Quote:
Originally Posted by 3Hummer
wouldnt the price per barrel go up if this was the case?
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Not initially in fact taken to the extreme example if refining capacity declines to the point that there is a glut of oil awaiting processing, then the price of oil can actually decline as it becomes heavy on the supply side.
Refinery capacity is one of the keys to low cost oil products, additional drilling and exploration need to match up with refinery capacity to prevent a supply chain bottleneck and hence higher refinery output prices.