There is likely to be no strike since the United Steelworkers are voting on accepting the contract offered now. Most of the Steelworkers I know are going to vote to accept the contract. Of course, until the vote is in anything is possible.

The reason crude oil is down and gas prices are up is not that cut and dired. The price of WTI is down becuase there is an over supply of it. The cost of imported oil is up because there is not enough of it.

So... How does this work? WTI is the best oil to refine in the US. It has also been the most costly for as long as I can remember and that goes back about 40 years. In order to make more profit on each bbl of oil refineries have reconfigured to process the preveiously cheaper offshore oil which is usually about $10 to $15 a bbl below WTI.

So what we have now is not a shortage of crude but a shortage of refineries that can process WTI. Therefore, WTI stacks up in inventory whild refiners scramble to find the type of oil the industry spent billions of dollars to gear up to refine.

How did we get into this mess? I blame the free market. Every refinery manager I know that tried to point out this was coming was either fired or just shunted aside. You can shout the truth from the rooftops, but if there is a few billion quick dollars to be made from doing the same thing everyone else is doing it is not long before that is what you are doing.

The companies that can still process WTI see no reason to cut their prices just because they are currently getting WTI cheap. One refiner was once getting a 'spread' of $18 for every bbls of oil refined and they did not cut their prices just because they could. They are now getting killed on the high price of imported oil, but then so is everyone else.

In essence the high cost of WTI drove refiners out ot the WTI refining business. OPEC has caught on that most of the US refineries must have their oil and have priced it to reflect that fact.

Once a refinery is configured to process a grade of crude it can cost hundreds millions of dollars to switch to another grade.

Also, refinery turnarounds are rather common and they are allowed to work with each other to make sure they are not off all at once. This has nothing to do with keeping the cilivian supply of fuel at acceptable levels; it is so the military will not be caught short in a crisis.

Pooka