No Runs, No Hits, No Errors -- February 10, 2022

Break, break: video from the Ambassador Bridge show port-a-potties on the bridge. $300 million / day crosses that bridge. $300 million / day. 

Now, back to the post.

So, why is gasoline so expensive? See this post. Shortly after posting it, a very perceptive reader asked the question that no is asking. Everyone is just assuming. 

The question the reader asked: with all that data (at that post) why is gasoline so expensive?

The reader rightly pointed out there is no shortage of gasoline right now. Based on the questions, and based on the answers by the WH press secretary, "everyone" assumes the price of gasoline is high because the price of crude oil is high. But the reader asked the "right" question: why is gasoline so expensive? It seems not to be related to the price of crude oil.

Okay, don't take that out of context. Of course, the price of gasoline correlates with the price of oil, but even if another one million bopd suddenly came to market, the price of gasoline would be minimally affected. 

Why? Is anyone paying attention to the news? The number one story on Shephard Smith (twenty minutes from now) will be the high rate of inflation. One has to go all the way back to 1982 to see inflation this high. 

Thank you, Mr Biden.

So, when crude oil goes to the refiner, what affects the price of the refined products. The cost of refining it, and those costs have gone way up in line with inflation.

And when the refined product, let's say, gasoline, leaves the refinery for its destination, what is the difference between wholesale and retail prices? All things being equal: transportation costs. And, for those who have been living under the Geico rock for the past year, there is a shortage of trucks; there is a shortage of drivers; there are new federal regulations adding to the cost of delivery; and on top of all of that, there's inflation. Just as groceries are more expensive, so is gasoline, due to inflation. 

So, release oil from the SPR (which will increase the price of oil, see linked post above), go for it, but that's not the problem. The problem is inflation. Nothing has changed over night, but all of a sudden gasoline is costing $6 / gallon in San Francisco. It's called inflation.

$6 gasoline: I don't watch the evening news so I would have missed this but my wife says there is one state that is now anticipating $6-gasoline. Here it is. Link here.

Gasoline prices have remained unattractively high across much of the United States in the latter half of 2021, and a new study reveals that one U.S. state may see gasoline prices near $6.

According to a new study published by GasBuddy this week, gasoline prices could reach $6 per gallon in San Fransisco, with Los Angelos and Sacramento reaching $5.50 per gallon. For some cities in California, this would be the highest nominal average ever paid.

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Back to the Bakken

Active rigs:

$90.10	2/10/2022	02/10/2021	02/10/2020	02/10/2019	02/10/2018
Active Rigs	33	15	55	63	58

No new permits.

 

No permits renewed.

 

No DUCs reported as completed.

 

No runs, no hits, no errors.