why is motor oil so expensive altho brent is $50

[BrocLuno]

Well head production costs are fixed between $30~$75 barrel. Almost all the crude used in the USA is from long term contracts or owned wells. These have little to do with the price on the spot market ...

Chevron Richmond (Ca) is not getting anything from the Brent fields. Long term contracts for a specific supply chain so that refiners know exactly what's coming down the pipeline and how to handle it means quality product.

Spot market oil is for other purposes like bulk fuel oil production and the like. Motor oil is a highly refined product needing specific base stocks. And that is not even factoring in GTL and the like ...

 

[Y_K]

Yup, we don't care about Brent. And there is even no such thing as a spot price really..

 

[gfh77665]

Back when the 3000 mile advice was in force 25+ years ago, oil was not as good. The advanced chemistry of today's oils have totally rendered the 3000 mile interval a MYTH. Oils last roughly twice as long. You get so much more for the dollar, now. Oil is cheap! Enjoy!

 

[JHerriot]

Originally Posted By: HerrStig
Originally Posted By: JHZR2
Originally Posted By: HerrStig

Motor oil is cheap in the US, even if you don't buy it on sale.

See what it costs in Europe, or down under, and you'll be stunned. Even our Canadian neighbors are paying much more than we are for motor oil.
This^. The US is a capitalist system, you can charge what the market will bear. If you charge too much, you don't sell much product and you learn a lesson. If your economics "perfessor" was a communist maybe you think differently. When industry is state run and bureaucrats set prices see what you get. It won't be inexpensive motor oil, now will it?


So you're implying that the state sets the pricing of lube oils in these other places?
-Insert HerrStig Archie Bunker rant here-

I can confirm that the evil, out to get our oil and take away our freedom Communist/Socialist/Boogeyman government of Canada does not in fact set prices for oil, and that in fact Canada is not a statist totalitarian [censored] and that we don't wait in line for bread or wait up late at night with glass bottles of maple syrup kept ready in defence of our windshield wipers. Ditto for most of Europe and Australia and dozens of other countries where people are also free within mixed-market economies like ours. We have different market conditions and retailers that charge us more because they can. This is also a planet of 7+ Billion people who all want the extraordinarily privileged lifestyle you and I currently enjoy. You should be over the moon at the incredible variety of compressed by rock lifeform oils available to you.

 

[Shannow]

Did the price of a plastic wheelbarrow at Walmart follow the crude prices down ?

why not ?

 

[Ducked]

Originally Posted By: Astro14
If your economics "perfessor" was a communist maybe you think differently. When industry is state run and bureaucrats set prices see what you get. It won't be inexpensive motor oil, now will it?


Depends. That was the situation in Egypt when I was there. Dunno what motor oil cost but petrol was almost free.

UPI archive, reporting on the USSR has, for Sept. 14, 1981 "Gasoline, last raised in 1978 to $1.06 a gallon, doubled to $2.12." $1.06 a gallon is pretty similar to what Americans were paying in 1978, and of course a lot less than what we were paying in the UK.

For our sins we got Margaret Thatcher the year after, who wasn't noticeably a communist, but I don't remember petrol prices plummeting.

 

[DeepFriar]

We've touched on this area in the past. There is a reason oil companies spend untold BILLIONS on advertising/promotion. They don't want to compete on "exact" components so they can change their formulas at will within the confines of certain specs. You can't test it to the degree of knowing what those components are. And, as we know, they do indeed change those components and formulae all the time. To the extent they can, they certainly don't want to compete on price except to try to justify their price point with even more advertising/promotion. They do a great marketing job in this space and must deliver a mighty margin. We buy a product that we know changes, that we can't define at any given time, pay a pretty penny for it and argue religiously about why one is better than another. Many BITOGers in one place sounds like the barking of Pavlov's dogs.

 

[alarmguy]

Originally Posted By: jstert
why other than to maximize profits? over the past few years gas prices at the pump have decreased, so why dont we commonly see regular motor oil under $2 and synthetic under $5 as it was several years ago? same with ongoing airline fuel surcharges? sorry if im asking a dumb or often-answered question...


Oil is cheap, (not trying to be a smart a**) its easy to find oil around $2.25 a quart and synthetic for $3.25 a quart in discount stores. (walmart) Sams club .. etc.
Just bought 2 cases of 5w30 at sams club @ 1.90 a quart in quart containers.

However, people like to feel good about what they buy so they spend more on oil from companies that spend a lot of money on marketing to make you feel that their oil is better when in reality chances are with care the engine will out live the rest of the car if taken care of using any oil recommended by the manufacturer..

Dont buy "all the money spent on research and development" most adpacks in oil is made by a handful of companies like a commodity. Its all just marketing and no one every produces tests proving their lets say SN oil is superior to another company's SN oil, etc, etc, etc,

Same reason people spend $650 on an Iphone that cost about the same to make (within reason) as a Alcatrel Idol 3 for $99.00 and its a dead heat as far as sound quality. Yes, Iphone better camera.
Just giving examples... for some dumb reason )

Its a personal feel good thing and nothing more unless proven.

 

[Ether]

As someone previously mentioned,oil is relatively cheap in the US compared to Europe.Mobil 1 5w30 is roughly $25 for 5 quarts in the US,in the UK our best price at the moment is £45/$56 for 5 quarts.Same with ATF,Antifreeze,Grease,you name it.

 

[Quattro Pete]

Originally Posted By: Ether
in the UK our best price at the moment is £45/$56 for 5 quarts.Same with ATF,Antifreeze,Grease,you name it.

Right, but how much of it is taxes?