I did some searching but could not figure out if this was really already being discussed. If there is another post, just point me.
I'm sure this a common question but I'm really stumped here.
WHAT'S UP WITH DIESEL FUEL?
Our country runs on diesel. Our food arrives via diesel. Gasoline is delivered via diesel. All freight and all commerce is touched by diesel fuel. If there was any national interest in what spikes in fuel would do to the broader economy I'd think that diesel would be as important (or more?) that gas. I just happen to have been (in large part thanks to this forum) bitten by the diesel bug and I will tow with a diesel vehicle long after it is cost effective... (and whimper like a little girl if I'm ever forced to tow with gas)
But the reason for the price and the price volatility is a mystery to me. When I bought my truck, diesel fuel was a full nickel to 10cents cheaper than REGULAR gas everywhere. Then, it crept up to the value of premium gas, and now it has shot up to a full dollar/gallon more than regular.
Also, the volatility is amazing. When I'm not towing I'll get more than 600 miles/tank of fuel and I don't drive the truck that far, so I can go 2 to 5 weeks between fill-ups. I see diesel prices fluctuate and last time I bought fuel it as $4.19, just last week it was $4.14 and then today I saw it for $4.49!!! I was able to go a few miles down the road and top off the tank for $4.29 and somehow I thought I got a deal. I remember (back in the 70's) when I ran out of gas once because I was NOT going to pay the extra 2cent/gallon and tried to make it back home where gas was a "reasonable" 51 cents/gallon... now a 30 cent swing in three days is commonplace?
can anyone 'splain this to me?
I "get" the following... diesel is somehow linked to home heating fuel and gets more expensive in the winter (but it ain't winter 'round here now is it?). And... diesel and gas move in tandem and we are all getting hit as the free market has recently? figured out that they can bid up the price of crude oil and people need to pay it no-matter-what to drive to work to make money to pay for.... uh oil..? And... the dollar is weak because our country is borrowing money at a silly rate and unless we stop borrowing we can't pay it back so our currency is de-valued...
So what else aren't I getting? If anyone knows, tell me. Or point me to the place where people are speculating on this. I'm baffled and curious.
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The price of oil is based on the dollar currency. So a weaker dollar, requires more dollars to buy a barrel of oil. Not the total reason, but one big contributor.
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Quote: Also, the volatility is amazing. When I'm not towing I'll get more than 600 miles/tank of fuel and I don't drive the truck that far, so I can go 2 to 5 weeks between fill-ups. I see diesel prices fluctuate and last time I bought fuel it as $4.19, just last week it was $4.14 and then today I saw it for $4.49!!! I was able to go a few miles down the road and top off the tank for $4.29 and somehow I thought I got a deal.
Is there still a Racetrack station on Hwy 33 and Rt 527 (Manalapan) ?
Vulcaneer wrote: The price of oil is based on the dollar currency. So a weaker dollar, requires more dollars to buy a barrel of oil. Not the total reason, but one big contributor.
yep, I got that one.
If we stop borrowing money that can get better - the dollar is weak 'cause the guys in charge think they have a credit card with no spending limit.
I've got to think there's something else going on here, especially comparing diesel to gas. Is that new ULSD (vs the older LSD) hurting things somehow? If so, any hope that issue could settle out in 3, 5 or 7 years?
AND, for those who think that government intervention is a wonderful panacea... the last government intervention on diesel I know about was mandating ULSD and new emissions standards. It seems to have made the fuel economy on 2007+ diesel trucks much much worse. Not sure if it contributed to the price of fuel at all but I don't think it helped any.
Is there still a Racetrack station on Hwy 33 and Rt 527 (Manalapan) ?
The one I know was on the corner of 33 and Five Points (Howell). They got shut down for some reason then re-opened under another name. That's where I bought today at 4.299. The GULF on 33local in Freehold was 4.499. They are less than a mile apart for cryin' out loud. Sometimes the cheapest diesel is actually in Farmingdale btw - little station on the edge of town - all the ambulances fill up there so I think they keep fresh fuel.
Knowing where to find cheap fuel was just a hobby when the variance was 3 cents, but now that it's 20-30 cents good information is worth real $$'s... I mean... at 90cents a tank I'm just being frugal, but for 9 DOLLARS a tank I could buy something else. (HEY! maybe a good service to offer via Sirius and Garmin! "fuel-finder" maybe I ought to trademark that real quick)
My thinking on the price of fuel including diesel is a group of people the produce profits with out producing a marketable product. They are called commodities traders. Just another form of legal gambling.
Of course this also applies to many other items that we need.
Refineries are highly limited in the mix of products they can produce. If the refinery is equipped to produce a certain proportion of distillate fuel (diesel, heating oil, jet fuel, etc., 33% of output) to the proportion of gasoline it makes (47% of output), and the market for gasoline weakens, the refinery is limited to how much distillate it can make. Due to the price hike in all fuels, gasoline consumption is down. Diesel fuel and the other distillate fuels have much less elasticity of demand. Truckers, farmers, boat operators, railroads, heavy equipment, etc., will still run and still buy the fuel. Diesel fuel is in high demand world wide, so there is little available to import at moderate cost.
If the refiners knew that the proportion of distillate to gasoline would remain as it is now, they could re-equip their refineries, but that takes years and costs millions.
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I really wish there were one simple answer to this...but fully believe that there isn't.
1. I don't know the percentages...but the percentage of "gas" drivers compared to "diesel" drivers has to be huge. So...do you mess with the largest group...or the smallest?
2. I know it's a third rail...but politics plays into this as well. I don't think we...the US...have had a sound, reasonable energy policy in place for many many years. Without googling...can you tell me the current Energy Secretary?
3. As was stated...diesel drives countries. With the emerging economies of China, India and others...diesel has become more globally in demand. And has been seen by the attempted purchase of an American oil company by China...they will stop at nothing to make sure they have the energy they feel they need.
4. As was also stated...you've got pure market speculation. And...just like the housing bubble that recently burst with horrible results...I fully believe that you will see the same with the oil bubble. The current price just can't be sustained for very long. I don't see how it can be. But...I am an average Joe and not an economist, so my opinions may not be worth the paper they are printed on.
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I Europe we are also affected by the high crude oil price.
Both gas and diesel has gone up in price significantly over the last year.
Having said that, we are living in different worlds of fuel prices,
at the moment diesel is just a bit over 8 US dollars a gallon in Sweden.
Gas is actually cheaper here now, first time ever.
I think there is only one thing we can be certain about,
that is that fuel prices will only move in one way, UP.
I honestly believe that the reason diesel has gotten so high is the U.S. is consuming so much in our wars overseas, I was told to have my joes burn our urine and******with diesel in Iraq. That is a whole lot of diesel for waste disposal! Not to mention that it takes up to 11 gallons of diesel to fire up an Abrams tank. After seeing the waste I cannot believe that the war machine's consumption has nothing to do with it.
Taken from Global Security.org:
# Fuel Consumption A tank will need approximately 300 gallons every eight hours; this will vary depending on mission, terrain, and weather. A single tank takes 10 minutes to refuel. Refueling and rearming of a tank platoon--four tanks--is approximately 30 minutes under ideal conditions. 0.6 miles per gallon.
# 60 gallons per hour when traveling cross-country
# 30+ gallons per hour while operating at a tactical ideal
# 10 gallons basic idle
# A mine plow will increase the fuel consummation rate of a tank by 25 percent
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