reeeoga said:
WillCAD
11 refineries shut down from 2 days before Katrina to several weeks after Rita. 4 of those are still at reduced (below 70%). one is below 50%. The reports are available, they are just buried in the back of newpapers. The refineries south of New Orleans will not be up to capacity for several more months to a year. The road and pipeline systems are heavily damaged.
When the market demand stays the same, and the supply (for a short period of time) is reduced by 30% the cost of that item will go up.
That happened 6 months ago, and prices went up then.
In the 6 mons since, according to what you just wrote, 7 out of those 11 have returned to full capacity, while 4 are operating at reduced capacity. So the price shoiuld have spiked right after the hurricanes, while 11 refineries were out of action, and gradually gone down since, as the refineries came back on line, one at a time.
None of what you described happened in the months of March or April 2006. So again, what market conditions in the month of April caused the price at the pump to spike by 20% in one months time? What refineries shut down in April? What new market suddenly opened up in April?
I still haven't seen any evidence of any true market condition that would account for so sharp a price increase in so short a period of time. And if the price spiked without any market conditions driving it, well, I guess that sort of loosely fits the definition of gouging, doesn't it?
And I am not a conspiracy theorist who thinks that all of the big oil companies are in collusion to fix the price. But if one company raises or lowers the price at the pump, the others tend to follow along on their own so that A) They won't miss the higher profits when the price goes up, and B) They won't lose customers when the price goes down.