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Gas prices might temporarily fall as there is a very brief over-supply. Then the exact opposite will happen, gasoline will become more expensive as the economie
by adventured 6y ago
Gas prices might temporarily fall as there is a very brief over-supply. Then the exact opposite will happen, gasoline will become more expensive as the economies of scale vanishes, refineries shut down permanently (never to be restarted, and no new refineries will be built), the market demand continues to dwindle, and on the cycle goes. Gasoline ends up as a largely niche fuel many decades out.
And that's before we get to the obviously anti-fossil fuel era we're entering, where they will increasingly hammer fuels like gasoline with taxes, driving the cost up around the globe. Even if somehow the market didn't drive the prices up from the economic efficiency change I described, the taxes will regardless and that's guaranteed to occur.
- maxerickson 6y agoGasoline is (something like) 20% of refinery outputs. I think a lot of that is coming out of upgraders, so there can be quite a decline in output before there's not enough gasoline refiners for there to be price competition. https://www.eia.gov/dnav/pet/pet_pnp_refp2_dc_nus_mbbl_m.htm https://www.eia.gov/dnav/pet/pet_pnp_refp2_dc_nus_mbbl_m.htm (the upgrading part matters because they can shift their production around a lot more than if they are just fractioning the crude)
- ogre_codes 6y agoAlso, the cost to extract oil is higher in some regions and production will drop off as prices drop. Canadian sands oil and shale oil both cost about $40/ barrel to extract so there isn't a ton of room for prices to go down from here before big chunks of supply vanish.