Diesel Spikes to WTF Record $5.51, Gasoline Jumps to $4.18

But wait a minute… crude oil futures are far below a record.

By Wolf Richter for WOLF STREET.

The average retail price of No. 2 highway diesel spiked to $5.51 per gallon at the pump on Monday May 2, the highest ever, the US Energy Department’s EIA reported late Monday, based on its surveys of gas stations conducted during the day. This comes despite crude oil prices that have come down from the March 8 peak.

On a year-over-year basis, the price of diesel has now jumped by $2.37 per gallon, or by 75%! Over the past four months, diesel has spiked by nearly 50%. This price increase puts additional cost pressures on truckers. And it will be passed on to everything that is moved by truck, which sooner or later is nearly every product being sold, piling additional costs on households, offices, construction sites, and manufacturing plants:

The prior record era for diesel occurred in 2008 and peaked in July that year at $4.76. Demand destruction related to the Financial Crisis, the housing bust, and the construction bust then killed the price spike.

But adjusted for CPI inflation, the price at the time of $4.76 would be $6.22 today. So we still have a long way to go.

The average price of all grades of gasoline at the pump jumped to $4.18 per gallon on Monday, the second week in a row of increases, and was up 45% from a year ago, according to the EIA late Monday. But this was still lower than the record on Monday March 14 of $4.32:

Adjusted for CPI inflation, it’s far from a record. In July 2008, gasoline hit $4.11, which in today’s CPI adjusted dollars would be $5.37 a gallon.

But wait a minute… crude oil WTI futures at $105 a barrel are roughly where they’d been at the end of March, and are below where they’d been in 2013 and 2014, and well below the peak in July 2008, when they’d briefly kissed $150 a barrel.

And the astounding mind-bender: today’s price of $105 a barrel is up from minus $37 in April 2020.

Adjusted for CPI inflation, WTI futures of $150 a barrel back in July 2008 would be $196 today. So, comparatively speaking, the US economy hasn’t seen anything yet. For an actual oil shock to set in, prices would have to be much higher – and they might still get there.

Gasoline futures have been horribly volatile since February, spiking and plunging from one day to the next, but since mid-April have trended upward (chart via Investing.com).

This idea that somehow crude oil, diesel, and gasoline prices would quietly go back to “normal” seems farfetched.

What is the case though is that the inflationary mindset has thoroughly taken over, as the oil industry and gas stations were easily able to mark up the price of diesel to record levels, given the massive demand from truckers. And they were able to mark up the price of gasoline to near-record levels. And they were able to do all this, and not trigger a buyers’ strike yet, though crude oil remains 30% below record levels, which points at an extraordinary inflationary mindset where customers just pay whatever.

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  165 comments for “Diesel Spikes to WTF Record $5.51, Gasoline Jumps to $4.18

  1. SocalJimObjects says:

    Consumers can’t even spell the word “futures” and to be fair, some people can’t WFH anymore, although I am not sure how close we are to pre pandemic levels when it comes to commuting to work. I am guessing we are still pretty far.

    Anyway, if you bet on muppets, you’ll never go wrong.

    • SocalJimObjects says:

      Quoting from CNN: “Americans got into a lot more debt in February as rampant inflation kept up the pressure, the Federal Reserve’s consumer credit report showed Thursday.
      Debt levels jumped by nearly $42 billion to a total of almost $4.5 trillion. That’s an annual increase of 11.3%, seasonally adjusted, far outperforming economists’ expectations and setting a new high. In January, total credit had grown only 2.4%.”

      “Whatever” seems to be partly driven by credit. The Muppets strike BACK!!!

      • phleep says:

        They’ll be crying for a bailout in no time. And the gov will give it to them, at the expense of anyone who has been prudent. The gov/credit complex seems to want a nation of zombies with mouths barely above the waterline. Where is the leadership urging otherwise?

        It is your God-given right to be a careless fool and as a result, constantly angry and blaming anyone but oneself. And electing idiots who feed this mentality.

        • Wisdom Seeker says:

          Gov can’t be handing out bailouts to fight inflation, because it’s the bailouts that are creating the excess credit that’s causing the inflation.

          When Gov is facing budget squeeze due to rising interest payments, and inflation is pressuring spending, the political calculus for bailouts will be far, far different…

        • c_heale says:

          The bailouts to the banks and the elite have been going on since 2008. This has caused inflation in housing and other assets. This is one component of the current inflation rate. The second and more important one is that the C19 logistics crisis, and sanctions due to the Ukraine war, as well as global warming, have caused a shortage in essential resources, and in the near future a food shortage. This cannot be alleviated without a complete reversal in current US foreign policy, which with the current controlling vested interests is impossible.

    • Djreef says:

      Meh, we’re just buying less. We don’t need more crap, anyway.

      • Whatsmynameagain says:

        Do you mean the government will bail out consumers or corporations in debt? Because the later.. 100%. The former would need to have their pitchforks out and I don’t think that’s happening. Consumers are going to get buried while they’re still gasping.

        • joedidee says:

          one ONLY NEEDS TO WATCH calendar to KNOW memorial day is here in couple weeks and SUMMER FUEL PRICES NEED ANOTHER nudge UPWARD
          in 2022 that means another $1 per gallon
          can’t wait to see PRICE OF EVERYTHING up another 50%
          inflation in 2021 – 30%(see devaluation of fiat $dollar)
          so far in 2022 it’s 30% AGAIN
          with another 30% coming down road in TRUCKS
          but at least workers got their $15 minimum wage
          HOW”S THAT WORKING OUT

      • NBay says:

        No, we don’t need more crap.

        What we DO NEED is more exercise, a much more vegetarian diet, less organized religion (and ALL TAXED), much smaller cars and much smaller homes and a GODDAMNED COMPREHENSIVE GREEN NEW INDUSTRY ( with NO ethanol program) paid for by 60’s (or at LEAST 70s) income and estate taxes with NO “investing” loopholes (or any other kind) and an IRS that is part of the military and operates on a Bounty Hunter model, and a Constitutional Maximum Net Worth.
        Then we can take on the big one , ZPG.
        (And as long as I’m dream ranting, force everyone to play volleyball)

        • Alex says:

          Here!! Here!!….or is it Hear!! Hear!!

          except for the less religion…less government imposed religion and preaching…but leave people’s right to freely practice…no religion sponsorship in Federal or state or local government and governmental entities.

          But Nbay I’m here for everything else, lol…oh you can keep the volleyball:).

        • NBay says:

          Thanks Alex, but I still think you should read up on Calvinism…maybe just read Weber…..nothing good will happen to our species’ culture until we finally admit we are quite alone and on our own in the universe…..and as far as VB goes, I’m (was) 6’2 when I played ball before my back was crushed over the years from W-2 work, but if you are short, a good setter is always worth 100 times what a guy like me was. It’s the ultimate team sport. Plus one is thrown out for trash talking the other team or the refs, so it’s really civil and upbeat.

        • RT says:

          Human society will always have religions, the only question is what kind of religion will we have? Be it Christianity, Islam or philosophical religions like Daoism Confucianism, or atheistic religion such as secular humanism and wokeism.

          Religion will always be here because humans realize the truth that we are not here by ourselves and we are not the end all be all. The search for the spiritual has always been here with us and will continue to be, because in truth and reality we are more than just physical beings.

          And if the government has the power to establish the IRS like you wanted and if the government has the power to “limit” wealth, then we might just as well move to Communist China or North Korea.

        • NBay says:

          Preach it brother! The truth, hallelujah and amen!!!!!!!!!

          Where is your collection box? I’m inspired and stoked, now that I know, “I am more than I am”!

          Language and culture are weird, eh?

          Didn’t mean to be one of those dirty commies, but I guarantee you, they have the same body you and I do, all of them.

        • NBay says:

          And PLEASE google Barry Goldwater’s famous religious quote! He was a hell of a lot more right wing than you! Drank damned expensive scotch, too.

        • 91B20 1stCav (AUS) says:

          RT-hm, your statement makes me wonder if ‘religion/religions’ (not sure if you implied an eventual ‘one true religion’) could be the root of a desire for anarchy in general human society…

          using a poor analogy to Marx’ comments about religion (and, by extension, personal ethics), religion-backed Prohibition ultimately failed to work against the ‘evils of alcohol’. returning us again to the messy, decidedly unsexy, and to-be-avoided-at-all-costs tasks of constructing ‘fair-as-possible, enforcable, effective regulation’.

          or fiat rule.

          or anarchy.

          may we all find a better day.

  2. KPL says:

    “where customers just pay whatever”

    till he can’t…
    How or when it will happen is anybody’s guess (like market fell in Feb 2022, housing prices in 2006 when buyers suddenly did not turn up)

    • cas127 says:

      Agreed.

      “Things that can’t go on forever…stop.”

      Wolf,

      I wonder what your takes are on the following…

      1) Could the diesel price spikes at least be partially attributable to some commodity speculation (a la 2009 commodity boom) that anticipates some near future emergency money printing (again a la 2009 era).

      **I know** that currently the surface evidence is that the Fed is in tightening mode…but some players may see the underlying economy as so weak, they are betting (via commodities) that the Fed will have to do an emergency reverse (in 6 to 12 months) of the tightening.

      In the fall of 2018, the Fed seemed surprised that a pathetic hike in 10 yrs to 3% caused a rapid 20% fall in the equity mkts. In a panic they reversed rate hiking course.

      Commodity speculators may be envisioning a replay of 2009 and 2018. Look at the equity gutting the tiniest of Fed tightenings is causing (predictably).

      2) US domestic oil production seems pretty slow to respond to these price hikes (especially given all the drilled-but-uncompleted wells out there) – any thoughts aa to why?

      • Leo1992 says:

        One more thing that everybody is missing is the soaring cost of Diesel, Gas and Fertilizers for use in Agriculture. Farms below 100 acres are no longer profitable, larger farms are cultivating only with hope that they can mark up produce by > 50%. Expect food inflation to explode. Some farms are having hard time getting fertilizers.

        Fed must set its priorities right and raise interest rate at least 1% so that interest rates are rising faster than inflation.

        The whole country needs to get its priority right and spend on essentials first, based on what they actually earn, rather than basing spending on virtual home equity and bitcoins that will just vanish. We rely on our leaders to show us the way and they seem to be pointing us to a cliff!

        • Harrold says:

          Wheat farmers should make out ok.

          Russia won’t be exporting any wheat and farmers in Ukraine are not able to plant this spring.

        • Dan Romig says:

          Harold,

          No, wheat farmers are not OK in the USA. These planting delays are costing yield. From yesterday’s Farm Net News, Grand Forks:

          “Spring wheat could lose acres if planting continues to delay in portions of the Northern Plains. Growers are between a rock and a hard spot this year. We’ve got a logistical issue of trying to get fertilizer and crop protection products lined-up as well. Late season acreage changes could be less nimble, because of the added complexity.”

          As I commented in the past couple of days, I spoke with Pete Friederichs on Saturday, and they will not get in for at least two weeks. He is between Fergus Falls & Breckenridge MN, at the south end of the spring wheat belt. Things are only worse as you go north to Grand Forks. Early to mid April is ideal to be planted.

          Winter wheat crops in the heartland are stressed this year as well. Harvest is not far off, and we’ll see how things go when the combines are running.

          Wolf ain’t gonna like this either, “In Canada, barley acres are now forecast to be down nine percent year-over-year to 7.5 million acres.

          A few years ago, Pete was President of the National Barley Growers Association, and testified before Congress in DC, “Without barley, there is no beer.” North Dakota was set for a 28% increase in barley acres this year, and in the USA, that’s the main location for barley. It should be less impacted by rain and wet fields, as barley is mostly west of the prime hard red spring wheat region.

          From a business side, Syngenta has been doing well. Syngenta Group sales are up 25% from the same quarter last year and seed sales are up 15%.

          On a gasoline topic: The short-sighted people in the EPA, and President Biden have officially issued the “Emergency E-15 summertime sales waiver.” Again, corn is better used to fuel people’s cars and trucks than it is their bodies. At least it appears that way, in the eyes of politicians and corporations like ADM.

      • Wolf Richter says:

        I see multiple factors: ineffective or lack of competition on the wholesale and retail side, the inflationary mindset, booming exports of refined product (diesel, gasoline, jet fuel etc.), strong demand for diesel from truckers, etc.

        The US shale oil industry can ramp up pretty quickly, but not overnight. And they’re in no hurry to ramp up and cause the price to crash again. Lots of these companies went bankrupt during the 1014-2020 oil bust or oil busts, and now they want to keep the price where they can make money. This is called “discipline” in the industry. $100+ a barrel is good for frackers.

        • Bart says:

          Wolf,

          Saw a presentaion from Art Bermana few months back saying 90% of fracked oil is exported. Had heard elsewhere years ago that the stuff we frack n the US is not the ideal product for refining into gas for US market. I guess what i am saying and asking is that if we dont use the fracked stuff here, why is it a concern other that putting some non-auto petroleum onto the world market. Hope you are well.

        • Wolf Richter says:

          Lots of nonsense circling around out there.

        • Alex says:

          C’mon Wolf!

          The ramping up of shale production or any other oil/gas production in America will not lead to reduced costs or energy to American citizens because Congress removed the export ban in 2015.

          Marginal increases in domestic production get sent overseas to play the arbitrage in WTI vs Brent crude prices.

          Trump’s GAO (U.S. Government Accountability) Office did a report on the effect of lifting the ban and it’s exactly what oil/gas producers intended.

          link to the report is here:
          https://www.gao.gov/products/gao-21-118

          The results of the GAO study showed that lifting the ban resulted in:

          – Expanding the market for U.S. crude oil to overseas buyers

          – Allowing producers to charge higher prices relative to comparable foreign oil

          – Decreasing profit margins for petroleum refiners as they paid more for domestic crude oil relative to international prices

          – Decreasing demand for U.S. tankers to move domestic oil, leading to declines in the U.S. shipping industry

          Stop with this crap about ‘drill baby, drill’….it won’t help until an export ban is back in place.

          Yall keep bringing up this droll about producing more are just repeating the lobbyist’s message that will just result in more profit for domestic oil producers, but not lower prices for consumers.

          If you want to lower prices for Americans then ban oil and natural gas exports!!! If globalization is indeed ending then we better get onboard.

          American oil/nat gas for Americans!

        • Wolf Richter says:

          Shessh. Oil is a global commodity. Soaring US production crashed the global supply-demand balance and thereby the price of oil. Starting in July 2014, the price crashed globally, not just in the US as the US became the largest producer in the world. US production can do this again. And no one in the industry wants that.

      • Anthony A. says:

        Oil service firms have had trouble hiring back well completion and frac crews due to the labor shortage. Also, when things went south during the pandemic, some oil service firms went BK and sold off their equipment. And as Wolf said above, export prices for diesel are much higher than selling diesel here.

        • Alex says:

          Right oil crashed worldwide when shale came on because it removed the US as a buyer from the world oil market….not easy to replace that demand quickly.

          But drilling more, producing more will not lower price for us, it will bring down world price but not our domestic price….the equilibrium price will be found….Brent down, WTI up to balance.

  3. SwissBrit says:

    At about $1.10 per litre for gas and $1.45 for diesel, there’s still quite a way to go before you’re at European prices – almost the double in fact.

    • LGC says:

      European prices are ALL taxes. it’s not comparable. Also you need to compare the size of Europe to the size of the US. European’s simply don’t understand how big the US is (or Russia for that matter)

      • 728huey says:

        Most Europeans also don’t understand why the USA didn’t invest more into creating public transportation either, but that’s a who,e separate article for Wolf to cover.

        • Dan Romig says:

          There is a controversy in the Twin Cities over construction costs, right of way access and a few other issues for a third light rail system linking downtown Minneapolis and the southwest suburbs (more affluent real estate, generally speaking) that is under way — slowly.

          My home is a brisk six minute walk due east, and toward the Mississippi, of the 38th Street light rail station between the Mall of America & MSP International, and the downtown. I do not need to use it, and it can mess up traffic during rush hour on the main corridor near me, MN Hwy. 55, but it is fantastic to have!

          I reckon, a world-class city has a light rail connection to downtown from its airport, if you look at the major cities on Earth. Not many places in the USA have this.

          In 2005, I was a senior Mech E project leader at the U of MN for seniors one semester. Our project was to design a light rail system around the existing freeway medians. Simply build them strait up, high enough to let vehicles pass beside and under. Run a narrow monorail on each side to connect point A to point B with existing infrastructure right-of-way paths that would be made as highways are reconstructed, which in Minnesota happens every decade or so.

          Seemed like a good idea, and it is much less expensive, as the students worked up the details, than the traditional railway set-up that is used now. However, none of the politicians wanted to try something new, and even look into the idea further, so that was the end of it. Wolf has seen the preliminary idea and basic model years and years ago. Very crude and at a beginning stage, but a good idea …. someday???

    • Infin says:

      I pay about $2.36 a litre for premium, a litre of regular goes for $2.05 in Vancouver.

  4. Sit23 says:

    In my country, diesel is US$7.20 a gallon. Plus US11cents a mile road tax. At 29mpg average, this is US$10.39, give or take a few cents. Outrageous. Over half, nearly two thirds, is tax. The natives are close to revolting over it.

    • Old School says:

      Humans are pretty inefficient machines. Takes a lot of calories to bicycle a mile. I get average person can go about 40 miles on 2000 calories which according to the Google cost on average about $11.00. Sure some can do better and eat for less but human body can’t compete with efficient energy transfer machine.

      My 50cc scoot gets just over 100 mpg which means at current price I can do 40 miles for around $1.50. The new Honda 125 motorcycle claims 175 mpg so 40 miles can be done for under $1.00 or about 10% the cost of bicycling.

      My point is even with high prices and taxes fuel is cheap to doing without it.

      • Marie says:

        What? 1 gallon of diesel is 150MJ. 2000 nutritional calories are 8.4 MJ.
        You just wasted 15x energy to travel the same distance 10x as fast.

      • Michael Gorback says:

        But the medical expenses when your flimsy vehicle gets flattened by a Ford Fiesta wipes out your savings. ;-)

        • NBay says:

          That reminds me, I forgot to add a 50 mph (small engines with limiters) speed limit to my rant. I’m all for kids having as much fun on bikes as I did when they are young enough to have the reflexes for it, older guys ride at more peril, but I do recommend a helmet. And all our new Mini Cooper (original sized) cars can have roll cages and 5 point harnesses as an option, and if it’s a pain in the butt to be “safer”, TS!
          And you can get any color you want and add bobble heads or dingleballs, bumperstickers, etc, so it’s well ‘personalized”.

          And now that I have taken a second pain pill and it is kicking in, I would like to ask a more relevant and civil question.
          I noticed how just the .25% hike changed the bond market a lot, and the stock market, so-so.
          What can be expected out of both from this weeks .50% hike?

        • Dan Romig says:

          The speed limit on River Road in Minneapolis is now 20 mph. I pass cars while riding my Bianchi occasionally.

          Disc brakes on the machine, and it stops on a dime from high speed on descents. Though not as fast as I was at half my age, still have the reflexes, intuition and bike handling skills that were honed in the Pro-Am peloton for many, many years, all over North America. Plus, a new knee & a new hip to rebuild the motor and get back to running speed.

          “Don’t try this at home, kids.” “Always wear a helmet!”

      • Putter says:

        Buy an ebike. Have fun and get exercise. You can adjust the assist to 5 different levels. I can do all my shopping within 3 miles. Just lock it outside the store and take the battery inside. I have baskets front and rear.

  5. Anthony says:

    Considering that diesel in the UK is roughly $8.00 a US gallon, then you begin to realise that with all the bigger trucks you all drive and the fact that you tend to drive much, much further to get anywhere (than tiny England), that you are paying more for youe diesel, in real terms, than highly taxed Brits.

    That really should not be happening……

    • SpencerG says:

      It shouldn’t happen AT ALL. Diesel is the first fuel that cooks off when oil is refined. It OUGHT to be cheaper than everything that comes out of a barrel of oil. In the gas crunch of the 1970s my parents bought a diesel Mercedes because diesel fuel was about a third cheaper than gasoline. That held true for a LONG time.

      But from 2006 to 2010 the Environmental Protection Agency required that Diesel for onroad use be refined from 5000 parts per million of sulfur down to 15 ppm of sulfur. It is now called Ultra-Low Sulfur Diesel (ULSD)

      Needless to say… it is no longer the cheapest type of fuel to produce. As Wolf says above… it now costs a third MORE than gasoline.

      • Hardigatti says:

        @ Spencer
        Not quite. Gasoline cooks off first. You get about 20 gal of gasoline, 12 gal of diesel and 4 gal of jet fuel out of a barrel of crude.

        • SpencerG says:

          If I have that part wrong I apologize. But I know that diesel was much cheaper than gasoline until the last decade or so.

        • RedRaider says:

          Can gasoline be further processed into useful things? The more we move towards EV the more of a waste product gasoline becomes. I don’t think gasoline is good for anything but ICE cars, is it? That’s an awful lot of waste per barrel of oil (and expensive).

        • NBay says:

          Red,
          As a small hydrocarbon, 8 carbons on avg, some branched (see octane rating), I imagine it lends itself to a LOT of easy organic chemistry modifications, starting with the famous “Barnyard Reaction” (Grignard? sp?) that everyone is taught in Org Chem.

    • Old School says:

      It would probably be fun to have someone write an article on the physics of ground transportation. From what I remember the big variables are weight, rolling resistance and wind resistance. Railroads are very efficient because rolling resistance of steel on steel is about 10 times less than rubber on concrete which is two times less than rubber on asphalt.

      Weight is a biggie and though big pickups are useful it is inefficient to use a 6000 lb truck as a daily driver when a 3000 lb car will do the job. Seems a little funny that the push is on to get full size pickups electric as a 6000 lb vehicle isn’t relatively green unless it’s doing what it was designed for which is hauling or towing. We know the reality is pickups are popular and profitable but to be green you don’t use 6000 lbs to haul a 200 lb. person around.

      • Dan Romig says:

        Bicycle racing has, in the last few years, done just that. Lower pressure and wider tires with latex inner tubes (for clinchers) surprisingly roll faster and cause less fatigue.

        In the past, it was thought narrow and high psi was the way to go, but there’s an inflection point at which higher psi takes a non-linear toll on ultimate performance. I run 25 mm at 90 psi front & 92 psi rear — adjusted for actual temperature outside.

        Lowering the psi causes a slight reduction in rolling efficiency, but a much higher risk of “pinch-puncture.” I may change to 28 mm tire, and 6 psi lower inflation on my next set of tires to experiment, and see what works best for me. Body mass is also a factor to take into account when deciding.

        (Ex racer with a physics degree, eh?)

        • Dan Romig says:

          Last comment. Also on deep V-section rims, it is more aerodynamically efficient to have the tire narrower than the rim.

        • Old School says:

          My son has just gotten into high performance bikes. I think he has about a $5000 bike. It seems a bottomless pit from a frugal person’s point of view. He seems a little obsessive over it, but that’s his nature. He is making good money and it’s a clean hobby.

        • NBay says:

          Still can’t beat nasty old F=MA…..except with better re-gen braking, the real key to cheaper powered personal transport for most of our driving situations.

          ..even the human powered stuff….although weight becomes a serious problem there.

          I think you will have to keep heating Minneapolis to stop…;).

      • Greg the American says:

        Re the physics of ground transportation per Old School,
        Without knowing for sure, I suspect a fully loaded tractor trailer is getting FAR better MPG per lbs hauled than any scooter.

        I also suspect if one was to do some averages on tons transported per gallon, the much berated SUV and pickup would rate out pretty well measured against the average vs. standard efficient person commuter cars.

        I understand that, particularly in CityVille, there are more than a few who transport only themselves in their larger vehicles during the work week. But as a category, larger vehicles are predominantly used to do larger jobs, and even our city commuter friends may be towing the boat on the weekend.

        I think the demonization of the larger vehicle is driven by knee jerk green politics rather than tons transported per gallon. People who choose vehicles such as pickups such as farmers, contractors, large families, property owners, are often hauling far more tons per gallon than anyone with a Prius.

        • NBay says:

          “Common sense is a collection of prejudices, usually accumulated by about age 18” -Albert Einstein

  6. Troy says:

    The price of oil is increasing even though our amazing administration is pumping a million barrels of oil into the economy from our reserves?

    I expected prices to drop maybe 5-10% since that about 1/20 of daily national use

    • endeavor says:

      Read a couple of weeks ago when the reserve plan was announced, that it is capable of a only 4-500,00 barrels a day extraction. This was quoted by a couple of people who worked in the industry. Can’t find posts now to back it up. But you know the government, they always exaggerate when it’s to their advantage

    • Wolfbay says:

      They estimated that draining the petroleum reserve would lower gas price 10 cents a gallon and converting more corn to ethanol another 10 cents a gallon. There is an increased risk that we could really need this reserve and the world may be facing severe food shortages. Temporarily lowering gas prices 20 cents a gallon with the current world situation makes no rational sense to me but it’s typical short sighted American policy.

    • Wisdom Seeker says:

      I heard that the SPR oil is being shipped to Europe so they don’t have to buy from Russia. It’s not supplying the US.

      • Old School says:

        Fed government rarely likes the price mechanism. Higher prices will reduce demand and increase supply. Maybe the suppliers don’t trust the government to not penalize them in the future for investing in “dirty” fossil fuel.

  7. Tom says:

    This is occurring while the Biden Administration drains 1 million barrels of oil from the Strategic Petroleum Reserve (SPR) a day. This will go on for 180 days. I have read that much of this oil isn’t being used here, it’s going overseas! Really?!

    The draining of the SPR is setting the US up for another potential crisis as what is removed isn’t being replaced. The SPR should not have been tapped to address the price of oil. It was not created for this purpose.Tom

    • Hardigatti says:

      Agree. SPR is supposed to be there for a real emergency. But the only emergency the politicians can see are the mid-term elections.

    • Anthony A. says:

      Tom, the SPR crude oil is sold by the gov and then distributed to buyers via brokered trades. That oil just goes into the “system” and in some cases, foreign firms are the “buyers”. On the first release they did, ExxonMobil bought a good chunk of it.

      This release game is more of a political stunt rather than a move to dramatically reduce retail gasoline and diesel prices.

  8. DenWayne says:

    Well maybe oil will be a luxury item for the oil boomers and the planet Earth will go back to the more beautiful garden place it was before we put up all the ugly shopping malls and parking lots. Just a dream that will probably never happen in the lifetimes of all us WS supporters.

    • Trailer Trash says:

      If oil becomes a luxury we will eat stone soup or re-learn to plant, cut, and thresh wheat by hand. Or maybe Case will restart their steam tractor production line.

      Fuel prices are destroying rural economies. I just paid over $900 to fill the oil tank with #2 fuel oil. That is 3/4 of my monthly pension and those 200 gallons will only last two months mid-winter.

      Atlantic Canada is even worse. They are paying C$2.50 PER LITER for diesel. At those prices they will not be planting potatoes and cutting lumber for long.

      People opposed to agriculture are proposing we eat what – Soylent Green?

      • NBay says:

        Why not? Read up on sialic acid and you will see why it is the BEST meat for us humans….if one is going to eat meat at all….I don’t…..very expensive and planet destroying.
        And dead people don’t care about anything…..just let them go in their OWN good time.

  9. c1ue says:

    Diesel has been exported from New York to Europe; that is likely one factor.
    Another is the winter to summer formulation changeover.
    Plus oilprice.com had a story about refineries upping their diesel vs gasoline output ratio; maybe a cracking target change?

    • Wolf Richter says:

      Diesel, gasoline, and jet fuel are big export products from California refineries to Latin America. California refineries import crude oil and export refined product. But California is cut off from the other producing regions in the US as there is no pipeline across the Rockies. An oligopoly of oil companies runs the show in California. And consequently, due to lack of competition and a controlled market diesel and gasoline prices are sky-high. Just about every governor complains about price fixing but no one is allowed to touch it. Any efforts get halted and fresh whitewash gets applied.

      • c1ue says:

        Oiprice had an article saying 2 million barrels per day of diesel/jet fuel/some other was going out of the east coast to Europe.
        I don’t know what the normal export amount is – but daily jumps of 3 to 5 cents and up nationally, for over a week thus far, bespeaks something beyond normal operations. Nor are California “typical” exports to Mexico etc the issue beyond the usual California special rules for refinery business.

  10. SpencerG says:

    Really??? Gasoline in my area is lower than it has been since March. I passed by my favorite station tonight and it was about four cents lower than last week. $3.58

    I live on the Gulf Coast a whopping ten miles from a major refinery so there aren’t a lot of transport costs. Still… they didn’t have any problems raising prices when they could. So I am a little surprised to see the National Average is going up.

    • SpencerG says:

      Well that didn’t last long. Same station priced gas last night at $3.69 per gallon.

  11. Brant Lee says:

    There ain’t no sensation of inflation like you get from fuel prices. In the 70s, everything was going up in price but fuel was the most visible and what people talked about.

    I haven’t understood how so many common people can comfortably be buying $60 to $100k vehicles the last few years even with stimulus. If there was a comfort zone owning low gas mileage cars and trucks, it’s gone now with fuel prices, especially the lower 50%.

    Even with the oil price coming down, gas prices will stay inflated now because the independent gas stations are gone. Just a few monopolized retailers are in control.

    • The Real Tony says:

      The price of sugar took a huge hike. I remember a can of soda pop in the vending machine went from 10 cents to a quarter in one fell swoop. This was in Canada

      • MiTurn says:

        The same with candy bars too. If I remember correctly, they made them 50% bigger at twice the previous price.

      • Harrold says:

        It may be time to finally end the sugar quotas and allow unlimited imports of sugar.

        • Wolfbay says:

          The sugar industry has the best political connections money can buy. Unlikely price supports will be changed.

    • endeavor says:

      I haven’t understood how so many common people can comfortably be buying $60 to $100k vehicles the last few years even with stimulus. If there was a comfort zone owning low gas mileage cars and trucks, it’s gone now with fuel prices, especially the lower 50%.

      Americans live in the moment with the latest ad campaign. They want what they want let the future take car of itself. That’s why there are so many sob stories.

      • NBay says:

        end,
        And as long as so many (60%+) continue to believe that they have a great big “Daddy” in the sky, taking care of them forever, they will continue to consume like irresponsible CHILDREN.
        The preachers don’t call them “Children of God” for nothing.

    • Old School says:

      Brant.

      Corporations and the Fed have encouraged consumption for 13 years and have most of us trained to be debt slaves.

  12. unamused says:

    Today’s report makes no mention of petrocorp profits, and neither do the comments so far. Apparently we’re conditioned to avoid thinking about such things. Two days ago USA Today reported that As gas prices soared, Exxon Mobil doubled profits from last year to $5.48 billion.

    It’s as if they’ve bred beef cattle who actually want to be eaten.

    Our Modern Marketing Culture teaches us to want too much, to feel entitled to too much, and are then required to need too much and to organize our lives to work our flat little asses off to get it. No wonder people are so unhappy.

    People used to care about things other than the getting and spending of money, but they take a pill for that now.

    “Ask your doctor if our overpriced drug is right for you!” and then you too can be an extremely attractive twenty-something woman with Type II diabetes, wearing not very much, dancing happily at a picture-perfect outdoor party full of smiling laughing people, or the tall, dark, and handsome twenty-something man who pushes her playfully into the swimming pool.

    Get to work, peons. Your treadmill is forty miles away and you have construction zones to negotiate. You’re falling behind on your debts and your credit card’s been hacked.

    • unamused says:

      Suckers.

    • james wordsworth says:

      Exactly.

      When individual “freeedumb” is the goal, simple evolution takes society exactly where it has gone.

      Those that ruthlessly exploit the environment best, prosper and grow, and so we get more and more of them. The more sensible fade away, unable to compete.

      Environment drives behaviour. Evolution rocks. (MMC does not)

      • NBay says:

        “It’s going to be fun to watch and see how long the meek can keep the earth once they inherit it”

        -Kin Hubbard. c1910

    • Bobbleheadlincoln says:

      With regards to “our flat little asses,” if that isn’t sarcasm, you’re ignoring the greatest public health epidemic (Obesity). Killing far more people than COVID. Maybe in the 1930’s Americans had no butts. Now they are butts. No offense to obese people. The origins of that issue are multifaceted and people don’t choose to be unhealthy.

      • Halibut says:

        The outer path of every grocery offers real food. All the inner aisles offer deadly processed trash with pictures of a big red healthy heart on box. Most people flock to the inner aisles and that explains most of the problem.

        • HotTub Marmalade says:

          Awesome comment Halibut… deadly processed trash ingredients = Sugar, high fructose corn syrup, SODIUM and TONS of processed carbs.

      • Anthony A. says:

        High fructose corn syrup (HFCS), find it in almost everything on the shelves of the grocery store. That the real killer.

        But it makes everything taste good!

        • Dan Romig says:

          A A,

          You are correct! Avoid that crap like the plague.

          A good example, now that summer is here on this north side of the equator is ice cream. most every brand, and especially the inexpensive ones, are loaded with it.

          RTFI (read the freakin’ ingredients).

      • Texas23 says:

        With regards to “people don’t choose to be unhealthy,” if that isn’t sarcasm, you’re ignoring free will.
        For Pete’s sake, take some personal responsibility if you’re stuffing your face with Hot Pockets & Twinkies then washing them down with a Coke. 🙄

    • VintageVNvet says:

      other than the ”flat” part of the rear ends una, I gotta agree with the rest;;;
      remember well when most families had one car, and were happy to have that one, as many families had no car at all and walked many miles many days
      remember well when the local GUV MINTs had older vehicles, and kept them running very similar to Cuba these days, by hook and by crook surely, buy mostly by a lot of creative effort to make or substitute ”stuff”
      remember well when mom took us all to JC Penny’s for our two pairs of pants, two shirts, etc., for the ENTIRE YEAR,,, and woe be us if and when we grew out of them,,,
      etc., etc.
      looks likely to be coming again to almost everybody every where in the world that’s not already similar

      • Anthony A. says:

        VVN, there are only a few guys here as old as you and I that actually remember that way of life.

        I doubt that it will revert back to that in our lifetimes. We can make so much “stuff’ so quickly anymore that there is never a want that can’t be filled in a moment.

        • Motorcycle Guy says:

          AA and VVN,
          Add me to that list of “mature folks.”
          I entered the 12th grade at 5 foot 8 inches and graduated at 6 foot 4 inches. You could literally see my pants rising up my legs.

        • 91B20 1stCav (AUS) says:

          MG-you,too (with attendant ‘growing pains’, no doubt…)? AND then a motorbiker to boot?

          whattaworld.

          may we all find a better day.

    • Trailer Trash says:

      BP just announced it cost them $20 Billion to dump their Russian assets. Not much profit there. Meanwhile a CNN article headline is:

      “BP profit more than doubles on ‘exceptional’ oil trading”

      • unamused says:

        The fossil fuel industry can be expected to more than make up such ‘losses’ with the $5 Trillions they get in public subsidies every year. And they’ll do just fine so long as they can continue to get vast returns on the millions they spend on climate change denialism, at least until their billions of customers die off in the next couple of decades.

        • Old School says:

          I used to plow through Valueline stock sheets. From what I remember the big oil companies paid extremely high tax rates unlike most big Tech.

    • NBay says:

      She is too damn well built and young to have type 2……but I guess that’s just “Marketing License”. Hair and dress flow perfectly. A real pleasure to watch. Wonder how many takes to get that all just right?

  13. james wordsworth says:

    Let’s take a step back.

    With the US$ soaring, almost all countries that import oil are seeing even bigger percentage increases. This is a disaster for many smaller nations and their balance of payments (and eventually their ability to pay foreign debt). Crisis ahead.

    The US consumer that drives a honky SUV can shut up about gas prices. Zero sympathy. The “I can have my cake and eat it too” attitude needs a serious adjustment in a world of limited resources.

    Higher prices do seem to have had an impact up north. Driving the 401 (major highway), the number of folks driving 120+ (fast lane) is way down and even the middle laners at 120 seem to have slowed to 110. So it seems at least a few know that driving a bit slower saves some $$

  14. Nicko2 says:

    We’re in 2022. Why are people still buying ICE vehicles? Electric is now.

    • Nemo 300 BLK says:

      How far does that electric F150 pull my 6500-pound boat and trailer at interstate speeds? How about my 4000-pound side-by-side and tandem trailer combo? What type of EV pulls a 24′ gooseneck trailer that I can haul two side-by-sides on? And I live two hours in any direction from a major city, so chargers aren’t even on the map here other than a single Tesla charger.

      • Djreef says:

        Sounds like you’re precisely one of those who’s apart of the problem.

        • COWG says:

          Djreef,

          Nemo was referring to the the availability of EVs that could replace the ICE equipment he uses now for the capabilities that he needs…

          Kind of a cheap shot there, brother…

        • rick m says:

          Freedom is a problem. Enjoy your superiority today. Just humanity. Not much to look at, but their music’s kinda quaint.

        • phleep says:

          Must be nice to live on a planet where one can extravagantly burn resources like that, putting on a show all for one’s vanity. Great American Infantile Nihilism at its most flagrant.

        • COWG says:

          C’mon , phleep…

          You’re cherry-picking here…

          While I don’t know Nemo’s personal situation, from his posts here, he has his own manufacturing company that I’m sure he’s busted his ass to build over time..l

          He also has some property on a lake where he’s building a barn-deminium where I’m sure he uses his boat and other “toys” to enjoy the life that he’s worked for… good on him, I say..

          His post was referring to the ICE vs EV debate…

          I don’t think he was bragging…at least I didn’t take it that way…

        • Anthony A. says:

          Djreef, I have a feeling that Nemo was there before the EV’s became road worthy and for sale. He’s not the problem. The EV folks are not building vehicles that can handle his equipment.

        • NBay says:

          F-1 is allowing body generated downforce for the first time since 1982. “porpoiseing” is the new problem with it on some cars, but they will all work it out. Still should make for a wild year, as one can now follow closer than 1 sec on curves, without front end wing washing out and then use KERS (BATTERY FROM REGEN BRAKING!) for overtaking.

          Lot more performance than anything you have ever driven (or even could) drive.

        • NBay says:

          OOPS! Was meant for Dan, below.

      • Wolf Richter says:

        Nemo 300 BLK,

        Once you understand that electric motors have flat torque curves, and even small electric motors have more torque than a much bigger diesel, and once you look what a flat torque curve with lots of torque does to towing, you’ll get rid of your diesels the first chance you get (not yet, EV truck production is behind schedule, supply chain problems). EVs are IDEAL for towing. And on the downhill side, you get to charge your batteries through regenerative braking instead of generating waste heat with your brakes and motor.

        But you’re encouraged to keep paying the godawful amounts for diesel. Keeps the industry thriving and fuel taxes flowing. You’re welcome, my pleasure.

        • Anthony says:

          As in electrified trains and the amounts they can pull, never mind the 60 ton trams that run through my city

        • Hardigatti says:

          The diesel engine era is coming to an end but not necessarily because of fuel prices. It used to be one of the most reliable, efficient combustion engines reaching 40% efficiency before 2000. There is more energy content in diesel than gasoline.

          More recently, the EPA mandates have pretty much destroyed the engine with exhaust filters (DPF), exhaust fluid injection (DEF) , etc. As an example, we now inject raw diesel fuel into the exhaust to burn off particulates (called regeneration) in the exhaust filter. You have to park your truck while this 30 minute process happens while the engine screams at 2000+ RPM. The emission systems are complex and maintenance intensive.

          I like clean air as much as the next guy. But the government mandates made diesel engine a technological dead end. A more nuanced approach might have worked better.

        • The horsepower comparisons raise some questions. You can do anything with a 300hp diesel motor, but apparently you need 500-700hp in an EV. Not only for towing they are pushing higher HP in cars. Why do you need that kind of power? It’s not like it’s free. The answer might be that to get that nice torque curve you need more output and that puts more demand on the battery which takes up cargo space. There is no reason semis can’t be governed at 35 mph, if they are self driving except of course they are sharing the road with mad max and his 700 hp Tesla.

        • Wolf Richter says:

          Ambrose Bierce,

          “You can do anything with a 300hp diesel motor,”

          No you can’t. A diesel engine in a truck rated at 300 hp cannot run flat-out at 300 hp output 24/7. You’ll ruin it. It’s not designed for that. It’s designed for highway use. You need a specially designed diesel, such as are used in diesel generators, and a diesel that can run at a steady 300 hp output 24/7 is a far bigger engine than the 300 hp engine in a truck.

          The BS out there is just stunning.

        • JeffD says:

          Sorry, Wolf. If you don’t mind a *much* lower range, you are correct. But physics is on the side of Nemo300BLK’s comment. See Jason Fenske’s December 2019 video on the subject, where he plugs in the numbers using the Tesla Cybertruck as an example, giving all details. He is using recent info, and no BS, and physics is physics, irrespective of which EV you choose.

        • Wolf Richter says:

          Such BS. The Cybertruck didn’t exist in 2019 and still doesn’t exist. People who concoct this BS are paid morons.

        • Dan Romig says:

          To me, the physics of a high performance car; and I have one and enjoy driving it, comes down to:
          Force = Mass x Acceleration
          Also seen as: Acceleration = Force/Mass

          EVs have tremendous force. This is great for one of the three parts of the performance equation, but only one. Straight line launch.

          The other two, which are equally important as the first, depend on mass being acted upon by forces to slow it down and to move it sideways. Stopping and turning a heavy battery mass is not ideal.

          I worship the God of Acceleration.

        • NBay says:

          See F-1 talk above, Dan.

        • Dan Romig says:

          NBay,

          I am a Formula 1 devotee. Porpoising is a result of the under tray suddenly losing down force. For Mercedes, it is a combination of a few things, but the mostly it is flexing of the floor.

          When the down force is gone, the car springs back up. Now, the wings and under tray go back to work and push the car down again. Rinse & repeat to get the pogo-stick effect.

          Computational dynamics and wind tunnel testing does not replicate what happens on the track accurately enough. The engineers in Brackley, UK are working on it.

          Red Bull is a car designed by Adrian Newey. He sees the air moving in his mind and draws the car. Then it is digitized and analyzed. Other teams do it digital first. Red Bull is the least affected by this new problem.

          KERS is fantastic technology. Before this year’s switch to E-10, Mercedes power plants were the best and most efficient engines on earth. Now they are not.

          But the equivalent of my M4 in the new i4 M50, an all EV, it’s an extra third the amount of mass to control. It is quicker and more powerful. Plus it has all-wheel drive. However, on a race track, my M4 is a better machine to drive. And, driving on the highway in traffic, at speed, my M4 is much more nimble — for real world comparison.

          “Not gonna do it. Wouldn’t be prudent at this juncture.”

          By the way, my Aprilia V4 Tuono goes zero to 200 kph in 8.1 seconds. I have done it nine seconds (right place & right time). Twin 330 mm dual puck computer contolled Brembos on the front bring it down incredibly fast too. It pulls 1 G lateral load on cloverleafs in a totally safe 45 degree lean angle, with plenty more to go if you want to push it.

          I like adrenaline.

        • NBay says:

          You can have my share of adrenaline Dan, I’m done seeking it.

        • NBay says:

          But I still have more time at over 100 and 200 mph, and pulling more g’s than you…….hotshot. ;)

        • Dan Romig says:

          NBay,

          Nope, I have never jumped out of an airplane. Flying down to earth must be an amazing sensory rush on one side of the brain & probably a tranquil, mystic vision on the other side of the brain — all at the same time. Just guessing???

          Take care …

        • 91B20 1stCav (AUS) says:

          only adding a comment here, but at present (in terms of towing) range probably depends on the geographic relief of where most of your work is. Electrics for the flatlands-absolutely. For the hilly/mountainous areas poorly-served by grid power (REA is long over and we can’t even get such rural areas adequately served nationally for internet or cel), probably not until battery weight/power density improves. Given our experience with our gas hybrid SUV in our hilly area, hybrid light-medium-heavy haulers may be the bridge for these areas until batteries progress more…

          may we all find a better day.

        • Dan Romig says:

          Minutes ago, I received a pre-order offer from BMW of North America for their new 2023 i7 all electric sedan. 300 mile range, 536 horsepower & 5,917 lbs (2,684 kg) USA spec curb weight.

          Six thousand pounds of sedan lumbering down the roadway!

        • NBay says:

          Nope, Dan, absolutely none of that. But it is sorta like the kind of talk we used to get laid….girls really dug it….”we are magical creatures”, etc, etc. Yeah, we had some groupies….nice side benefit.

          Except for the girls that jumped, they’d probably start laughing and then go tell everyone you were a wierdo and you’d get on less loads.

          YOU take care, I don’t play anymore.

        • Dan Romig says:

          The Miami Formula 1 race just finished. Adrian Newey has designed the most efficient car; with both straight line speed, and down force to corner quickly that does not over-stress the tires.

          The winning car had Max Verstappen behind the wheel. But Mr. Newey won today’s race.

    • Cobalt Programmer says:

      1. work and business based vehicles such as trucks are still ICE.
      2. Apart from cities, charging stations are not nearby
      3. Service centers are not around in rural areas and small towns
      4. There are early adapters and late adapters. People are waiting to see the drawbacks from electric cars.

    • Synergy says:

      Have you seen the mining operations for commodities needed for EVs? What happens when everyone wants an electric and they are affordable? EVs are easier said than done.

      • Wolf Richter says:

        Synergy,

        Have you seen the mining operations needed for the 2,000 pound ICE power trains? We’ve just gotten used to the wastefulness of ICE vehicles.

    • endeavor says:

      But the battery charges aren’t now.

    • Cynical Engineer says:

      Because EV’s don’t currently make economic sense:

      I can buy a solid high-quality ICE car new for $25,000. The *cheapest* EV’s with reasonable range start at about $45,000 and hit $60,000 pretty quickly.

      The ICE car can be used for both local and long-distance trips. Long-distance travel with an EV takes careful planning and extra trip time for charging. Or you need to keep an ICE around for those trips.

      My most recent car purchase was a used Infiniti for $18,000. The comparable EV was $80,000. I’m not going to spend $60,000 on fuel and repairs in the lifespan of this car.

      That being said, if you have the $60,000 and want the EV badly enough….go for it!

      • JeffD says:

        If you are a renter in a “high density housing” area, you can forget about electric. And since BART’s TOD mandate requires high density, you are screwed by government regulations to ever have a newly developed neighborhood with sufficient EV charging capacity.

    • kam says:

      Electric may work in cities. Electric trucks may work intra city but the rest of the country won’t be electric for many more decades, if ever.
      And reliable, constant-on electricity depends on Flooded valleys and reliable rain, and coal, nat gas, oil and nuclear, no matter how “natural and environmentally friendly” the green hucksters want to huck.
      Windmills and solar panels are always going to be intermittent, little better than riding a horse.

    • Old School says:

      Nicko2,

      I predict it’s going to be a slow rollout to EV as we start bumping into mining and economic constraints. Maybe we will end up with the typical family owning a newish EV and a legacy IC vehicle for a long time.

  15. Matthew Brandley says:

    What do many forget. Wto has required a new low sulfur fuel be used in ships around the world. This has doubled the price of diesel and shorted storage space. Add in the fact the largest refinery on the east coast went kaboom several years ago in Philadelphia. Several in n j have closed along with others in pa. Down south. Upper mid west. California. Over 12 total. Almost 4 million plus barrel a day off the market. Oil companies not investing in capex for new exploration. Thousands of duc wells. Blame big oil profits at reg rates and the wall st hedge funds that run them. Billions for buybacks. Zero for capex

  16. Brent says:

    It is possible to have shortages of diesel and glut of gas both at the same time, oil futures prices will not change anything.

    “Not all crude oil is the same—or equally valuable. Shale oil is an exceptionally light grade of oil. It contains about 90 percent of the energy of, say, Saudi Arabian crude, or the Oklahoma crude of yore. It comes out of the frack pipe almost as light as gasoline. It doesn’t yield much middle-grade transportation fuels such as diesel and aviation fuel.

    And, significantly, US refineries are not engineered to process it. We mix some of it at the refineries with heavier grades of conventional crude, but there’s only so much that can be used.

    Some of it is sent to other countries to mix with heavier crudes they produce, and a lot of that is sold at a discount because diesel engines predominate in European cars and shale oil doesn’t yield much of those heavier distillates.

    Some of US shale oil ends up being exported as “finished product,” i.e., gasoline, because that is the main distillate in shale oil, and in the midst of the current shale boom, we’re producing more gasoline than we can use domestically.

    Why don’t US oil companies build new refineries that can handle light shale oil? The fact that they’re not doing this tells us something: namely, that the enormous investment to do so would take the thirty-year lifetime of a refinery to amortize financially, and the industry knows that shale oil production has amuch shorter life expectancy than thirty years.

    Based on the history of the declining Bakken and Eagle Ford plays, the Permian Basin, too, may be in decline within a few years.

    In short, the oil companies recognize that they’re in a sunset industry (Art Berman’s “retirement party”). In the meantime, they are burning through cash.”
    (JHK, “Living in the Long Emergency”)

    • Anthony A. says:

      “Why don’t US oil companies build new refineries that can handle light shale oil?”

      Do you even have ANY IDEA what it takes to build a modern refinery in the U.S.?

      First of all, you need a location that has lots of available land, is near a huge amount of electrical power, has rail service into main lines, is serviced by big highways, and maybe near a coast where a deep water port is available. Try finding this and getting the locals to “allow” you to build a very big, power hungry, massive and somewhat ugly looking refinery.

      Even if you found the spot and got the locals to agree on construction, etc, you have to get air emission and construction permits that normally take 5 to 10 years to get through the state and federal permitting groups. Good luck with that!

      Even after you get approvals, you may face environmental groups that really don’t like what is going on and you may end up in law suits and experience work stoppages.

      Every try to order massive amounts of steel to build this complex 5 to 10 years in the future? How do you forecast costs?

      I was in the business for 35 years and have seen so much in the way of delays, it’s incredible that we have what we have. I have seen a 5 year wait for a permit to drill in the Gulf on a platform that is already producing. That’s the nonsense that is going on in the industry.

      • Brent says:

        Oil refineries are still being built:

        2019: Channelview, TX, Hartree Partners 35,000bpd
        2017: Corpus Christi, TX, Magellan Midstream Partners, 42,500bpd
        2015: Corpus Christi, TX, Buckeye Partners, 60,000bpd
        2015: Houston, TX, Petromax Refining, 25,000bpd
        2015: Galena Park, TX, Kinder Morgan, 84,000bpd

        But nothing on a scale of Motiva refinery in Port Arthur, TX, with a capacity of 607,000 bpd

  17. Swamp Creature says:

    Where’s Wolf’s “GAS STATION FROM HELL”? Haven’t seen it in a while. I think he’s afraid to post it on his site.

    I saw one on the TV News from California that would knock your socks off. The Truckers have had it and now are in another convoy headed for the DC Swamp. I hope they shut this whole f$ckin place down.

    • Wolf Richter says:

      “I think he’s afraid to post it on his site.”

      Nah, just got tired of it. Regular went to $6.19, then dropped back to $5.99 where it still is. It seems that $6 is the line in the sand, and enough people drove the extra mile to get gas on Lombard (a bunch of gas stations there) where it has remained below $6, the gas station from hell experienced enough of a drop in sales to where they lowered the price again. The benefits of competition, feeble as it is.

      • 91B20 1stCav (AUS) says:

        Wolf-the Bay Area ga$ ‘line in the sand’ has been around for some years prior to now, it’s just amazing to me that the ‘buyer’s strike’ point relating to it has always appeared to be so flexible…(might be a quant for that point vs. the area’s general economy, but no clue on the right number/categories of datapoints…).

        may we all find a better day.

  18. Ben Sargent says:

    I for sure don’t understand the latest jump in refined products. Maybe EU import demand or just traders looking for any place to put money.

  19. MiTurn says:

    I know that it is still too early, but a graph indicating gasoline consumption at the retail level would be telling. I suspect a lot of less travel this summer.

  20. Minutes says:

    Once they wipe away all my student loan debt I will be able to fill up all the time!

  21. Seneca’s Cliff says:

    Oh no, What’s gonna happen to the Bro’s who bought jacked up Diesel F350 superduties with loans backed by their etf’s and Netflix stock?

    • Ethan in NoVA says:

      Aren’t they all blue collars that do home remodeling? They will probably be fine, they can name their price for a while. Besides, it’s all a business write off.

  22. Phil says:

    It seems to me like we’re missing part of the data to reach the conclusion that this is just price markups without support. Did I overlook charts that show supply & sales volume of diesel and gasoline? As I understand it, the input price of crude oil is only one constraint on the production cost or gasoline and oil. I don’t dismiss the possibility that it’s simple profiteering, but it seems like we don’t have the data here to conclusively support that claim.

  23. DR DOOM says:

    You will pay out the ass and they ain’t shit you can do about it except quit buying. I have to fill up my Silverado 4×4 truck today and it is on the Big E. I wait till it is on the Big E because it pisses me off to buy gas. Of course human nature being what it is I would probably bitch about having to drive a few miles to fill up for free. We humans are never satisfied. So,I am going to go and bust a $100 to fill up and will have enough left over to hopefully buy a couple lbs of ground beef for burgers to grill this evening. I hope I can do it all again in a couple weeks for $100. I doubt it. Gonna enjoy them burgers. It’s Spring in the Smoky Mountains.

  24. Yancey Ward says:

    Crude oil can be refined into a variety of different products and in different ratios according to market demands. It isn’t like there is just gasoline, kerosene, and fuel oil coming out of the refineries. It is likely the demand for the alternate products is higher now than in 2008-2014, while the demand for the fuels is less on a relative basis.

  25. Yancey Ward says:

    In other words, what are the price levels for various polymer inputs that are also derived from crude oil cracking and oxidation processes?

  26. PS says:

    First, all oil is not created equally. Gulf Coast refineries are designed to process heavy oil to make gas, diesel, etc. The U.S. has now banned three producers of heavy oil: Iran, Venezuela and Russia. So feedstock supplies for U.S. heavy oil refineries are much higher, thus allowing distillate prices to rise. Plus, the U.S. also imports significant amounts of diesel from Russia and other countries…pipelines don’t cross the Rockies.

    Diesel demand is up worldwide. Plus South America is entering their winter, when they use more diesel, a fair amount imported from California refineries, which process lighter crude, but also have feedstock supply issues due to the Russian crude ban.

    Covid prevented many refineries in the U.S. from doing annual maintenance and upgrades in 2021. Refineries need to shut down to complete maintenance and this happens every spring. Maintenance shutdowns may be longer this spring. Also in the Covid fuel glut, a few refineries shut down (one in New Jersey). It takes months to get a refinery going again, if one can find the labor and equipment.

    Fracked oil is very light stuff. But U.S. heavy oil refineries aren’t willing to spend the $ to change over as they see the life of the shale boom is likely far shorter than the amortization of the changeover costs.

    Two old oil industry maxims. #1. Crack spreads rule. #2. The oil industry is a boom & bust industry. The solution to high prices is high prices and the solution to low prices is low prices.

  27. Michael Engel says:

    1) Fill the tank with less octane from 93 to 89, for as little as possible, because WTI probably have reached it’s peak. This morning business was slow.
    2) Walmart and Aldi. Old people do whatever it takes not to lose a
    (buggie) quarter. This morning business was slow.
    3) No bacon, no inflation :
    – corn : 0.50 each.
    – 20 lbs Basmati rice : 17.48.
    – six vine tomatoes : 2.59 // six Roma tomatoes : 0.95.
    – six mini cucumbers : 2.29.
    – Cauliflower : 2.49.
    – ten lbs Russet Potatoes : 4.99
    – Greek yogurt : 3.39.
    – three lbs Fuji : 3.69.
    – six oz blackberries : 2.09.
    – celery : 1.89.
    4) Yesterday restaurant cost more than all combine.

  28. Finster says:

    To listen to the mainstream media, you’d think people don’t like oil, gasoline and diesel. But it’s clear they really want them. No one can just “charge” $4.18 for a gallon of gas … someone else must be willing to pay it. If that weren’t the case, sellers could post any price they wanted, but it just would sit there unsold.

    It takes both sellers and buyers to set a price.

  29. Danno says:

    I trade oil futures daily….my opinion for what it’s worth (free..what do you get for nothing!) is:

    Oil prices will go down into the election as Biden needs something to help the Democrats, because if inflation is till up the wazoo, housing, stocks are falling, he needs something.

    Somehow, someway they will TRY and I say TRY to lower at least the price of oil which everyone uses daily and impacts us all…

  30. MarMar says:

    These prices, though historically high, are still well below the externalized costs of those fuels: health costs from air pollution, but most of all the ongoing and accelerating damages from the climate crisis.

  31. Michael Engel says:

    1) Natgas are rising. Replace NG with dozens of mini nukes in every region.
    2) Tomorrow +0.50%. In 2018 Germany negative rates bullied JP trade. He cut his losses, before it’s too late. Tomorrow the Dow might popup into the top of a downtrend channel coming from Mar 30 high.
    3) JP was a wall street trader. He built a $1.9T war chest for every scenario every option.

  32. Michael Gorback says:

    How much of the price of gas is tax? The gummint could lower prices by lowering taxes.

    And how many home solar systems and EVs would be sold without massive subsidies?

    Get the government out and let free markets do price discovery. Until the government stops dispensing favors there will be stupid economic dislocations.

    Humans, however stupid they may seem, are masters at optimization of their way of life given a level playing field and set of enforced rules to keep it level.

    • Wolf Richter says:

      Federal gas tax: $0.184 per gallon = 4.4% of the average price of gasoline. If you eliminate the federal gas tax, the average price of gas would collapse, as ZH might say, from $4.18 to $4.00…

      Then there are state taxes on gasoline, which vary by state. In California, the gas tax will be raised by 3 cents from about 50 cents to 53 cents, so that even after the hike, the total federal and CA gas taxes amount to about 12% of the total. If you cut that to zero, gas would still be a heck of lot more expensive than a year ago.

    • james wordsworth says:

      Clueless?

      “Get the government out and let free markets do price discovery.”

      Markets ignore externalities. There are huge environmental costs to using oil that you ARE NOT paying for. To incorporate externalities, gas should easily be north of $25 gallon.

      As another example its easy to make money if you don’t have pollution rules – and many folks do/did. That’s why we have governments – to protect us from the “let the market do what it wants” idiots.

      • 91B20 1stCav (AUS) says:

        jw-one the keys to the offshoring of our industries woes…

        may we all find a better day.

  33. David Hall says:

    Russia used to export diesel to Britain. Sanctions prevent Russian product tankers from docking in English ports.

    An oil pipeline project from Alberta to the Gulf Coast was blocked by climate lobbyists. America started to switch back to burning coal to make electricity as the price of natural gas rose.

    A refinery in Odessa, Ukraine was destroyed by the Russian military,

  34. Ben says:

    “But wait a minute… crude oil WTI futures at $105 a barrel are roughly where they’d been at the end of March, ”

    This tells me that China and other large consumers are buying large amounts of ‘off the market and off the books’, Russian and Iranian crude. China’s economy being in a tailspin will only sap demand.

    So high prices for Europe, courtesy the USA and low prices for others.

  35. Paul W says:

    “But adjusted for CPI inflation, the price at the time of $4.76 would be $6.22 today. So we still have a long way to go.”

    Not sure I follow the logic of adjusting for or comparing to CPI inflation. Diesel at $5.51 is about 15% more than $4.76 from 2008. So what matters is if truckers’ income/revenue is up more or less than 15% during that time, not what CPI has done. If truckers’ inc/rev is up 20% since 2008, then fuel costs are less impactful than 2008. If their inc/rev is up less than 15%, then fuel costs are more impactful than 2008.

    Somebody pls let me know if my logic makes sense.

  36. JeffD says:

    Have you ever watched a youtube video on head-to-head competition of electric chainsaws vs ICE chainsaws on hardwoods? No contest. I don’t see why it would be any different for electric trucks, other than the fact that electric trucks have the added load of the heavy batteries to carry uphill, especially in an EV truck fitted for long hauls.

    • Old School says:

      The review I saw on the Rivian EV pickup was good except for range and some charging stations aren’t set up for a truck towing a trailer. Those are real problems that need to be solved.

    • NBay says:

      You have taken “apples and oranges” to an all new level there, Jeff.
      Congrats!

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