An Oil Thread (sort of)
09-28-2015, 09:57 AM
#1
Retired- but not tired!
SuperBike
Thread Starter
Join Date: Aug 2010
Location: Pittsburgh
Posts: 1,478
An Oil Thread (sort of)
OK here's my query to the collected wisdom here on the forum:
We all saw gasoline prices drop significantly over the past few months here in the U.S. But I see nothing close to a corresponding drop in motor oil prices. They make gasoline out of oil, why is something less refined more expensive? But I never worked a day of my life in the oil industry so what do I know?
Who's got the inside dope on why motor oil costs so much?
It's a serious question on my part, but I know we all like to be entertained (and will not be restrained) so all conspiracy theories are welcome too.
We all saw gasoline prices drop significantly over the past few months here in the U.S. But I see nothing close to a corresponding drop in motor oil prices. They make gasoline out of oil, why is something less refined more expensive? But I never worked a day of my life in the oil industry so what do I know?
Who's got the inside dope on why motor oil costs so much?
It's a serious question on my part, but I know we all like to be entertained (and will not be restrained) so all conspiracy theories are welcome too.
09-28-2015, 01:33 PM
#2
Well take off, eh.
SuperBike
Join Date: Jun 2012
Location: QC, Canada
Posts: 1,201
Just my 2 cents for your entertainment pleasure
Oil companies still need to make the big bucks. Gasoline is a tough contender since there are many resellers grouped up in one small region. Price wars occur.
With oil, there is much less commercial exposure. Meaning they do not have a street corner garage just for oil. There is also less of a direct link with motor oil/ price of oil. So they do not need to play with this as they do with the price of gasoline.
In the US, you are perhaps the luckiest ones to benefit from this drop in the price of gas. The barrel trades in US dollars, and you don't have the outrageous taxes most of the rest of us in the world deal with.
But, to get back to my first point, oil companies need to make the big bucks, this is one example in my area. The price of gas has only dropped by 9% since July of 2014. Why ? Well, the profit margin was about 8-10 cents a liter from the refinery, to the retailer. Ever since the barrel has dropped to about 50$, the profit margin is now 24-26 cents a liter.
So, no matter how low the cost of a barrel of oil will be...we'll get it up the ****.
To get back to the original point, why is motor oil still so high ? Hell I don't know, I'm just a guy on the internet.
Oil companies still need to make the big bucks. Gasoline is a tough contender since there are many resellers grouped up in one small region. Price wars occur.
With oil, there is much less commercial exposure. Meaning they do not have a street corner garage just for oil. There is also less of a direct link with motor oil/ price of oil. So they do not need to play with this as they do with the price of gasoline.
In the US, you are perhaps the luckiest ones to benefit from this drop in the price of gas. The barrel trades in US dollars, and you don't have the outrageous taxes most of the rest of us in the world deal with.
But, to get back to my first point, oil companies need to make the big bucks, this is one example in my area. The price of gas has only dropped by 9% since July of 2014. Why ? Well, the profit margin was about 8-10 cents a liter from the refinery, to the retailer. Ever since the barrel has dropped to about 50$, the profit margin is now 24-26 cents a liter.
So, no matter how low the cost of a barrel of oil will be...we'll get it up the ****.
To get back to the original point, why is motor oil still so high ? Hell I don't know, I'm just a guy on the internet.
09-30-2015, 07:27 AM
#4
Retired- but not tired!
SuperBike
Thread Starter
Join Date: Aug 2010
Location: Pittsburgh
Posts: 1,478
Yeah I figure all the rules of "always rape the customer" still apply.
However in view of the fact gasoline in my area is down over a dollar from a couple years ago I have to presume in a competitive marketplace someone jockeying for market share would start to put downward pressure on motor oil pricing.
Basically motor oil cost tracked gasoline price increases while it was going up, but now more than a year later has not tracked the downward change.
However in view of the fact gasoline in my area is down over a dollar from a couple years ago I have to presume in a competitive marketplace someone jockeying for market share would start to put downward pressure on motor oil pricing.
Basically motor oil cost tracked gasoline price increases while it was going up, but now more than a year later has not tracked the downward change.
10-01-2015, 05:11 PM
#5
Senior Member
SuperBike
Join Date: Sep 2010
Location: Bisbee, AZ
Posts: 1,873
Yup. Now why this isn't a real oil thread. It's because of the lack of questions like, why can't one use oil designed for diesel engines, or why does the shifting improve with f**k**g expensive synthetic moto oils, or why the oil that your great uncle (fill in name) used was the best??? Then follow with ruffled feelings and such. That is an oil thread!
10-09-2015, 07:26 AM
#7
Senior Member
Superstock
Join Date: Mar 2015
Location: San Fran Freako
Posts: 393
Its nearly impossible to build a new refinery in the US. So the old existing refineries have to produce whatever amount they can. This may limit supply and increases prices.
Taxes and (often worthless) government regulation put pressure on prices as well.
"Evil oil companies" are mostly owned by shareholders and 401k investors. Like us.
Is this an oil thread yet?
Taxes and (often worthless) government regulation put pressure on prices as well.
"Evil oil companies" are mostly owned by shareholders and 401k investors. Like us.
Is this an oil thread yet?
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