The Latest On Oil

Anyone notice that gasoline prices are rising again? Or how about the fact they are rising at a time when the don't normally rise? Here's why:

The final factor that may contribute to a larger than anticipated draw is the one that analysts have factored in: Refineries will be coming out of turnarounds. However, utilization rates have been lower than expected, primarily due to low margins. As I have mentioned before, if margins are poor, you aren’t exactly scrambling to process as many barrels as you can. So the utilization patterns of the past couple of years may not be a good guide for this year’s utilization pattern. Utilization should come up, which would lead to downward pressure on inventories, but it's not a sure thing.

Allow me to translate. When oil input prices are through the roof and speculative, oil companies lose money processing their cheap oil inventories into gasoline. So what do you do to keep Congress off your back for gouging consumers with immediate price hikes on their cheap oil inventories? Slow down the refineries to increase prices at the pump. If input oil prices then decline, then their profits can go through the roof (again). If oil prices don't come down, then they can make up the losses by getting more money at the pump due to slower gasoline production. Heads they win, tails they win! Either way, the consumer is screwed.