Off Road Diesel?

[Citydude]

The lifting cost of crude oil is higher than the oil is worth in some parts of Wyoming. Those wells are shut off until the value of crude goes back up.

 

[Diggin It]

Paid a buck and a quarter today.

 

[TractorGuy]

Had my drums filled last week. I don't have farm exemption so I still pay sales tax. $235 for 101 gallons delivered.

 

[troverman]

Same here. Waiting until they finally price in the current price of oil. Off road ought to be well under 2 bucks/gal and is not here yet. Funny how if crude goes up 10 bucks/gal, you'd see pump prices rise almost immediately, but let it drop 50%, and it will take months to match it at the pump. I just don't understand it......

Agree 100%. If the news media even mentions a fire at ONE refinery, or the possibility of trouble in the middle east...the price at the pump jumps the same day by 5-10 cents per gallon. Yet here we are being told a barrel of crude is selling for less than $0 and my stations haven't budged their price at all. And weeks from now when oil rises, the price won't ever drop, either. Massive ripoff; profit gouging by the fuel stations.

I'd agree.....except it will likely overshoot much higher down the road.

The purpose of the current Russia-Saudi price war is to drive American shale producers over a cliff. The reduced use of fuels by many industries (imagine how much the use of jet fuel has dropped) combined with the price war combined with the fact many of the shale producers have only stayed in business due to debt financing is going to leave a big hole in production from the US side of the equation.

IF the virus or financial contagion spills over into the refinery aspect, the future price of fuel could well go way up.

AND there is the almost predictable reaction of govt to reduced use.....raise tax on it to keep revenue nearly the same.....God forbid they should have to get by on less.

AND from the prepper point of view (which is how I look at a lot of the world), if you hold it, you own it (or at least have a better change at owning it )

So when it hits 1.50/gal or there about, yeah, I have an extra 500 gal tank I'm gonna call the Co-op and have them fill it. I'll throw some biocide and a gallon of PRI-D in the tank and let it sit. Money in the bank, so to speak.

The president wanted to fill the strategic reserves to help the small guys, and max our energy storage at low prices, but the left said no...doesn't help further our environmental goals. Meanwhile, people lose their jobs and our national security wanes...

Seems like the northeast has the slowest reductions in fuel prices. D2 is still @$2.89

I'm right across the river from you. Diesel is $2.69 for road; $2.29 off road. Gas is $1.99. Yet they say oil is selling for $-40/barrel. Just for giggles, the difference in combined federal and state tax for gas vs diesel in NH is six cents, yet there is an additional sixty cents between these fuel types, of course.

They'll tell you that the price is based on the fuel that was in the pipe line when they refined it.
In other words the pump price was last months barrel purchase.

Funny thing is next months price won't reflect today's low barrel price.

Absolutely correct.

 

[Diggin It]

Keep in mind that facilities costs don't drop with the barrel price. They still have to pay staff and drivers, maintain trucks and stations, etc.

I can't explain why prices vary so much by region other than transportation and regulation costs (inspections, taxes, etc.). Like I said above, I paid $1.25 for ORD the other day and $1.16 for No Lead in the car today.

 

[sodamo]

Ethanol free today - $3.239. Not seeing a lot of drop here.

 

[BrokenTrack]

I do not see it as price gouging, I see it as a negative side of the free market system.

What is happening is, a service station bought a truckload of fuel 2 months ago for $2 per gallon...9000 gallons, and then Black Swan hit. That stopped people from doing much, including buying fuel. So the same fuel they bought is just sitting there in their tanks.

Now the price starts dropping for crude, but that does not change anything, the fuel they have, they bought for $2 per gallon.

IF they sell it for $1.50 a gallon, they lose a lot of money! But here is the thing. The Pandemic is something that is predictable. Unlike most fuel price fluctuations where you do not know what is going to happen or for how long, here they do. As long as the pandemic is on, no fuel will be bought, so they just have to wait it out. When the pandemic lifts, so will crude prices, and they can sell the same fuel they bought for $2 per gallon 2 months ago, for $3.00 again.

If the lower their prices, they just lose money on every gallon. If they keep them high, they do not sell as much fuel during this time period, but they are not going to lose any money either.

 

[BrokenTrack]

The reason why off road fuel is seasonal is, in places like Maine, where we just got more snow last night, there is not much going on, including fuel sales. But in places where agriculture is working, they are selling a lot of fuel...the planting season is on. Those fuel companies do not have fuel in their tanks when they bought it at $2 per gallon. They bought it at $1 per gallon, so they can sell it cheaper, since they bought it cheaper.

It is supply and demand: at its best and worst.

 

[rswyan]

Was quoted $1.39 for ORD yesterday, 150 gallon minimum.

So it's come down here by about $0.20 a gallon in the last week.

 

[troverman]

I do not see it as price gouging, I see it as a negative side of the free market system.

What is happening is, a service station bought a truckload of fuel 2 months ago for $2 per gallon...9000 gallons, and then Black Swan hit. That stopped people from doing much, including buying fuel. So the same fuel they bought is just sitting there in their tanks.

Now the price starts dropping for crude, but that does not change anything, the fuel they have, they bought for $2 per gallon.

IF they sell it for $1.50 a gallon, they lose a lot of money! But here is the thing. The Pandemic is something that is predictable. Unlike most fuel price fluctuations where you do not know what is going to happen or for how long, here they do. As long as the pandemic is on, no fuel will be bought, so they just have to wait it out. When the pandemic lifts, so will crude prices, and they can sell the same fuel they bought for $2 per gallon 2 months ago, for $3.00 again.

If the lower their prices, they just lose money on every gallon. If they keep them high, they do not sell as much fuel during this time period, but they are not going to lose any money either.

I'm not totally buying that explanation. The fuel stations in my town appear to be just as busy as always. There is an influx of out of state travelers, unfortunately, as they head north to try to find less contaminated places to stay. And there is the usual nearly constant flow of people fueling as usual. Is it less? Perhaps, but I've seen tankers unloading multiple times (I work across the street from one of the busier stations in town). Trucker traffic is still flowing...especially those bringing groceries, household supplies, etc. Construction projects are on going. NH has much less onerous restrictions than some states, fortunately, and more people are working. Yet the fuel prices have held steady for about 3 weeks now. The fuel stations are definitely holding cheaper fuel in the ground, but refuse to pass the savings on to the consumer.