Re: oil refining conspiracy?

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Shell actually refused to sell a refinery that they wanted to shut
down.  Of course they like tight capacity, but Daniel's point was that
the linkage to petroleum prices is weak.  He is probably correct,
although a refinery shortage could give heart to some speculators who
follow the greater fool theory.


On Tue, Aug 09, 2005 at 06:10:15PM -0400, Doug Henwood wrote:
> Michael Perelman wrote:
>
> >You are correct, but in Kaliforneeya refinery capacity is short & the
> >out of state delivery channels relatively narrow.  Spiking gasoline
> >prices here would have more shock value than crude oil.  Only our
> >culture and politics are crude.  Our petroleum is refined.
>
> Michael, your style has gotten so whimsical!
>
> Refiners love to keep capacity tight - refineries are expensive, and
> one goes down, retail prices spike. The oil historian/political
> scientist Greg Nowell has written on this somewhere.
>
> Doug

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu