Wednesday, May 28, 2008

Oil -- How is it Formed?

With all the talk these days about oil, I had to jog my memory regarding a simple question. How is oil formed? Calling oil a "fossil fuel" is a hint, but I've posted some links that explain the process of how oil is formed (in the Earth) and then the value chain that extracts, converts and distributes oil in its various final forms to you and I the consumer. It's important to understand the chain so that you can understand its price.

Link to "How is Oil Formed"

Link to One of the Sources in Above Link, "Where does my Gasoline come from?"

Supposedly margins on gas are razor thin, so while the oil companies make tons of dough, the small franchise owner that operates the gas stations have become more reliant upon changing their product mix offering.

Washington Post Link on Gas Station Margins

Link to How Franchisee is Getting Squeezed

1 Comment:

Cynthia said...

Ah the life cycle.. it's pretty amazing. So technically we can blame the demise of the o-zone on the great ancestors of the octopus?