Oil Falls Below $40 for First Time Since 2009 as Glut Grows

Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by ams6110 on Friday August 21, 2015 @05:11PM (#10100290)

Refining capacity doesn't increase because of a drop in crude oil prices. If supply of gasoline cannot be increased, prices will not fall even if the raw crude price falls.

The EPA has been hostile to refinery expansion or new refinery construction.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by sliverstorm on Friday August 21, 2015 @05:14PM (#10100303)

Capacity doesn't increase, but costs do decrease as the cost of raw materials drops.

Now, obviously price is only partly determined by cost.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by pm90 on Friday August 21, 2015 @06:29PM (#10100651)

That's kinda the whole point. There is nothing for refineries to gain by reducing the price of gas because...nobody is going to sell gas at a lower price and take over the market because...the EPA does not allow one to build refineries.

Free markets y'all.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by mtviewdave on Saturday August 22, 2015 @02:46PM (#10103313)

>the EPA does not allow one to build refineries

Two refineries have opened in the US this year:

http://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by guelo on Saturday August 22, 2015 @02:38AM (#10101751)

Free markets don't account for negative externalities so they have to be regulated y'all. In any case, gasoline prices do move so there must be some market forces at work, but it's a mystery at least to me. I'd love to read an explanation.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by OniBait on Friday August 21, 2015 @07:16PM (#10100825)

So much this. Price is driven by supply and demand. Not the cost of materials.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by brianwawok on Sunday August 23, 2015 @11:45AM (#10105772)

But price changes supply, no?

Some oil is $1 a barrel to pump. It will always be worth pumping.

Some oil is $50 a barrel to pump. It is only worth it when oil price is greater than $50 a barrel.

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Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows by mhuffman on Friday August 21, 2015 @07:55PM (#10100955)

This is more of a lack of competition issue. A lot of gas suppliers have regional contractors that basically have a lock on entire regions and their prices. There is no incentive to reduce price.

Also, since we can not export crude, but can export distillates, we can sell gas to other countries, increasing demand to some extent.

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