Fred - I haven't heard that before. Do you have a reference to a bbl of oil producing 10 gallons of diesel and 20 of gasoline?
What I've heard makes sense:
1) Supply/demand. The majority of drivers in the world use diesel fuel in their vehicles. Trains and large trucks use massive amounts of diesel.
2) Since 2006, the US gov't has required refiners to make ultra-low sulfur diesel, which makes it more expensive than gasoline to refine.
3) Refineries are operating at max. capacity.
Just wondering, though, are we starting to see the signs of an oil correction?
Not to say that diesel will be less than gasoline, but crude has dropped almost $30 a bbl in a couple of weeks. As we pass through hurricane season here, and as it becomes less likely the US experiences a catastrophic storm or 2, I'm speculating that oil will continue down to around $80/bbl. Just a speculation, though. Oil rose too much too quickly. Airstrikes on Iran - or even strong threats - will negate any correction as Iran can shut down the strait of Hormuz pretty easily and significantly disrupt the delivery of about 40% of the world oil supply.
But Israel and the US seem to be bowing to pressure to back off, which will be good for temporary gas prices but probably bad in the long term once Iran has The Bomb.
I'm off to Summerfest. Catch ya later!
Scott