Wednesday, March 19, 2008


I was just reading on CNN about the price spike in gasoline. Having worked in the energy sector for a few years, I have learned a few things about how the energy system works (oil in this case). The refiners are complaining that profits per barrel are so low now ($6, down from $38 last year) that it's just not profitable to make gasoline. Now this is the part the gets me, think of it like this, if McDonald's had their own farms for beef, and the price of beef skyrocketed, their farms would sell their beef at market prices to their own processing facility, and then having McDonald's bitch about how the margin is so low on their hamburgers that its just not worth making them anymore, all the while, pocketing record profits from their farming division. It makes me twitch.

No comments: