Why? When oil prices go up, gas prices go up immediately and at the same rate, but when oil prices come down, even by large amounts, gas prices don't do the same. I think this is the kind of garbage that gets people so irate at the oil industry...typically, in the past anyway, less than $90/bbl oil correlated to gas prices under $3....why isn't that the case today?
Gas prices not dropping at same rate as oil prices
- Thread starter grampi
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JHZR2
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Is it the oil inductry or the gas station owners, which may be independent.
If proces go up, they capitalize on it ASAP. If they go down, they have $$$ old stock in the tanks that they need to get rid of.
If proces go up, they capitalize on it ASAP. If they go down, they have $$$ old stock in the tanks that they need to get rid of.
Speculators, higher credit card swipe fees, stations profit-taking on the ride down, higher trucking costs due to higher fuel prices, and gas stations needing to sell higher-priced inventory before getting a hew shipment in.
Pay you hard-earned money and take a pick...
Pay you hard-earned money and take a pick...
Part of the problem is they still quote prices in WTI (W. Tex Intermediate) even though the majority of the oil into refineries tracks brent crude. Also gasoline is only one of the products that refineries make, so margins on diesel and jet fuel affect the price and supply of natural gasoline. Finally the WTI they quote is NEXT month's price of oil delivered to refinery, not tomorrow's price delivered to the gas station.
Originally Posted By: sciphi
Speculators, higher credit card swipe fees, stations profit-taking on the ride down, higher trucking costs due to higher fuel prices, and gas stations needing to sell higher-priced inventory before getting a hew shipment in.
Pay you hard-earned money and take a pick...
don't forget the stockholders who demand an ever-increasing return on their shares! so if you hold oil company stock, you ARE part of the problem. (of course, if you are, you are thinking 'what problem? I don't see any problem!')
Speculators, higher credit card swipe fees, stations profit-taking on the ride down, higher trucking costs due to higher fuel prices, and gas stations needing to sell higher-priced inventory before getting a hew shipment in.
Pay you hard-earned money and take a pick...
don't forget the stockholders who demand an ever-increasing return on their shares! so if you hold oil company stock, you ARE part of the problem. (of course, if you are, you are thinking 'what problem? I don't see any problem!')
[/quote]
don't forget the stockholders who demand an ever-increasing return on their shares! so if you hold oil company stock, you ARE part of the problem. (of course, if you are, you are thinking 'what problem? I don't see any problem!')[/quote]
We're all speculators. Own any life insurance policies? have a retirement account? Mutual funds? These entities buy oil stocks and reap rewards from speculation in commodities such as oil.
don't forget the stockholders who demand an ever-increasing return on their shares! so if you hold oil company stock, you ARE part of the problem. (of course, if you are, you are thinking 'what problem? I don't see any problem!')[/quote]
We're all speculators. Own any life insurance policies? have a retirement account? Mutual funds? These entities buy oil stocks and reap rewards from speculation in commodities such as oil.
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Oil companies want to make money too. This is the American way!
Originally Posted By: Burt
Part of the problem is they still quote prices in WTI (W. Tex Intermediate) even though the majority of the oil into refineries tracks brent crude. Also gasoline is only one of the products that refineries make, so margins on diesel and jet fuel affect the price and supply of natural gasoline. Finally the WTI they quote is NEXT month's price of oil delivered to refinery, not tomorrow's price delivered to the gas station.
You can get quotes for Bent crude. (Ticker symbol SC.) Bent prices are down 18% since April. Retail gasoline is not down 18% since April.
Bottom line: The price of retail gasoline doesn't track oil prices very well, regardless of the type of oil.
Part of the problem is they still quote prices in WTI (W. Tex Intermediate) even though the majority of the oil into refineries tracks brent crude. Also gasoline is only one of the products that refineries make, so margins on diesel and jet fuel affect the price and supply of natural gasoline. Finally the WTI they quote is NEXT month's price of oil delivered to refinery, not tomorrow's price delivered to the gas station.
You can get quotes for Bent crude. (Ticker symbol SC.) Bent prices are down 18% since April. Retail gasoline is not down 18% since April.
Bottom line: The price of retail gasoline doesn't track oil prices very well, regardless of the type of oil.
Originally Posted By: tonycarguy
You can get quotes for Bent crude. (Ticker symbol SC.) Bent prices are down 18% since April. Retail gasoline is not down 18% since April.
Bottom line: The price of retail gasoline doesn't track oil prices very well, regardless of the type of oil.
Oh, and how much is gasoline down, percentage-wise since April? By the way, you can't expect Retail gasoline to drop one for one because alot of the price is taxes, transportation and refining margin. So you have to compare Wholesales prices to oil prices. Divide the oil price in $/bbl by 42 and you'll find that for most of the year, refiners are giving gasoline away at what it cost them for a proportionate share of the oil. They make most of their profits on the other products they sell, but not gasoline. Sorry to disappoint you with the news that refining is not a very profitable business. If it were, Conoco would not be selling it's refinery to Delta for a relatively small amount.
You can get quotes for Bent crude. (Ticker symbol SC.) Bent prices are down 18% since April. Retail gasoline is not down 18% since April.
Bottom line: The price of retail gasoline doesn't track oil prices very well, regardless of the type of oil.
Oh, and how much is gasoline down, percentage-wise since April? By the way, you can't expect Retail gasoline to drop one for one because alot of the price is taxes, transportation and refining margin. So you have to compare Wholesales prices to oil prices. Divide the oil price in $/bbl by 42 and you'll find that for most of the year, refiners are giving gasoline away at what it cost them for a proportionate share of the oil. They make most of their profits on the other products they sell, but not gasoline. Sorry to disappoint you with the news that refining is not a very profitable business. If it were, Conoco would not be selling it's refinery to Delta for a relatively small amount.
Of course, gas prices can't expected to be linear with oil prices. If a refinery were able to get the crude for free, they certainly wouldn't be able to refine it to gasoline and give it away for free. Wages in the oil patch are atrociously high. Engineers don't work for free. The governments in both our countries certainly want their cuts.
I wish our gas prices were what they were in, say, 1990 to 1994. I'm glad, however, that my wages aren't what they were back then.
I wish our gas prices were what they were in, say, 1990 to 1994. I'm glad, however, that my wages aren't what they were back then.
Don't forget that gas, diesel, heating oil etc... are all sold on the market the same as crude is. Gas does not come straight from the refinery to the pumps with the refinery or refinery owner setting the price on what the stations pay. Refined gas is actually bought on the trade floor and then sold to the distributors who then sell it to the gas stations who sell it to us. Speculators are the problem there too. The refiners don't set the prices based on crude. The price at the pump is set based on what the refined gas trades for on the market( approx $2.65 today last I saw ).
In the past you could pretty much know what gas would be based on the cost of refined gas on the market. Gas at the pump generally ran anywhere from 45-50 cents more at the pumps( here anwyay) vs what refined gas traded for on the market. That has changed during this run up however. Gas prices at the pump are not running in the same price range relative to the market as they have in the past. Around here for the last year or so we have run at a rate of 80 cent+ p/gallon difference. It is just another rip off. Gas today as said was $2.65 on the market and around here it was selling at $3.46. So 81 cents more p/gallon.
The price of refined gas relative to the price of crude is also much higher now then it has been which is also keeping prices up. No one is even bothering with excuses anymore; they are just sticking it to us and not worrying about it.
In the past you could pretty much know what gas would be based on the cost of refined gas on the market. Gas at the pump generally ran anywhere from 45-50 cents more at the pumps( here anwyay) vs what refined gas traded for on the market. That has changed during this run up however. Gas prices at the pump are not running in the same price range relative to the market as they have in the past. Around here for the last year or so we have run at a rate of 80 cent+ p/gallon difference. It is just another rip off. Gas today as said was $2.65 on the market and around here it was selling at $3.46. So 81 cents more p/gallon.
The price of refined gas relative to the price of crude is also much higher now then it has been which is also keeping prices up. No one is even bothering with excuses anymore; they are just sticking it to us and not worrying about it.
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Originally Posted By: NHHEMI
It is just another rip off. Gas today as said was $2.65 on the market and around here it was selling at $3.46. So 81 cents more p/gallon.
The price of refined gas relative to the price of crude is also much higher now then it has been which is also keeping prices up. No one is even bothering with excuses anymore; they are just sticking it to us and not worrying about it.
I'm not saying we're getting a great deal or anything. However, even if crude went down to $15 a barrel and the oil companies shot at breaking even, I don't think we'd be able to see gas prices where they once were.
Back in the early 1990s, a pump jockey/cashier was making under $5 an hour. That's essentially doubled.
It is just another rip off. Gas today as said was $2.65 on the market and around here it was selling at $3.46. So 81 cents more p/gallon.
The price of refined gas relative to the price of crude is also much higher now then it has been which is also keeping prices up. No one is even bothering with excuses anymore; they are just sticking it to us and not worrying about it.
I'm not saying we're getting a great deal or anything. However, even if crude went down to $15 a barrel and the oil companies shot at breaking even, I don't think we'd be able to see gas prices where they once were.
Back in the early 1990s, a pump jockey/cashier was making under $5 an hour. That's essentially doubled.
Oz's $ rose and rose against the US, and our fuel still went up.
The talking heads were predicting that it would take a DROP in our currency to bring prices down fractionally (like how does that even warrant saying, let alone believing)...it happened, and the price is still there.
The talking heads were predicting that it would take a DROP in our currency to bring prices down fractionally (like how does that even warrant saying, let alone believing)...it happened, and the price is still there.
About 8% and crude is down about 12% . Considering the 6 week time lag that's not far apart .
A gallon of milk is $3.00-3.50 is okay, a gallon of gas is fractionally higher at around $3.60-3.65 (national average) and everybody is complaint about it.
How difficult to produce a gallon of milk from a cow compares with a gallon of gas from crude oil ?
How difficult to produce a gallon of milk from a cow compares with a gallon of gas from crude oil ?
About the only reason we're getting any break in oil prices is because the Euro Crisis has led to a minor rally in the Dollar. Oil is priced in dollars, stronger dollar= cheaper oil, (at least for the U.S.)
Also, its an election year, so Obama has toned down the sabre rattling with Iran, and Q.E.II, i.e. Federal Reserve money printing, seems to be on hold, for now.
Any change in the above could start oil prices marching higher again.
Also, its an election year, so Obama has toned down the sabre rattling with Iran, and Q.E.II, i.e. Federal Reserve money printing, seems to be on hold, for now.
Any change in the above could start oil prices marching higher again.
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