[lbo-talk] oil supply

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Tue Mar 20 10:27:11 PDT 2007



> $3.25? Wow. Life is cheap in New York!

California is, as they say, different. There's lots of reasons why gas in California is way above average. Long distance truckers fill up before they cross the border and make a mad dash into a port and return before they need more -- it's worth it.

I paid $3.49 the other day in Berkeley.

---

California has historically seen some of the highest, and

most volatile, gasoline prices in the United States. The

reasons for the striking differences in the behavior of

California gasoline prices, as compared to those in other

parts of the United States, are numerous, varied, controversial,

and not well understood. Several factors contribute to the

problem:

. The California refinery system runs near its capacity limits,

which means there is little excess capability in the region

to respond to unexpected shortfalls;

. California is isolated and lies a great distance from other

supply sources (e.g., 10 days travel by tanker from the Gulf

Coast), which prevents a quick resolution to any supply/demand

imbalances;

. The region uses a unique gasoline that is difficult and

expensive to make, and as a result, the number of other

suppliers who can provide product to the State are limited.

[ ... ]

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/caprice/caprice.pdf



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