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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (169799)	12/8/2008 2:24:29 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Believe me. If the percentage of diesel cars in use in the U.S. rose significantly, the price of diesel fuel would become an ultra-premium product. With virtually no diesel use in autos in America, the world wholesale price of diesel already sells at a premium to gasoline with much of the diesel refined in the U.S. being exported. Gasoline already sells at a discount to diesel, yet surplus gasoline fraction from around the world is shipped to the U.S. for sale. Now imagine we shift a goodly portion of that gasoline demand in the U.S. to diesel. As the price of gasoline plunges and the price of diesel skyrockets, U.S. refineries will be rebuilt to maximize distillates - but this will moderate the huge price difference only to a degree. The price of jet fuel and heating oil will also soar along with trucking costs. And still there will be a growing glut of gasoline perhaps now selling for little more than taxes say $0.82 a gallon compared with $4.65 per gallon for diesel. Some would begin to study the economics of completely breaking down the surplus aromatic fraction, normally reformed into gasoline, and synthesizing it into diesel and natural gas to meet the demand created by the diesel mania. The U.S. is out of sync in using gasoline rather than diesel for passenger cars fro economic reasons. It balances the product mix created from crude oil. .