We are in an interesting place right now. Borderline overproduction, and undercapacity to consume. You would expect the price of a barrel of crude to go down with the oversupply, and the price of refined oil to rise, generating enormous profits for refiners. This in turn would cause refiners to invest more capital in upgrading capacity. But what is happening is that the speculation on the barrel, has caused a pinch, and actually lowered the available capital.
Think of retailers like Walmart, etc sucking up extra transportation costs, until they get to the point that they eventually have to raise prices. This is what may happen for gasoline. We may have a super-spike, not on the cost of crude, but the cost of refined products.
Agree, or disagree?
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