Quote:
Originally Posted by vsd
The other day on the news they reported that several refineries in California were actually cutting back on production because there is actually an excess of supply. The gas prices are artificially high, it's no secret, and I've said it before and I'll say it again, gas companies are dinosaurs, and all dinosaurs will die.
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That is correct but it doesn't give the whole picture.
Refinery capacity is running around 85% nationwide. They started cutting back production a few months ago so this is not due to the change to summer gasoline blends.
They cutting back because their profit margins started shrinking drastically as oil prices jumped. Their sole reason for cutting back is to intentionally raise prices at the wholesale level so they can increase those margins.
Even when we start switching to summer gasoline blends refinery production usually doesn't drop below 90%.