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  #1  
Old 03-12-2008, 08:06 PM
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Diesel Demand Remains Strong

Diesel Demand Remains Strong

Some Refiners See
Further Opportunity
Despite Price Rise

By ANA CAMPOY
March 12, 2008; Page A4


Oil and gasoline prices are again at new highs. But many in the U.S. refining industry are focusing on prices for another key liquid: diesel.
Crude oil continues to set records, reaching $108.75 in New York futures markets yesterday and pulling up the price of refined products to their own historic highs. Gasoline rose to an average of $3.225 for a regular gallon as of Monday, a record price, according to the Department of Energy.


Associated Press The weaker dollar has pushed the price of light, sweet crude higher. The Paris-based International Energy Agency said in its monthly report that "only a protracted and severe global recession would justify a sustained dip in oil prices" to less than $60 a barrel.
Diesel has followed the petroleum surge, ending yesterday at $3.82 a gallon, based on government data. Much as gasoline has pressured consumers, diesel is pressuring businesses that depend on the fuel.


But some in the refining industry see an opportunity. Their bet: Diesel is poised to take off. While skyrocketing prices have weakened demand for gasoline in recent months, global diesel demand has been growing.


Some analysts expect continued strong diesel-demand growth. In Europe, diesel will continue gaining market share at the expense of gasoline as consumers switch to diesel-powered cars. Developing countries such as China and India are consuming more energy. Those countries often prefer diesel over gasoline because of its flexibility: the fuel can be used to power industrial plants as well as transportation.
In the U.S., demand is expected to grow as car manufacturers introduce more diesel-powered cars.


If U.S. consumers take to diesel, that would put them in line with drivers in place like Europe. As the current price dynamic for diesel and gasoline shows, that can be a mixed blessing. Because many refineries outside the U.S. are set up to produce more diesel, increasing U.S. reliance on that fuel means the U.S. would have more sources.
But those refineries are also feeding demand at home. As demand for diesel grows elsewhere in the world, consumers could increasingly find themselves in a tug of war over supplies -- a dynamic that is contributing to higher diesel prices today.


For 2008, the DOE's Energy Information Administration is expecting demand for diesel and related products, as well as gasoline, to grow less than 1% from the previous year. But in 2009, the EIA sees diesel demand growing 1.6%, twice as fast as gasoline.


Since Feb. 1, U.S. diesel prices have jumped 16%, compared with 8% for gasoline prices.
In the short-term, U.S. refineries that are set up mainly to produce gasoline have little flexibility to churn out more supplies of diesel. To increase capacity, refineries would have to invest heavily in new equipment. The U.S. will also have a hard time attracting barrels of diesel from abroad because of strong demand elsewhere, meaning the diesel market in the U.S. will continue to be tight.


Some North American refiners are beginning to place long-term bets on diesel. Newfoundland & Labrador Refining Corp., a Canadian company that is behind one of the few new refining projects in North America, is betting big on diesel. About two-thirds of the plant's production, which is expected to hit the markets in 2012, is expected to be diesel and related products.


One-third of the output will be gasoline. The refinery will have the capacity to process 300,000 barrels of oil a day.


Marathon Oil Corp. is constructing an expansion to its largest refinery, in Garyville, La., that will increase its diesel production.
For refiners, the economics alone are persuasive. A barrel of diesel is fetching almost $28 more than a barrel of oil, according to Muse, Stancil & Co., a consulting firm specializing in the energy industry. The difference between a barrel of gasoline and a barrel of oil is $2.14.
For U.S. consumers, higher diesel prices mean higher costs for goods as retailers pass on some of the increase in transportation costs.

http://online.wsj.com/article/SB120527903284528663.html?mod=fpa_whatsnews



Write to Ana Campoy at ana.campoy@dowjones.com

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  #2  
Old 03-12-2008, 08:18 PM
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Since most shipping is by truck and most trucks are diesel, I don't see diesel ever not being in demand.
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  #3  
Old 03-12-2008, 08:53 PM
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Diesel demand is probably pretty non elastic. Everything is shipped by a diesel powered something or other, so unless people ship less, which could happen in a recession, demand shouldn't drop.
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Old 03-12-2008, 09:04 PM
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Looks like it is about time for some downsizing of trucks - the big ones. The ones that, just like pickups and SUV's, have gotten bigger and more bloated in the last 10-15 years.

What is it, that makes it necessary to have trucks as big as they are, here in the U.S.?
Other counties haul stuff via truck...roads pretty much the same like ours....some mountains, hills, turns and things....nothing unusual. So why do our hardworking truck drivers have to drive these fuel sucking behemoths?
Doesn't Kenworth realize they are stealing money from the wallets of truckers, by making such oversized trucks?

Then again...they can't be blamed....they're capitalists, and they heard that there's a sucker born every minute.

trucky - tell me.....Why are your trucks so damned large? Won't 375HP pull a load along the road just as well as 665HP? yeah...your 0-60 times won't be as impressive, but I really don't give a crap about that.
So tell me, trucky.....why aren't you pounding your fists at the truck dealers desk, and asking him why he can't make smaller more fuel efficient trucks?

(Yes, I can see the need for a small percentage of trucks needing to be larger than average...cross country rigs with a bedroom...fine/ But you don't need 14liters and 515HP for most trips)
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  #5  
Old 03-12-2008, 10:04 PM
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I don't have facts and figures but I bet that the larger trucks that we have here in the US are more fuel effecient per mile ton than the smaller trucks in Europe.

Over there they have narrower streets, sharper turns and narrower roads, so the trucks have to be built differently to get around.

Tomorrow I am going to Ohio to pick up my Airstream from the factory where it had a semi major repair done. I will be taking secondary roads and driving 60 to 65. A year or so ago I would have taken the interstate and driven 30 extra miles so I could save a couple of hours.

Tom W
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  #6  
Old 03-12-2008, 11:37 PM
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Quote:
Won't 375HP pull a load along the road just as well as 665HP?
Larry, they're hauling 53' trailers with gross vehicle weight (fully loaded) at 50-60,000 lbs. And presently getting 6-8mpg with that kinda tonnage aint bad. Compare weight ratio to fuel consumption with that of 240D.

Plus dont forget 53' trailer matches standardized shipping container size, many of which are directly off-loaded onto flatbed rigs at seaport docks Newark, Long Beach, Miami, etc. Meanwhile visit any USA/Mexico border state and you'll see hundreds of 53' dry vans being hauled on railroad flat-cars, hooked up with tractor/trucks at each end of their journey.

Finally, what you "see" as larger and larger semi-trucks is actually fiberglass condo shells over raised air suspension chassis powered by pretty much the same engine as 30 yrs ago. Rigs have actually gotten lighter in weight, not heavier.

(edit: Tom, lemme know if you ever see decent and reasonably priced Airstream 'Bambi' for sale. I'm thinkin would match towing capacity of my w116 300SD. Should be an excellent adventure you visiting Airstream, have fun.

Last edited by 300SDog; 03-12-2008 at 11:55 PM.
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Old 03-12-2008, 11:44 PM
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The gross power of the engine does not really matter as long as with more power you gear it so the motor turns as slowly as possible to maintain the cruising speed you want.

So if you (theoretically) had a 300 hp motor you would have to turn it twice as fast to pull the same load with the 600 hp motor.

I think the larger motor turning slower probably would ace it because slower rpm would result in less friction loss.

Tom W
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..I also have a 427 Cobra replica with an aluminum chassis.
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  #8  
Old 03-13-2008, 01:05 AM
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ship cross country loads by.. RAIL!


damn these diesel prices - (begins soldering copper pipes together for dons biodiesel processor... MKII)
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Old 03-13-2008, 03:03 AM
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Diesel jumped from $4.09 to $4.19 between Moday and Wednesday ...
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Old 03-13-2008, 08:22 AM
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Quote:
Originally Posted by TheDon View Post
ship cross country loads by.. RAIL!


damn these diesel prices - (begins soldering copper pipes together for dons biodiesel processor... MKII)

I see huge freight trains everyday running through Brunswick, Md. four diesel locomotives pulling something like 6000 tons of coal.

I wonder how much fuel the locomotives are burning to move that kind of load.
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Old 03-13-2008, 09:25 AM
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Quote:
Originally Posted by t walgamuth View Post
The gross power of the engine does not really matter as long as with more power you gear it so the motor turns as slowly as possible to maintain the cruising speed you want.

So if you (theoretically) had a 300 hp motor you would have to turn it twice as fast to pull the same load with the 600 hp motor.

I think the larger motor turning slower probably would ace it because slower rpm would result in less friction loss.

Tom W
Some of the 'need' for the 600 hp vs the 400 hp diesel motors for the big rigs is the mountains. 400 hp does well acroos the flat land. Over the Rockies then it helps to have that extra HP. At least thats what I hear, at work. Some of that info come from a long time friend who drove trucks for a couple of years. I have driven out west in Colorado. The eastern half is actually flat. Then the mountians pop up. Raton Pass to New Mexico is angled like a jump ramp. I didn't get to Wolf Creek pass. Yeh, I'd have to play the song if ever I did.
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  #12  
Old 03-13-2008, 11:52 AM
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I believe the railroad industry claims they can move a ton of freight over 400 miles on a gallon of fuel.
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  #13  
Old 03-13-2008, 01:27 PM
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Quote:
Originally Posted by Larry Delor View Post
Looks like it is about time for some downsizing of trucks - the big ones. The ones that, just like pickups and SUV's, have gotten bigger and more bloated in the last 10-15 years.

What is it, that makes it necessary to have trucks as big as they are, here in the U.S.?
Other counties haul stuff via truck...roads pretty much the same like ours....some mountains, hills, turns and things....nothing unusual. So why do our hardworking truck drivers have to drive these fuel sucking behemoths?
Doesn't Kenworth realize they are stealing money from the wallets of truckers, by making such oversized trucks?

Then again...they can't be blamed....they're capitalists, and they heard that there's a sucker born every minute.

trucky - tell me.....Why are your trucks so damned large? Won't 375HP pull a load along the road just as well as 665HP? yeah...your 0-60 times won't be as impressive, but I really don't give a crap about that.
So tell me, trucky.....why aren't you pounding your fists at the truck dealers desk, and asking him why he can't make smaller more fuel efficient trucks?

(Yes, I can see the need for a small percentage of trucks needing to be larger than average...cross country rigs with a bedroom...fine/ But you don't need 14liters and 515HP for most trips)
If there was any economic benfit to it they would use them. Its a business, if you are running 500 trucks 1/2 of an extra MPG adds up fast!
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Old 03-13-2008, 07:39 PM
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I have to admit...I was ranting a little...I must have been....I found a smashed up soapbox in the corner.

Aaaaanyway..... I hear, and have seen, that some trucks are switching to a wider single wheel, instead of two skinny ones (dualies). Apparently there is less rolling resistance, which would equal fuel savings.
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  #15  
Old 03-13-2008, 10:26 PM
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gimme a low-tech 240D
 
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Weird as it might seem, they're going towards automatic trans - cuttin mileage down to 4mpg.

Largest engine is the 600+ hp Mach Bulldog, ye see em used as rock haulers. Hardtail Mach's got reputation for beatin up drivers though. Sportiest rig is Peterbuilt, easily the lightest weight of all with aluminum cab & doghouse also tightest steering radius - handles like sports car. 90mph bull-haulers drive Pete's for fast trips outa Amarillo to Denver stockyards.

Right now truckin is very popular 2nd career among husb & wife teams after kickin the kids outa the house. No entry level top-end age limit. Imagine gettin paid $100k combined to travel the states with wife. Most truckers aint the gorillas ye think they are. Many are college educated refugees from 9-5 desk jobs they hated most of their lives. Reconnoitre 3 week truckin school is all ye need, job placement is guaranteed.

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