Originally Posted by Pete7
I do wonder if demand and therefore higher prices has risen that much over say the last year to justify the higher cost we are seeing now. The alternative is that production has decreased or someone is stock piling fuel, the oil companies perhaps.
You seem to be in denial. It is a simple fact that demand has been increasing at a frightening rate for some years now. China and India are the main culprits, but they are simply catching up with our excessive use of energy. In Europe and USA there have been NO new refineries built for over 10 years. So not only is there a lack of crude oil capacity, but there is also a lack of refining capacity too.
Even when crude was at 40$ a barrel and pertol at 70p or so a litre, the oil market was quite finely balanced. If you throw in the huge increases in demand from the East you can quickly see why prices are where they are.
And even if you do double or triple the price, where is the extra oil going to come from? Only now are new refineries being built in the East, and new exploration is only just beginning to return promise. But ever increasing demand will quickly eat up any extra supply.
As an example, some of the Arab states used to export gasoline. But their economies are booming too, and they sell it at something like 20p a litre, so now they no longer have any excess to export.
There is no reason why oil will not go to $200/bbl and petrol to £2/litre, perhaps even this year.
Traders will only store gasoline (or crude, or diesel, etc) if forward prices are above current ones (contango). Thus, they can lock in a profit. But global tank storage capacity is not so high, and storage costs are high.
Sorry, but the cold truth of it is, that the demand far exceeds a dwindling supply.
The only hope for boats is that it looks like diesel will become the most sought after product, as it is the most versatile - cars, generators, power stations, heating oil, and a base for kerosene. So gasoline may get some respite.
One interesting development, in France at least is E85. It is being sold for 80c/litre, instead of 1.40 for petrol. There are many people using 50% E85 and 50% petrol in their cars with no modifications, absolutely fine. Why not boats?