Kenneth.Meltsner at ca.com
Thu Jan 15 08:15:11 PST 2004
Even though it's cold, motor gasoline shouldn't go up that much during
the winter -- to some extent, gasoline is a by-product of heating fuel
production* and as heating fuel demand increases, gasoline production
increases as well.
It's pretty complicated, of course, since refineries can tune output
depending on expected demand for the various fractions. The tricky bit
is that you're not trying to optimize the amount produced for each
product, but the (volume * price) for each product, and price is going
to depend on the volume and external factors.
* In the '80s, China dumped lots of cheap gasoline in West Coast
markets because they needed so much heating oil that they couldn't use
all of the gasoline that was produced as a by-product.
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