President Biden: The NEW one and only politics thread

In a cartoon world, maybe.

Refining capacity at the moment is one of a gazillion factors influencing the supply side. Then counteract it with a gazillion other factors that influence the demand side. If you can tell me that nothing else will change between now and then, sure, it really is that simple. But if the price of oil rises, for example (watch the dollar -- it spiked and that brought the price of oil down from where it had run up to, but now the dollar may be very overbought and may be starting to back off), I wouldn't bet on it.

Regardless, it's not the conspiracy you are imagining. It's relatively basic supply and demand dynamics.

 

What you are saying is correct. ... but 90 percent utilization actually is doable by them. ... for the most part. 95 percent or 100 percent no, but they were up over 90 percent year after year prior to Covid. It's a very high utilization rate, but our refineries are probably the best maintained in the world. It's also pretty much been a necessity, because we aren't building any new refining capacity due to regulation (extreme up front costs, and there is no guarantee that they won't outlaw your business tomorrow, so nobody is willing to invest) and we have actually lost a few refineries in recent years -- one near Philadelphia went kaboom 2 or 3 years ago.

 

Do you understand that we don't live in a static world? If you know the future before I do, and can tell me that nothing else is going to change, sure.

But that isn't the cartoon world any of us are living in. If the price of oil is up $25 in the next month because the Federal Reserve suddenly cuts rates (the way the Bank of England did yesterday) and the dollar craters. ... or if oil demand spikes because the government mails out $10,000 stimulus checks to everyone because they realize we are in a recession. ... or a war breaks out in the middle east. ... or any of a gazillion other things that might happen to change the supply / demand dynamic. ... then no.

Also, the routine in quotation marks is your thing. There is nothing routine about a fire at an oil refinery. It's a shit show.

 

Rockets and feathers is a very real dynamic. ... But it more influences how quickly relative prices change. On the way down, you'd expect prices to come down more slowly than they had risen. But if absolutely nothing changes (which isn't reality) -- so supply and demand end up back to the exact levels they had been -- and oil refining capacity gets back to exactly where it had been, the price would almost certainly settle in right around where it had been. Rockets and feathers would make it so that it would take longer to get back there than it had taken for the price to rise.