Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
It may also be about different qualities. Light crude is easier to refine, so when refinery capacity is limited, demand for light crude increases. The average/reference price (light/heavy mix) then also rises. When there is plenty of spare refinery capacity, heavy oil is (almost) as good.

If this theory is correct, it should be possible to discern a refinery capacity crunch by the divergence of light/heavy crude price. I don't know if that is the case now, and five minutes of google didn't tell me anything.

by jobh (jbh@lupus.ig3.net) on Thu Aug 18th, 2005 at 06:30:19 PM EST
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