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The premium for California-blend gasoline jumped again after Exxon (XOM) reported late yesterday...

The premium for California-blend gasoline jumped again after Exxon (XOM) reported late yesterday its 150K bbl/day Torrance refinery, recently shut after a power outage, plans to flare during Oct. 10-31; XOM says the move is not related to a breakdown. Carbob premiums have surged from the outage and a fire that knocked out Chevron's Richmond plant in August.
Comments (3)
  • 398524
    , contributor
    Comments (11) | Send Message
     
    REFINERS ARE INSURED (EITHER BY AN INSURANCE COMPANY, OR ON SELF-INSURED) TO COVER ANY LOSSES DUE TO FIRE, ETC. THOSE ARE RISKS THAT ARE ACCOUNTED FOR WITHIN THE COSTS THEY CHARGE FOR REFINING FUEL.

     

    DUE TO THAT, THE INCREASED COST OF GASOLINE SHOULD NOT BE BURDENED TO OTHERS.
    9 Oct 2012, 06:03 PM Reply Like
  • Larry Smith
    , contributor
    Comments (2502) | Send Message
     
    Ah, please take an Economics 101 class and learn about supply and demand. California has a blend of gasoline no one else has, so when two refineries go down the price of gasoline is going to go up. If the refineries are not making any gas or making far less, there is not sufficient supply. The high price actually works to keep supply available for those who really need it, by reducing demand. In addition, if you think that price jump went all to the refiners you are mistaken.

     

    Perhaps if all the greenies in California stopped trying to block every pipeline, every well being drilled and every refinery expansion they would have adequate supply

     

    I will add, I don't know why flaring would cause the price of gasoline to go up.
    9 Oct 2012, 07:09 PM Reply Like
  • dewilso1
    , contributor
    Comments (3) | Send Message
     
    Amen Larry! The major oil companies are self insured, but insurance coverage has nothing to do with the price of gasoline or diesel at the pump. Refining capacity, power supply reliability, pipeline capacity, redundancy and reliability, and crude oil supply reliability has everything to do with price stability, because anything that disrupts supply increases the price due to speculators bidding up the price on the commodities market. That's not the oil companies, it's the speculators that increase those prices, betting that the price will go up when shortages are inevitable. As you noted, California requires a special blend of gasoline, so you can't simply replace that blend when the local California refineries have any refining or distribution issues. But, in addition to that, California has had a long history of blocking the oil & gas industry, expecting the rest of the world to take the risks to produce and deliver energy to their doorsteps.
    10 Oct 2012, 02:54 AM Reply Like
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