This is what a 42 US gallon of crude oil yields. https://www.quora.com/Approximately-how-many-gallons-of-gas-does-a-barrel-of-oil-produce
I bought a gallon (3.78 liter) of camper fuel (naptha) today, it sells for $20.00 per gallon.
My neighbour is painting his house , using a clear urethane on cedar. The product sells for $89.00 per four liter can.
A ”not quite one liter” 946 ml of Shell Rotella T 10w-30 at Peavy mart sells for $5.99.
It all adds up to buying crude at $42.00, refining it, and retailing the products. Oil companies rarely lose money.
When oil was $130 a barrel, a 4litre jug of synthetic 5/20 was $50 regular, $30 on sale at Canuckistani Tire. With oil at $50 a barrel, it’s still the same………..doesn’t add up
When oil was 147.00 a barrel gas was about 1,25 a liter,we are paying 1.16 a liter with oil at it’s current price. I wonder how much we will be gouged for when it returns to 100.00 a barrel, because eventually it will. How about 2.50 a liter. this country will not survive the stupidity much longer.
“Oil companies rarely lose money.” If they do for long, we call them “Former oil companies.”
PM Justun will probably raise taxes 10 percent on a liter,
Don’t youcha know?
Canada needs to pay for all those ‘Refugees.’
From the article: “Canada’s oil sands represent the third largest reserves in the world after Saudi Arabia and Venezuela, but its crude trades at a substantial discount to other North American grades due to its low quality and limited pipeline access to market.”
Build the pipelines already.
Serious oil people in Canada have been saying for 20 years that there had to be a export capability at tide water. The political system is so weak in Canada that this has not happened and the country has started to pay the price. Big oil has walked away from Canada. The talking heads are creating all sorts of reasons why, mostly economic. IMHO the real truth is that capital goes to where the safest and best return can be realized. That is not Canada.
The sad fact that Canada’s national security and economic viability is threatened by this situation. I see no foreseeable change.
With Canada’s ‘Obamacare’ to pay for …
Ever increasing numbers of refugees
Paying for bilingual services
Paying for the metric duplication of measure
Paying for the insane multicultural policies
Paying .. wait. no … ENRICHING the global-warming-scam people by subsidizing windmills and solar panels that will disappear shortly after the subsidies stop. AND WE WON’T EVER GET THAT MONEY BACK.
Paying the super high cost of a bloated government bureaucracy at all levels.
Paying the huge pensions of government, teachers (aka – socialization programmers of the young and stupid) and crown Corp workers … those brain-dead twits who sold their souls for a government pension.
Paying the high cost of public sector unions … they work for the people, not a horrid private sector employer! So why a union?
Paying for the increasing numbers of tranny conversions … perhaps a program to remove life-limiting tattoos and piercings.
Then there is paying for Just in’s travel and escapades to who knows where to do who knows what.
Just a few reasons there isn’t enough money to do the right things. The left soaks it up like a sponge.
Trudeau times are hard times in Alberta.
Anybody remember the old man? Bongo is just completing the job.
“When oil was $130 a barrel, a 4litre jug of synthetic 5/20 was $50 regular, $30 on sale at Canuckistani Tire. With oil at $50 a barrel, it’s still the same………..doesn’t add up”
There is a threshold for the cost of producing a litre of gas that companies can’t drop below (because why produce something you can’t make a profit from?). Whether a barrel of oil is worth US$100 or $50, there are largely fixed expenses – the actual cost of refining and shipping the product – that won’t drop (just because a barrel is only half the cost it used to be, the refining infrastructure isn’t suddenly half as costly to operate and the workers don’t suddenly agree to work for half the pay).
Add to that Federal and provincial taxes for this, that and who-knows-what and, at a certain point, it probably almost stops being worthwhile (i.e. profitable) for a company to even produce gas.
I would put Kathleen Wynne and her mountain of debt up against the recycled Jerry Brownout and his state’s debt. Both represent the consequences and legacy of a brain-dead electorate.
“Canuckistani Tire” i’m assuming that name is a joke?
Heh, what JJM is trying to say is that even if the refiners got the crude for nothing, the end product price would remain the same.
Economics for dummies, because nobody else would believe it.
I thought that most commenters on this site had a decent grasp of economics. Judging by the comments above I may have to rethink that.
The price of raw crude has very little impact on many of the products derived from it. Just as the price of corn is a very small part of the cost of putting a box of corn flakes in a consumers hands. The margins in food and petroleum supply chain segments are tiny – often less than 3% sometimes less than 1% The profits are usually pretty stable but nowhere near the potentials of software et al new service sectors.
Just as the price of corn is a very small part of the cost of putting a box of corn flakes in a consumers hands.
Heh, because of the high cost of inefficiencies. Everybody and their dog gets a piece. If farmers operated in that fashion, food would be 10 times the cost.
Nothing inefficienct about it. If someone could do it for less they would.
Farmers are by and large selling a commoditized product. Even then margins are usually pretty decent. Much better than at the wholesale level.
I find it odd that on a conservative blog a successful private Canadian company like Cabadian Tire would be denigrated.
If you don’t like their merchandise – don’t shop. I doubt many of your tax dollars are being funneled to CT by politicians.
Nothing inefficienct about it. If someone could do it for less they would.
Regulatory capture prevents that. Competition costs too much to start up. It’s the mandated inefficiencies the oil companies are quite happy with. Prevents competition.
Other areas are the same, even back in the 80’s, 10% the cost of drilling a hole in the ground for oil was taken up by environmental regulations. Add in all the safety nonsense and the rest…
Fortunately for those who eat, farmers don’t do that. Although red rachael is doing her best to change that with her safety rules.
“Although red rachael is doing her best to change that with her safety rules.”
Last fall when I was combining with my brother he had on a safety vest. It worked – I didn’t run him over.
I agree with Gord.tulk
Everything he said here.
Get a sense of humour!
FFS
Get a sense of humour! We denigrate the stupid lefties for their dire seriousness, don’t emulate them.
How about this? Camexican Tire!
Have a beer, chill out, long weekend. If not, well IDC.
Re: Crude oil has very little impact on the finished product.
True–however a quart of refined non synthetic oil (10w-30) is at least 85% refined crude. Even synthetic oil requires crude. The cheaper the crude, the more money they make on lube products..
Keeping in mind of course that in Europe and other parts of the world, recycled oil makes up for 50% of new lube oil products sold.
I saw Castrol GTX 10w-30 (non synthetic) today at Home Hardware selling for $8.74 a liter. (plus tax.) Air compressor oil (mineral SAE 30) is at $18.00 a liter.
I guess I didn’t recognize canuckistani as humour – other didn’t as well. Silly me
Again the petroleum cost is a small part of the overall cost of the finished good. Synthetic takes a significant amount of chemistry. And The supply chain From well head to the shelf is enormously complex. No one is getting gouged
In the early 70’s a bushel of wheat and a barrel of oil were about the same price, under $4.
Today a bushel of wheat is little changed, whereas a barrel of oil is close to $50. I guess all that ‘complexity’ costs money.
And I guess we know who’s efficient and who isn’t…cattle are the same story.
Exactly! The farmer gets about 4 to 6 cents for the wheat that goes into a loaf of bread. If I remember correctly a bushel of wheat will make about 45 to 60 loaves of bread, depending on the quality of the bread, say, white gumbo as compared to a good 100% whole grain.
Father in law just sold his hard red spring for 9$
Oil sells for less than 45 thus the price difference isn’t much different.
However it is irrelevant. Wheat yields have more than doubled and input costs have actually gone – especially labor.
Oil is a finite resource that is highly inelastic. A dozen years ago it was about $10 bucks. Five years ago it was above 100.
The two products are completely disconnected.
This ‘woe the fate of the farmer’ is rubbish that no self respecting conservative would engage in.
Father in law just sold his hard red spring for 9$
Oil sells for less than 45 thus the price difference isn’t much different.
However it is irrelevant. Wheat yields have more than doubled and input costs have actually gone – especially labor.
Oil is a finite resource that is highly inelastic. A dozen years ago it was about $10 bucks. Five years ago it was above 100.
The two products are completely disconnected.
This ‘woe the fate of the farmer’ is rubbish that no self respecting conservative would engage in.
Father in law just sold his hard red spring for 9$
Maybe in Canadian pesos. The going price is less than $5 US Oil sells for less than 45 thus the price difference isn’t much different.
LOL, quite a bit more difference than when both wheat and oil were nearly the same price at less than $4…
I see a lot of excuses why farmers are more efficient than the oil business… 🙂
You seem to fail to understand that there is no correlation between oil and grain prices. Oil has gotten much harder to extract since 1970 and grain yields have increased more than double with input costs declining.
This your comparison is gibberish/pointless.
Both the oil and Ag biz are highly efficient and use technology to its fullest. And the margins they earn and the patterns of those margins properly reflect the nature of the risk in both.
Oil has gotten much harder to extract since 1970…
So, has refining gotten much harder as well? That’s where you said most of the costs come from…kinda changing your tune.
Stop switching the topic. You were referring to the price of crude. And it has gotten much harder to extract since the seventies. And the only thing saving us is the huge advancements in tech – deep water drilling, 3D seismic, big data, horizontal drilling and on and on
As for the finished products – they too wren vastly more complex and sophisticated than the single grades and multi viscosity oils of almost fifty years ago. A 1970 dollar is worth 6.40 today. I don’t know what a quart of oil was in 1970 but I’m pretty sure is was more than a buck. And you can get very good oil today for 4$ so adjusted for inflation motor oil is far cheaper (and vastly better) than it was fifty years ago.
We’re comparing efficiency…to be on a par with farmers, oil companies should be able to refine twice as much for the same price as 1970.
Farmers produce twice as much for the same price, actually much less since a dollar is worth much less than 1970.
Ever heard of plant breeding? Wheat cultivars are vastly better than fifty years ago. Minimum tillage was unheard of. Combines had only 12 foot headers. Etc. Glyphosate hadn’t been invented.
Of course wheat production per dollar is much better than oil refining.
Heh, presumably the oil companies have also had the advantages of technical advances…
Farmers have obviously made more efficient use of technical advances, doubling yields, selling for less than a fifth the price in 1970 in inflation adjusted dollars.
No oil company could ever hope to match that efficiency. Mainly because they don’t have to…ever wonder why every oil company retails fuel for exactly the same price?
This is what a 42 US gallon of crude oil yields.
https://www.quora.com/Approximately-how-many-gallons-of-gas-does-a-barrel-of-oil-produce
I bought a gallon (3.78 liter) of camper fuel (naptha) today, it sells for $20.00 per gallon.
My neighbour is painting his house , using a clear urethane on cedar. The product sells for $89.00 per four liter can.
A ”not quite one liter” 946 ml of Shell Rotella T 10w-30 at Peavy mart sells for $5.99.
It all adds up to buying crude at $42.00, refining it, and retailing the products. Oil companies rarely lose money.
When oil was $130 a barrel, a 4litre jug of synthetic 5/20 was $50 regular, $30 on sale at Canuckistani Tire. With oil at $50 a barrel, it’s still the same………..doesn’t add up
When oil was 147.00 a barrel gas was about 1,25 a liter,we are paying 1.16 a liter with oil at it’s current price. I wonder how much we will be gouged for when it returns to 100.00 a barrel, because eventually it will. How about 2.50 a liter. this country will not survive the stupidity much longer.
“Oil companies rarely lose money.” If they do for long, we call them “Former oil companies.”
Interesting article to accompany the graph. Canada is not in good “oil” shape.
http://graphics.wsj.com/oil-barrel-breakdown/
PM Justun will probably raise taxes 10 percent on a liter,
Don’t youcha know?
Canada needs to pay for all those ‘Refugees.’
From the article: “Canada’s oil sands represent the third largest reserves in the world after Saudi Arabia and Venezuela, but its crude trades at a substantial discount to other North American grades due to its low quality and limited pipeline access to market.”
Build the pipelines already.
Serious oil people in Canada have been saying for 20 years that there had to be a export capability at tide water. The political system is so weak in Canada that this has not happened and the country has started to pay the price. Big oil has walked away from Canada. The talking heads are creating all sorts of reasons why, mostly economic. IMHO the real truth is that capital goes to where the safest and best return can be realized. That is not Canada.
The sad fact that Canada’s national security and economic viability is threatened by this situation. I see no foreseeable change.
With Canada’s ‘Obamacare’ to pay for …
Ever increasing numbers of refugees
Paying for bilingual services
Paying for the metric duplication of measure
Paying for the insane multicultural policies
Paying .. wait. no … ENRICHING the global-warming-scam people by subsidizing windmills and solar panels that will disappear shortly after the subsidies stop. AND WE WON’T EVER GET THAT MONEY BACK.
Paying the super high cost of a bloated government bureaucracy at all levels.
Paying the huge pensions of government, teachers (aka – socialization programmers of the young and stupid) and crown Corp workers … those brain-dead twits who sold their souls for a government pension.
Paying the high cost of public sector unions … they work for the people, not a horrid private sector employer! So why a union?
Paying for the increasing numbers of tranny conversions … perhaps a program to remove life-limiting tattoos and piercings.
Then there is paying for Just in’s travel and escapades to who knows where to do who knows what.
Just a few reasons there isn’t enough money to do the right things. The left soaks it up like a sponge.
Hey ! Look at the bright side ! At least you don’t have a $ 279 Billion State pension liability … like the State of CA … http://www.breitbart.com/california/2017/05/15/gov-brown-california-pension-liability-skyrockets-by-22/ … more than half of which is unfunded. Jerry says the State is financially healthy … because he just eliminates all the negative categories from the budget … problem solved !
Trudeau times are hard times in Alberta.
Anybody remember the old man? Bongo is just completing the job.
“When oil was $130 a barrel, a 4litre jug of synthetic 5/20 was $50 regular, $30 on sale at Canuckistani Tire. With oil at $50 a barrel, it’s still the same………..doesn’t add up”
There is a threshold for the cost of producing a litre of gas that companies can’t drop below (because why produce something you can’t make a profit from?). Whether a barrel of oil is worth US$100 or $50, there are largely fixed expenses – the actual cost of refining and shipping the product – that won’t drop (just because a barrel is only half the cost it used to be, the refining infrastructure isn’t suddenly half as costly to operate and the workers don’t suddenly agree to work for half the pay).
Add to that Federal and provincial taxes for this, that and who-knows-what and, at a certain point, it probably almost stops being worthwhile (i.e. profitable) for a company to even produce gas.
I would put Kathleen Wynne and her mountain of debt up against the recycled Jerry Brownout and his state’s debt. Both represent the consequences and legacy of a brain-dead electorate.
“Canuckistani Tire” i’m assuming that name is a joke?
Heh, what JJM is trying to say is that even if the refiners got the crude for nothing, the end product price would remain the same.
Economics for dummies, because nobody else would believe it.
I thought that most commenters on this site had a decent grasp of economics. Judging by the comments above I may have to rethink that.
The price of raw crude has very little impact on many of the products derived from it. Just as the price of corn is a very small part of the cost of putting a box of corn flakes in a consumers hands. The margins in food and petroleum supply chain segments are tiny – often less than 3% sometimes less than 1% The profits are usually pretty stable but nowhere near the potentials of software et al new service sectors.
Just as the price of corn is a very small part of the cost of putting a box of corn flakes in a consumers hands.
Heh, because of the high cost of inefficiencies. Everybody and their dog gets a piece. If farmers operated in that fashion, food would be 10 times the cost.
Nothing inefficienct about it. If someone could do it for less they would.
Farmers are by and large selling a commoditized product. Even then margins are usually pretty decent. Much better than at the wholesale level.
I find it odd that on a conservative blog a successful private Canadian company like Cabadian Tire would be denigrated.
If you don’t like their merchandise – don’t shop. I doubt many of your tax dollars are being funneled to CT by politicians.
Nothing inefficienct about it. If someone could do it for less they would.
Regulatory capture prevents that. Competition costs too much to start up. It’s the mandated inefficiencies the oil companies are quite happy with. Prevents competition.
Other areas are the same, even back in the 80’s, 10% the cost of drilling a hole in the ground for oil was taken up by environmental regulations. Add in all the safety nonsense and the rest…
Fortunately for those who eat, farmers don’t do that. Although red rachael is doing her best to change that with her safety rules.
“Although red rachael is doing her best to change that with her safety rules.”
Last fall when I was combining with my brother he had on a safety vest. It worked – I didn’t run him over.
I agree with Gord.tulk
Everything he said here.
Get a sense of humour!
FFS
Get a sense of humour! We denigrate the stupid lefties for their dire seriousness, don’t emulate them.
How about this? Camexican Tire!
Have a beer, chill out, long weekend. If not, well IDC.
Re: Crude oil has very little impact on the finished product.
True–however a quart of refined non synthetic oil (10w-30) is at least 85% refined crude. Even synthetic oil requires crude. The cheaper the crude, the more money they make on lube products..
Keeping in mind of course that in Europe and other parts of the world, recycled oil makes up for 50% of new lube oil products sold.
I saw Castrol GTX 10w-30 (non synthetic) today at Home Hardware selling for $8.74 a liter. (plus tax.) Air compressor oil (mineral SAE 30) is at $18.00 a liter.
I guess I didn’t recognize canuckistani as humour – other didn’t as well. Silly me
Again the petroleum cost is a small part of the overall cost of the finished good. Synthetic takes a significant amount of chemistry. And The supply chain From well head to the shelf is enormously complex. No one is getting gouged
In the early 70’s a bushel of wheat and a barrel of oil were about the same price, under $4.
Today a bushel of wheat is little changed, whereas a barrel of oil is close to $50. I guess all that ‘complexity’ costs money.
And I guess we know who’s efficient and who isn’t…cattle are the same story.
Exactly! The farmer gets about 4 to 6 cents for the wheat that goes into a loaf of bread. If I remember correctly a bushel of wheat will make about 45 to 60 loaves of bread, depending on the quality of the bread, say, white gumbo as compared to a good 100% whole grain.
Father in law just sold his hard red spring for 9$
Oil sells for less than 45 thus the price difference isn’t much different.
However it is irrelevant. Wheat yields have more than doubled and input costs have actually gone – especially labor.
Oil is a finite resource that is highly inelastic. A dozen years ago it was about $10 bucks. Five years ago it was above 100.
The two products are completely disconnected.
This ‘woe the fate of the farmer’ is rubbish that no self respecting conservative would engage in.
Father in law just sold his hard red spring for 9$
Oil sells for less than 45 thus the price difference isn’t much different.
However it is irrelevant. Wheat yields have more than doubled and input costs have actually gone – especially labor.
Oil is a finite resource that is highly inelastic. A dozen years ago it was about $10 bucks. Five years ago it was above 100.
The two products are completely disconnected.
This ‘woe the fate of the farmer’ is rubbish that no self respecting conservative would engage in.
Father in law just sold his hard red spring for 9$
Maybe in Canadian pesos. The going price is less than $5 US
Oil sells for less than 45 thus the price difference isn’t much different.
LOL, quite a bit more difference than when both wheat and oil were nearly the same price at less than $4…
I see a lot of excuses why farmers are more efficient than the oil business… 🙂
You seem to fail to understand that there is no correlation between oil and grain prices. Oil has gotten much harder to extract since 1970 and grain yields have increased more than double with input costs declining.
This your comparison is gibberish/pointless.
Both the oil and Ag biz are highly efficient and use technology to its fullest. And the margins they earn and the patterns of those margins properly reflect the nature of the risk in both.
Oil has gotten much harder to extract since 1970…
So, has refining gotten much harder as well? That’s where you said most of the costs come from…kinda changing your tune.
Stop switching the topic. You were referring to the price of crude. And it has gotten much harder to extract since the seventies. And the only thing saving us is the huge advancements in tech – deep water drilling, 3D seismic, big data, horizontal drilling and on and on
As for the finished products – they too wren vastly more complex and sophisticated than the single grades and multi viscosity oils of almost fifty years ago. A 1970 dollar is worth 6.40 today. I don’t know what a quart of oil was in 1970 but I’m pretty sure is was more than a buck. And you can get very good oil today for 4$ so adjusted for inflation motor oil is far cheaper (and vastly better) than it was fifty years ago.
We’re comparing efficiency…to be on a par with farmers, oil companies should be able to refine twice as much for the same price as 1970.
Farmers produce twice as much for the same price, actually much less since a dollar is worth much less than 1970.
Ever heard of plant breeding? Wheat cultivars are vastly better than fifty years ago. Minimum tillage was unheard of. Combines had only 12 foot headers. Etc. Glyphosate hadn’t been invented.
Of course wheat production per dollar is much better than oil refining.
Heh, presumably the oil companies have also had the advantages of technical advances…
Farmers have obviously made more efficient use of technical advances, doubling yields, selling for less than a fifth the price in 1970 in inflation adjusted dollars.
No oil company could ever hope to match that efficiency. Mainly because they don’t have to…ever wonder why every oil company retails fuel for exactly the same price?