Posted by Don in Missouri [97.64.167.2] on Wednesday, December 17, 2014 at 11:29:45 :
In Reply to: OT Diesel price posted by Keith in Washington [24.41.55.51] on Tuesday, December 16, 2014 at 14:10:04 :
We need more biodiesel in the market to help return the equity between gasoline and diesel prices.
Gasoline demand is down because of more fuel efficient cars, fewer consumer miles traveled and more ethanol in the mix. Diesel demand remains strong relative to gasoline, because heavy duty diesel drives industry, the economy, and even more of our light duty vehicles these days.
Cheap crude is bringing prices down, but less so on diesel, because US refiners get a relatively fixed ratio of diesel and gasoline. When they are losing money on cheap gasoline, they have to make up the revenue on diesel sales.
We need more diesel fuel in the market that doesn't have to come from the same barrel of crude as a gallon of gasoline.
We could also use some diverse and domestic sources that we commit to on an ongoing basis. OPEC is letting prices fall to drive out our domestic supplies, like fracked shale oil, which doesn't make economic sense below $70 a barrel. If they succeed at stopping our domestic investments, they will raise prices again. There is no free market for oil.
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