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Old 03-21-2008, 11:22 AM
 
Location: WA
5,640 posts, read 24,870,568 times
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Quote:
Originally Posted by Drover View Post
I don't work in the oil industry, and I do drive a car. In fact, I own three cars. But thanks for making unfounded assumptions about me. That's a really constructive way to conduct a dialog.

It doesn't matter where California gets its gasoline from, though I have a very hard time believing it gets none of its gasoline from Gulf refineries. A disruption in oil production and refining capacity has a nationwide and worldwide effect on gas prices because oil (and to a lesser extent gasoline) operates in a global market. At the very least, gasoline operates in a nationwide market. California does not operate in its own little bubble that is somehow immune from the effects of disruptions in national and worldwide markets.
California (which is a large oil producer) gets most of its oil from Alaska and has numerous refineries.
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Old 03-21-2008, 11:48 AM
 
Location: Chicago
38,707 posts, read 102,794,286 times
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Yeah I understand that. But California barely has the refining capacity to meet its own demand and it does obtain at least some of its gasoline from other regions, including the Gulf region according to my cursory research on the subject. None of this changes the fact that major supply disruptions effect oil prices worldwide, which in turn effects gasoline prices. It doesn't matter of Refinery X doesn't receive any oil from wherever the disruption occurred. It will still have to pay a higher price to prevent diversion of that oil to other markets that do receive their oil primarily from the disrupted supply region and are seeking alternative sources. That's the way a global market works, and California is not immune from it by virtue of refining most of its own gasoline.
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Old 03-21-2008, 11:52 AM
 
Location: Londonderry, NH
41,478 posts, read 59,572,644 times
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Theoretically if the California refineries were competing with each other there would be price competition for market share. As they do not actually compete they all charge the same price regardless of what their crude oil actually costs because they can. Even if a refinery was located next to a producing oil field the owners of both the refinery and the field would arrange the pricing so the profits were made on the crude oil and not the refined gasoline. The oil companies are in a cartel or monopoly and collude to avoid price competition. This is illegal but nobody is either investigating or bringing charges. The companies have bought enough political “good will” that this will never happen.

PS – this applies to the rest of the country as well.
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Old 03-21-2008, 11:56 AM
 
Location: Chicago
38,707 posts, read 102,794,286 times
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95% of oil production is run by state-owned companies. Private-sector companies are such a small part of the market that they have little ability to manipulate the prices. If they did, they wouldn't have sat there and taken it in the pants in the late 80s, late 90s and early 00s and oil was as little as $12 a barrel.

Is there collusion or a cartel? Sure there is. That's what OPEC is all about and they make no secret about it. But good luck dragging OPEC or the government-run companies into court to hold them to account. They'll feed the summons to a goat and dare the American courts to try to exercise jurisdiction over them.
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Old 03-21-2008, 12:10 PM
 
Location: Chicago
38,707 posts, read 102,794,286 times
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Quote:
Originally Posted by cdelena View Post
California (which is a large oil producer) gets most of its oil from Alaska and has numerous refineries.
According to the California Energy Commission, California refineries currently source about 15% of their oil from Alaska, with the balance about evenly split between California and foreign sources, leaning slightly toward the latter.

Oil Supply Sources To California Refineries (broken link)
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