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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?


To: Elroy Jetson who wrote (42035)9/21/2005 9:48:09 PM
From: CalculatedRisk  Read Replies (1) | Respond to of 110194
 
I agree with Timba. If all refineries could handle all grades at the same price, sweet/light would just drop to the price of the heavier / sour grades. Oil prices would not "collapse".

Since BK (Before Katrina) refined product prices tracked crude oil prices, refineries were not a bottleneck and did not contribute to the higher prices.

It is true that the spread between grades increased, but that is a different discussion.