Price of oil hits $100 per barrel

[Kylehnat]

From the link that Joey posted:

Q: How many (US) gallons of 87 octane gasoline can be made from one barrel of crude oil?

A: 19.5

Q: How much does the average gas station pay to buy a gallon of gasoline from an oil company?

A: Retailer (gas station) profit is about 1 to 5 cents a gallon. So they pay the posted price, less that and less taxes (federal, state, local).

Q: I did some simple calculations, and the numbers don't seem to make any sense. Let's assume that the price of crude oil is $37.00 per barrel. At 19.5 gallons of gasoline per barrel, this means that a gallon of gasoline in its crude oil form costs $1.90. Yet, when I pump it into my car, I'm currently paying $1.76 per gallon. This means that the gasoline is losing 14 cents per gallon in value when going from ground to gas pump. This must mean that everyone involved in transporting and refining the oil and gasoline must be marking down the final price of their finished product. Companies mark up, not down. Obviously, there is something wrong here somewhere.

A: The 42-gallon barrel of crude oil makes about 19½ gallons of gasoline, 9 gallons of fuel oil, 4 gallons of jet fuel, and 11 gallons of other products, including lubricants, kerosene, asphalt, and petrochemical feedstocks to make plastics. [See also this EIA page] That adds up to more than 42 gallons because of something called "refinery gain" - the processing and chemical changes decrease the density and hence increase the volume of the refined components. So, crudely (pun intended), a $37 barrel of crude represents about 88 cents a gallon to start with. That 88c represents the cost of production plus producer profit. Go up from there.

Numbers that I found some time ago had this for other increments of the cost per gallon:
refiner cost - 13c
marketing cost - 5c
transportation cost - 15c
retailer cost - 5c
refiner, marketer, transporter, retailer profit - 10c (total, not each)

Add that to 88c, add the average 43 cents tax, and -- rather remarkably - that adds up to $1.79, if I added correctly - just about what you are paying. All the numbers vary depending on a long list of things -- refiner costs go up when they have to make specialized local blends (one reason for CA and Chicago having higher prices), marketing costs are higher in competitive markets (i.e., big cities), transportation costs are higher in the boondocks, or generally in places distant from refineries, retailer costs depend on number of employees, whether or not it is a franchise (some rural stations that I know of here in Montana have to pay many thousands of dollars per year for the "right" to be branded Conoco, or whatever); and the total price also depends on differing state and local taxes. So these numbers would be ball-park, approximations.

Basically, gasoline is only a fraction of what is produced from a barrel of oil

 

[Keef]

From the link that Joey posted:


Basically, gasoline is only a fraction of what is produced from a barrel of oil

Your quote drives me insane. The questioner asked how many gallons of 87 octane gasoline can be made from 42 gallons of crude oil. The answer is not 19.5. The questioner didn't ask "How many gallons of everything can be made," he asked "How many gallons of gasoline can be made".

So basically we still have no idea how many gallons of gas can be made from 42 gallons of crude oil. Just seems to me like the person who typed all that could have saved a few button presses if the idiot answering the questions actually answered the question. Totally off topic, yes, but that's the only thing I soaked up from reading all of it.

I seriously doubt refineries go through a barrel of oil with a measuring cup and say "this much is gonna be jut fuel, and this much is gonna be Vaseline, and this much is...aww damn! I spilled some on the floor now I gotta start all over again!" I am seriously frustrated right now, and simply because that retard didn't answer the damn question.

 

[Philly]

I seriously doubt refineries go through a barrel of oil with a measuring cup and say "this much is gonna be jut fuel, and this much is gonna be Vaseline, and this much is...aww damn! I spilled some on the floor now I gotta start all over again!" I am seriously frustrated right now, and simply because that retard didn't answer the damn question.

My guess is that they pump in the crude, put it through the processes and whatever comes out is what comes out. Basically, every drop of crude contains the same amounts of everything (regional differences will probably throw that off a little).

So if you put in 42 gallons of crude, you will get 19.5 gallons of gasoline, because that is how much gasoline chemical is in the barrel of crude. You cannot make 42 gallons of gasoline from 42 gallons of crude.

 

[Kylehnat]

What is so hard to understand? From a barrel of oil, 19 gallons of gasoline can be made. That DOESN'T necessarily mean that those 19 gallons of gasoline came from 19 gallons of crude oil, though.

The bottom line is that you can't correlate the cost of gasoline to the cost of crude oil. Only refiners know the real answer to that.

 

[Keef]

My guess is that they pump in the crude, put it through the processes and whatever comes out is what comes out. Basically, every drop of crude contains the same amounts of everything (regional differences will probably throw that off a little).

So if you put in 42 gallons of crude, you will get 19.5 gallons of gasoline, because that is how much gasoline chemical is in the barrel of crude. You cannot make 42 gallons of gasoline from 42 gallons of crude.

What? Oil is oil. Gasoline is not oil. Gasoline has ethanol and methanol and hysterectomy and rohypnol and asparagus and frog legs in it and all that stuff. Oil doesn't just turn into gas. I bet you can make about 150 gallons of gas with 42 gallons of crude oil, at least.

 

[Kylehnat]

No you can't. Only a portion of the crude oil can be used to make gasoline. Crude oil is not one uniform substance--it is a number of different petrochemicals, many of which are too heavy or "dirty" to use in gasoline. These "heavies" end up in diesel, naphtha, fuel oil, and asphalt, to name a few. The light ends make gasoline, jet fuel, and lubricants.

Understand that oil companies take the path of least resistance, because it's the lowest capital and operating cost. The two major operations in the processing of crude oil are multi-tap distillation and catalytic cracking. The distillation is where you can separate the light ends from the heavies, and catalytic cracking is where you split the heavies into something lighter (but still too heavy to use in gasoline). Both of these operations are very cheap (relatively speaking). In short, refiners merely let the oil split the way it wants to. If an oil company really wanted to, they could get more than 19.5 gallons of gasoline from one barrel of oil by "forcing" the crude to split differently. However, the added costs of processing would make you cry every time you filled up your car.