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barrel of oil to gallon of gas
Oil per barrel - gasoline price ratio ?
by Valkyrie » Mon 23 Jul 2007, 14:39:52
Does anyone know of a site anywhere that shows the ratio of the price of oil vs a gallon of gasoline in $US? Such as, how much a gallon of gas will be when oil hits $100, $150, $200 etc. THX
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Re: Oil per barrel - gasoline price ratio ?
by JoeW » Mon 23 Jul 2007, 16:05:54
The price of gasoline is influenced by the price of oil, but not in the way that you suggest. They are two distinct products and the supply and demand for each of them has a life of its own.
That said, a barrel of oil is 42 gallons. So if gasoline is made primarily from oil, then 42 gallons of WHOLESALE gasoline (not the price you pay at the pump) must cost at LEAST as much as a barrel of oil. So $84 barrel of crude implies wholesale gasoline has a MINIMUM price of $2/gallon. There is no maximum price. You could have crude at $84/barrel and gasoline at $100/gallon since they are two distinct products. I can't fill my car with crude oil...and I can't use gasoline for many of the uses of crude oil.
Might as well try to figure out the price of a new home based on the price of lumber!
That said, a barrel of oil is 42 gallons. So if gasoline is made primarily from oil, then 42 gallons of WHOLESALE gasoline (not the price you pay at the pump) must cost at LEAST as much as a barrel of oil. So $84 barrel of crude implies wholesale gasoline has a MINIMUM price of $2/gallon. There is no maximum price. You could have crude at $84/barrel and gasoline at $100/gallon since they are two distinct products. I can't fill my car with crude oil...and I can't use gasoline for many of the uses of crude oil.
Might as well try to figure out the price of a new home based on the price of lumber!
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Re: Oil per barrel - gasoline price ratio ?
by gnm » Mon 23 Jul 2007, 16:14:36
Does anyone know what the maximum amount of gasoline per barrel is - Like how much can be refined out of light sweet crude if you have tooled your refinery to optimize for gasoline for instance? I'm fairly sure it isn't 42 gallons...
It does seem that RBOB at 2.10 is shockingly cheap given the current crude prices...
-G
It does seem that RBOB at 2.10 is shockingly cheap given the current crude prices...
-G
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Re: Oil per barrel - gasoline price ratio ?
by gnm » Mon 23 Jul 2007, 17:38:28
Many thanks AFO... So if we are getting ~20 out of a barrel of the good stuff and wholesale is 2.10 then the cost of the gasoline component is at ~$42.00 leaving the remaining distillates/heavy tar to net $32.00 or so at current crude prices...
-G
-G
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Re: Oil per barrel - gasoline price ratio ?
by pip » Mon 23 Jul 2007, 18:18:17
The industry uses the 3/2/1 margin to get a rough estimate what you're probably wanting. Basically each barrel makes 2/3 gasoline 1/3 diesel. To calculate:
3*price of oil - 2* price of gasoline - 1* price of diesel = refinery profit per barrel
(convert all prices to $/bbl)
This has ranged from $3-4/bbl to around $35/bbl in the last few years.
Can also be done with the ratio 5/3/2.
3*price of oil - 2* price of gasoline - 1* price of diesel = refinery profit per barrel
(convert all prices to $/bbl)
This has ranged from $3-4/bbl to around $35/bbl in the last few years.
Can also be done with the ratio 5/3/2.
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Re: Oil per barrel - gasoline price ratio ?
by AFO » Mon 23 Jul 2007, 18:33:46
http://www.newton.dep.anl.gov/askasci/e ... g99288.htm
From 20-27 (48%-65%) depending on who you believe
From 20-27 (48%-65%) depending on who you believe
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Re: Oil per barrel - gasoline price ratio ?
by Pretorian » Mon 23 Jul 2007, 19:35:53
different oils have different outputs of gasoline. Why everyone forgets about diesel kerosene, ets?
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Re: Oil per barrel - gasoline price ratio ?
by Blacksmith » Mon 23 Jul 2007, 19:51:22
Today, July 23, 2007 crude oil was 74.90 USD per barrel, the wholesale price of gasoline was 2.10 USD per US gallon, and I bought gas today for 3.97 USD per US gallon.
Now you can go off on a tangent and figure the amount of gasoline produced per barrel which is dependent on the feed stock, the time of year and the processing procedure, but basically the market is the best indicator of all factors.
Challenge, why is the abbreviation for a barrel of oil BBL rather than say BL? Post your answers.
Now you can go off on a tangent and figure the amount of gasoline produced per barrel which is dependent on the feed stock, the time of year and the processing procedure, but basically the market is the best indicator of all factors.
Challenge, why is the abbreviation for a barrel of oil BBL rather than say BL? Post your answers.
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Re: Oil per barrel - gasoline price ratio ?
by Tanada » Mon 23 Jul 2007, 19:58:48
$this->bbcode_second_pass_quote('Blacksmith', 'T')oday, July 23, 2007 crude oil was 74.90 USD per barrel, the wholesale price of gasoline was 2.10 USD per US gallon, and I bought gas today for 3.97 USD per US gallon.
Now you can go off on a tangent and figure the amount of gasoline produced per barrel which is dependent on the feed stock, the time of year and the processing procedure, but basically the market is the best indicator of all factors.
Challenge, why is the abbreviation for a barrel of oil BBL rather than say BL? Post your answers.
Now you can go off on a tangent and figure the amount of gasoline produced per barrel which is dependent on the feed stock, the time of year and the processing procedure, but basically the market is the best indicator of all factors.
Challenge, why is the abbreviation for a barrel of oil BBL rather than say BL? Post your answers.
Because when the commodities market grew to include oil the abbreviation BL was already taken, therefore the BBL tag was designated for barrels of 42 gallons for use in marketing terms.
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: Oil per barrel - gasoline price ratio ?
by Blacksmith » Mon 23 Jul 2007, 20:14:04
Date Price per BBL USD Price per gallon USD Ratio
22-Jan-07 52.33 1.4 0.026753
22-Feb-07 60.12 1.72 0.028609
22-Mar-07 61.26 1.94 0.031668
24-Apr-07 64.65 2.22 0.034339
22-May-07 65.43 2.34 0.035763
22-Jun-07 69.14 2.29 0.033121
23-Jul-07 74.9 2.1 0.028037
Wrong
22-Jan-07 52.33 1.4 0.026753
22-Feb-07 60.12 1.72 0.028609
22-Mar-07 61.26 1.94 0.031668
24-Apr-07 64.65 2.22 0.034339
22-May-07 65.43 2.34 0.035763
22-Jun-07 69.14 2.29 0.033121
23-Jul-07 74.9 2.1 0.028037
Wrong
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Re: Oil per barrel - gasoline price ratio ?
by Rabbit » Mon 23 Jul 2007, 21:00:16
Here is an interesting graph from fresnogasprices.com. It shows the relationship between gas and oil prices (gas prices for Fresno CA). For the past month the price of oil has been rising and the price of gas has been relatively flat. I don't understand why the price of gas has not risen relative to the price of oil considering the extremely low refined gas on hand in the USA. I expect to see an upward correction of gas prices very soon.
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Re: Oil per barrel - gasoline price ratio ?
by watercut » Mon 23 Jul 2007, 22:39:53
A general rule that has been posted from time to time is that each $1.00 increase in the price of a barrel of oil equates to about $.03/gallon of gasoline.
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Re: Oil per barrel - gasoline price ratio ?
by matt21811 » Tue 24 Jul 2007, 01:42:22
The "b" may have been doubled originally to indicate the plural (1 bl, 2 bbl), or possibly it was doubled to eliminate any confusion with bl as a symbol for the bale. Some sources claim that "bbl" originated as a symbol for "blue barrels" delivered by Standard Oil in its early days; this is almost certainly incorrect because there are citations for the symbol at least as early as the late 1700s, long before Standard Oil was founded.
From wikipedia.
From wikipedia.
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Re: Oil per barrel - gasoline price ratio ?
by MrBill » Tue 24 Jul 2007, 04:32:05
As mentioned above you can basically use the 3.2.1 crack spread as your underlying method of calculation.
Today it is
WTI = $74.65
HO = $2.0545
RBOB = $2.0380
Which when coverted to USD per BBL at 3.2.1 is
WTI = $224
HO = $86
RBOB = $176
OR
$224 - 86 - 176 = $38 (rounded to nearest whole number)
$38 / 3 = $12.67 per barrel
It has been in a $8-9 per barrel to $24-26 barrel range so far in 2007. The 1.2.3 crack spread bottoms out in 4-5 months at $10-11 and then rises over the next 12-months to $15-16 per barrel.
That is the 'theoretical' refining margin for the NYMEX futures. For national retail pump prices you can add about 65 cents per gallon to get up to the retail price.
A good short-hand measure is to use the price of crude as approximately one-half the cost of retail gasoline.
So, $75 = $2.10 + 0.65 = $2.75 per gallon at the pump.
There are obviously large regional differences based on local blending requirements and/or the abundance or shortage of local refining capacity. What's the national average from AAA right now? $3.00? That includes high priced markets like California with their own emission standards, etc.
So as a very rough, rough guide, I would use
$75 = $2.75-3.00
$150 = $5.50-6.00
$300 = $8.25-9.00 per gallon at the retail pump
assuming taxes do not change, and they may, if higher crude prices lead to punitive taxes on oil & gas companies? Or if higher fuel costs lead to higher overall inflation that changes the ratio between the price of crude oil and refined gasoline, and it may?
Today it is
WTI = $74.65
HO = $2.0545
RBOB = $2.0380
Which when coverted to USD per BBL at 3.2.1 is
WTI = $224
HO = $86
RBOB = $176
OR
$224 - 86 - 176 = $38 (rounded to nearest whole number)
$38 / 3 = $12.67 per barrel
It has been in a $8-9 per barrel to $24-26 barrel range so far in 2007. The 1.2.3 crack spread bottoms out in 4-5 months at $10-11 and then rises over the next 12-months to $15-16 per barrel.
That is the 'theoretical' refining margin for the NYMEX futures. For national retail pump prices you can add about 65 cents per gallon to get up to the retail price.
A good short-hand measure is to use the price of crude as approximately one-half the cost of retail gasoline.
So, $75 = $2.10 + 0.65 = $2.75 per gallon at the pump.
There are obviously large regional differences based on local blending requirements and/or the abundance or shortage of local refining capacity. What's the national average from AAA right now? $3.00? That includes high priced markets like California with their own emission standards, etc.
So as a very rough, rough guide, I would use
$75 = $2.75-3.00
$150 = $5.50-6.00
$300 = $8.25-9.00 per gallon at the retail pump
assuming taxes do not change, and they may, if higher crude prices lead to punitive taxes on oil & gas companies? Or if higher fuel costs lead to higher overall inflation that changes the ratio between the price of crude oil and refined gasoline, and it may?
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Re: Oil per barrel - gasoline price ratio ?
by aahala » Wed 25 Jul 2007, 12:59:06
Rabbit
In the US, if the retail price of gasoline increases, the percent
of the crude within the total price will usually rise as well.
Federal and most state taxes are by volume, so the absolute
amount of tax per gallon doesn't change whatever the price,
but the percentage of retail will decline as retail rises.
A fairly large amount, perhaps a very large amount, of total
gas sales are at locations that also want to profit from junk
food, soft drink and beer sales, so there will be a tendancy
not to maintain the percentage of markup with rising prices.
In some cases, the cents per gallon may actually decline with
higher prices. The companies do not want a big decline in profits
from their food/drink operations, so they are willing to give up
a small amount of gasoline profits instead.
In the US, if the retail price of gasoline increases, the percent
of the crude within the total price will usually rise as well.
Federal and most state taxes are by volume, so the absolute
amount of tax per gallon doesn't change whatever the price,
but the percentage of retail will decline as retail rises.
A fairly large amount, perhaps a very large amount, of total
gas sales are at locations that also want to profit from junk
food, soft drink and beer sales, so there will be a tendancy
not to maintain the percentage of markup with rising prices.
In some cases, the cents per gallon may actually decline with
higher prices. The companies do not want a big decline in profits
from their food/drink operations, so they are willing to give up
a small amount of gasoline profits instead.
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Re: Oil per barrel - gasoline price ratio ?
by AFO » Wed 25 Jul 2007, 13:23:18
Mr. Bill;
How do you then explain Europe's Average of $8-$9 dollar per gallon gasoline price?
Why the 3.2.1 theory does not apply there?
How do you then explain Europe's Average of $8-$9 dollar per gallon gasoline price?
Why the 3.2.1 theory does not apply there?
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Re: Oil per barrel - gasoline price ratio ?
by JoeW » Wed 25 Jul 2007, 16:41:28
AFO--
The bulk of the high gasoline prices in European countries are from gasoline taxes imposed by their governments.
JW
The bulk of the high gasoline prices in European countries are from gasoline taxes imposed by their governments.
JW
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Re: Oil per barrel - gasoline price ratio ?
by JoeW » Wed 25 Jul 2007, 23:25:50
I think it's irresponsible for anyone to suggest that there is a formula that you can apply to the price of crude that will give you the price of gasoline.
As I have suggested earlier, the crude price is set by the interaction of supply and demand for crude in the marketplace, whereas the gasoline price is set by the interaction of supply and demand for gasoline in the marketplace.
The crude price affects the gasoline price on the supply side, but not on the demand side. All the whiners in the US who complain about refiner's high margins fail to realize this. We currently have a consumption problem, not a production problem. Supply of gasoline in the US is still rising, but demand is rising faster.
As I have suggested earlier, the crude price is set by the interaction of supply and demand for crude in the marketplace, whereas the gasoline price is set by the interaction of supply and demand for gasoline in the marketplace.
The crude price affects the gasoline price on the supply side, but not on the demand side. All the whiners in the US who complain about refiner's high margins fail to realize this. We currently have a consumption problem, not a production problem. Supply of gasoline in the US is still rising, but demand is rising faster.
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Re: Oil per barrel - gasoline price ratio ?
by MrBill » Thu 26 Jul 2007, 03:06:10
$this->bbcode_second_pass_quote('AFO', 'M')r. Bill;
How do you then explain Europe's Average of $8-$9 dollar per gallon gasoline price?
Why the 3.2.1 theory does not apply there?
How do you then explain Europe's Average of $8-$9 dollar per gallon gasoline price?
Why the 3.2.1 theory does not apply there?
In Europe as in the rest of the world including the USA the 3.2.1 crack spread works the same. Roughly speaking, depending on the grade of crude and its content of sulfur, 3 barrels of oil will yield 2 barrels of gasoline and one barrel of heating oil.
Heating oil comes from the same middle distillates of the barrel as diesel fuel, so they compete with one another. But Europe uses more diesel than gasoline, which is why they export refined gasoline to the USA for example.
However, Europe does not have Heating Oil and Unleaded Gasoline futures, they have Brent futures and a Gasoil contract.
The theoretical crack spread using futures calculates the wholesale price if you bought crude futures and took deliver at maturity, while selling heating oil and unleaded futures.
What happens then between wholesale and retail prices is almost entirely taxes imposed by local, state and federal governments. The price of gasoline and diesel is higher in Europe than in the USA because European governments impose more taxes at the retail level.
The 65 cent add-on is a general rule of thumb unique to the USA. If you have the time you can do a search on the web of European taxes by country. Here is a summary of world prices for your info.
$this->bbcode_second_pass_quote('', ' ')As Washington Profile Information and Analytical Agency reports, GTZ international rating company has published comparative prices for automobile fuel in 171 countries of the world. According to it, the cheapest gasoline is sold in Turkmenistan and the most expensive one can be bought in Eritrea. The Eritrean gasoline's price is 95 times more expensive than the Turkmen's.
-------------------------------------------------------------------------------------
As a result, refueling of a car (Honda Civic of 2007 was taken as a sample) in Turkmenistan will cost US$ 1.06, Iran - $ 4.49, Saudi Arabia - $ 8.05, USA - $ 31.42, China - $ 34.45, Russia - $ 38.41, Spain - $ 57.42, France - $ 73.92, Great Britain - $ 81.44, Turkey - $ 93.98.
Anyway, the average world price for gasoline has grown by 238% since 2000. Only few states maintain retail prices for the fuel at the initial level. Venezuela is leading the list, as the price has not gone up but become cheaper.
Source: Summary of World Gasoline Prices
So there is no contradiction. Thanks.
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