedbeat]

Thanks for your reply uber, it makes a lot of sense. It was quite hard to figure it out on my own. Out of all my mates, i'm the most passionate about the 'peak oil' subject, so i'm suposed to have the answers for everything, or shut up, and admit that i'm full of shit and that everything is ok.

Someone in another forum told me that the price of crude and the price of petrol weren't all that related. To quote them:

$this->bbcode_second_pass_quote('', 'T')he price of pretrol is not directly proportion al to the price of crude. They are related, but many other factors come into play. Refinery costs, taxes, consumption of gas, and more.

[ubercynicmeister]

$this->bbcode_second_pass_quote('loadedbeat', 'T')hanks for your reply uber, it makes a lot of sense. It was quite hard to figure it out on my own.

[loadedbeat]

$this->bbcode_second_pass_quote('ubercynicmeister', 'N')o worries. Hope you guys in New Zealand actually start doing something about Peak Oil soon, - you'll be in a worse mess by far than Australia, which has sheer physical size to help ameliorate the Peak Oil effects.

[ubercynicmeister]

$this->bbcode_second_pass_quote('loadedbeat', '')$this->bbcode_second_pass_quote('ubercynicmeister', 'N')o worries. Hope you guys in New Zealand actually start doing something about Peak Oil soon, - you'll be in a worse mess by far than Australia, which has sheer physical size to help ameliorate the Peak Oil effects.