You’ll never see $70 oil again.

[Arc]

Of course demand still matters, but recent fuel price spikes are being driven primarily by supply shocks and supply risk, not by a sudden surge in consumer demand. Saying consumers could reduce driving and eventually push prices lower does not change the fact that the current price moves started on the supply side.

You’re describing how demand can eventually affect and discipline price. I’m describing what caused the current price spike. Those are not the same thing. Recent increases are about constrained or threatened supply, not some sudden boom in people wanting to drive more.

What started the increase in price? Was it not stock prices? Speculation? Doesn't sound like anything more than another chance at enrichment. I say this because I am one of the few who do not have greed as a motivator. It is better to give than to receive and that is how I have always acted even as a business owner.

 

[4wd]

Are YOU the Landman?

 

[PWMDMD]

What started the increase in price? Was it not stock prices? Speculation? Doesn't sound like anything more than another chance at enrichment. I say this because I am one of the few who do not have greed as a motivator. It is better to give than to receive and that is how I have always acted even as a business owner.

You’re conflating mechanism and motive into the same argument. How I choose to run my business has nothing to do with geopolitical politics and how oil companies choose to run their companies.

Speculation can amplify a price move, but it very rarely creates the underlying reason for the move. Traders bid prices up because they expect tighter supply or greater supply risk. That is still a supply-side story and “speculation” is not an alternative to a supply shock. It is often the market’s way of pricing a supply shock before it fully shows up at the pump. This is a supply issue.

 

[SC Maintenance]

Top link is from today and the others from the past week and half.

https://apnews.com/article/iran-war-isreal-us-kuwait-d052e93613dac59e4164194f4df52c88

https://apnews.com/article/oil-gas-...persian-gulf-24c4b439d2c6a5b571fea90e4d1227d8

https://www.aljazeera.com/news/2026...f-iranian-missiles-drones-target-gulf-nations

Yes, more of the same - this hit, that hit. Not the Armageddon you portray.

Do you know that in the first days of the war multiple ships claimed to be "hit". They were hit - when the Iranian missiles were shot out of the sky the debris fell on some ships. Counts as "hit". Ship unhurt.

Yesterday there were headlines that $20B in damage was done to the Ras Laffan LNG facility, and gas spiked. Turns out it was hit by something, but its mostly shut in, and some minister or other said they would loose $20B in revenue if the war continued.

Fog of war. Keep calm and carry on.

 

[Arc]

You’re conflating mechanism and motive into the same argument. How I choose to run my business has nothing to do with geopolitical politics and how oil companies choose to run their companies.

Speculation can amplify a price move, but it very rarely creates the underlying reason for the move. Traders bid prices up because they expect tighter supply or greater supply risk. That is still a supply-side story and “speculation” is not an alternative to a supply shock. It is often the market’s way of pricing a supply shock before it fully shows up at the pump. This is a supply issue.

When the price of fuel goes up and its still sitting in an underground tank at the gas station or somewhere else already refined I don't buy the excuses. Pricing in supply shock before it happens is nothing more than an excuse to raise prices beyond what it is worth. People can make justifications all day long but it isn't based on truth. The truth is greed. Unfortunately greed is what everything is based on and it's just a way of life. Those excuses are nothing more than information meant to keep the people from revolting just like all gas stations prices in a given area rising at the same time so you can't punish the one guy who raised his prices. It's also why an individual station who doesn't play the game will be punished on his next fuel delivery by having to pay more than his competition. I know a guy who tried that and he almost lost his stores over it.

 

[PWMDMD]

Keep calm and carry on.

That's easy...I have no choice!

 

[PWMDMD]

When the price of fuel goes up and its still sitting in an underground tank at the gas station or somewhere else already refined I don't buy the excuses. Pricing in supply shock before it happens is nothing more than an excuse to raise prices beyond what it is worth. People can make justifications all day long but it isn't based on truth. The truth is greed. Unfortunately greed is what everything is based on and it's just a way of life. Those excuses are nothing more than information meant to keep the people from revolting just like all gas stations prices in a given area rising at the same time so you can't punish the one guy who raised his prices. It's also why an individual station who doesn't play the game will be punished on his next fuel delivery by having to pay more than his competition. I know a guy who tried that and he almost lost his stores over it.

You are right that greed and opportunism can exist in the system, but you are leaving out "replacement cost". A gas station is not just pricing the fuel already sitting in its tanks. It is pricing the next shipment it has to buy to replace what it sells today. So when wholesale prices jump, retail prices often move before the old inventory is gone because the station has to think about what it will cost to refill those tanks, not just what it paid last week. That does not prove every increase is fair, but it does mean “the gas is already there” is not a complete argument. In fuel retail, you are often paying for the next load as much as the current one.

You are looking at the cost of the gas already in the tank. The station owner is looking at margin on the next load. Fuel retail is a razor-thin margin business. If replacement cost jumps and he waits to raise price until the old inventory is gone, he can sell a lot of gallons and still hurt himself because he has not preserved enough margin to pay for the next shipment. So from the station’s point of view, the sign price is about staying ahead of replacement cost, not just cashing in on what is already underground. Opportunism can exist, but a lot of what looks like greed at retail is really margin protection in a very low-margin business.

 

[Arc]

You are right that greed and opportunism can exist in the system, but you are leaving out "replacement cost". A gas station is not just pricing the fuel already sitting in its tanks. It is pricing the next shipment it has to buy to replace what it sells today. So when wholesale prices jump, retail prices often move before the old inventory is gone because the station has to think about what it will cost to refill those tanks, not just what it paid last week. That does not prove every increase is fair, but it does mean “the gas is already there” is not a complete argument. In fuel retail, you are often paying for the next load as much as the current one.

I know a few owners, managers and fuel distribution guys and it's all more than we like to believe going on. It all just comes down to making maximum profit and many times it's from those who are least able to afford it. Now that I'm older it is easy to see things as they truly are and it's really a cruel world out there and void of compassion for the most part. Good conversation but I have to run for the rest of the day. TTYL

 

[SC Maintenance]

but you are leaving out "replacement cost"

Come down here when there is a hurricane spinnning off shore yet spot hasn't moved, and talk to me about "replacement cost"

Fuel retail is a razor-thin margin business.

It really is not. Below is the spot price of gasoline yesterday. National average yesterday was $3.85. Not so thin.

 

[PWMDMD]

Come down here when there is a hurricane spinnning off shore yet spot hasn't moved, and talk to me about "replacement cost"

It really is not. Below is the spot price of gasoline yesterday. National average yesterday was $3.85. Not so thin.

View attachment 329072

You are using the wrong comparison. Spot RBOB is a wholesale benchmark, not the station’s net margin. The gap between $3.09 and $3.85 includes taxes, freight, blending, terminal costs, and normal retail operating costs. The station is not pocketing that spread. And because fuel retail is a replacement-cost business, the owner has to price for the next truckload, not just the gallons already underground.

Now, on hurricane panic pricing, I agree that stations can sometimes move faster than wholesale and some operators absolutely use fear as cover. That happens. But that does not disprove replacement-cost pricing. It just means opportunism can sit on top of a real replacement-cost model. Those are two different claims. One is “stations price off the next load.” The other is “some stations widen margins when they think customers have no choice.” The second can be true without making the first false.

 

[SC Maintenance]

The gap between $3.09 and $3.85 includes taxes, freight, blending, terminal costs, and normal retail operating costs.

No, thats some AI search junk response.

They typically pay Spot + transport. Then they add retail taxes. But its still not razor thin - they typically are making 30 to 40 cents per gallon gross after transport after tax. So then yes, they need to pay costs out of that, like any business.

Your a businessman - use your common sense and ask yourself this. If its such a razor thin terrible business, why is Wawa, buc-eez, quick trip, circle K and the rest expanding everywhere they can. New stores everywhere. Its not because there loosing money is my guess.

What is interesting is if you look at Spot and retail before this started, the spread was actually more - over a dollar. So there margins are getting compressed now comparatively.

 

[Burt]

If the production increase in plastics (which is a byproduct of oil) is any indication of the state of oil, I'd say we have nothing to worry about.
There's plenty to last the lifespan of anyone reading this thread.

Yeah, I think I first heard that in “The Graduate”.

 

[UncleDave]

When the price of fuel goes up and its still sitting in an underground tank at the gas station or somewhere else already refined I don't buy the excuses. Pricing in supply shock before it happens is nothing more than an excuse to raise prices beyond what it is worth. People can make justifications all day long but it isn't based on truth. The truth is greed. Unfortunately greed is what everything is based on and it's just a way of life. Those excuses are nothing more than information meant to keep the people from revolting just like all gas stations prices in a given area rising at the same time so you can't punish the one guy who raised his prices. It's also why an individual station who doesn't play the game will be punished on his next fuel delivery by having to pay more than his competition. I know a guy who tried that and he almost lost his stores over it.

We all basically pay the price to replace whats in the underground tank at any given time regardless of what was paid when it was filled prior.

I dont like it, it feels like a ripoff, in some ways it is, but you can start a fuel business and be the first guy to buck the trend.

 

[4wd]

Yes, more of the same - this hit, that hit. Not the Armageddon you portray.

Do you know that in the first days of the war multiple ships claimed to be "hit". They were hit - when the Iranian missiles were shot out of the sky the debris fell on some ships. Counts as "hit". Ship unhurt.

Yesterday there were headlines that $20B in damage was done to the Ras Laffan LNG facility, and gas spiked. Turns out it was hit by something, but its mostly shut in, and some minister or other said they would loose $20B in revenue if the war continued.

Fog of war. Keep calm and carry on.

Yep, LNG tankers are one of a kind - and LNG can’t bypass the straight via the SA east/west line like crude oil …

 

[Geekhead]

No, thats some AI search junk response.
They typically pay Spot + transport. Then they add retail taxes. But its still not razor thin - they typically are making 30 to 40 cents per gallon gross after transport after tax. So then yes, they need to pay costs out of that, like any business.

Your a businessman - use your common sense and ask yourself this. If its such a razor thin terrible business, why is Wawa, buc-eez, quick trip, circle K and the rest expanding everywhere they can. New stores everywhere. Its not because there loosing money is my guess.

What is interesting is if you look at Spot and retail before this started, the spread was actually more - over a dollar. So there margins are getting compressed now comparatively.

I remember reading somewhere about 65-70% of a stations profit was from in store convenience sales where the real margins are. Maybe with fluctuating barrel prices this is changing.

 

[Oillover]

Yeah, I think I first heard that in “The Graduate”.

But is it any less true today?
Seriously tho, what today do you know that's made of plastic that was some other durable good before (metal/wood etc.)?
Now imagine it going back to that durable good....highly unlikely

 

[Dinoburner]

What things, and whose things? Who will spend years rebuilding them?

History says we will.

 

[Pablo]

It really is not detail documented how much true damage, if any. A bit early for repair times.

 

[DirtJunky]

Illiois basin is just itching for a Fracking BOOM. It was held back the first time because of lacking IDNR rules, now we have rules, but we need 100+ oil to make it worthwhile. Strata-X had proven 300 barrels per day was possible.. back in 2014, but oil prices crashed. and they left.

On 15 May 2014, the Company successfully completed a 7-stage stimulation of the Burkett 5-34HOR well using approximately 176,000 pounds of proppant. During post completion stimulation production testing, the well flowed back approximately 116 barrels (“bbl”) of light-gravity oil along with 2,100 bbls of completion fluid and formation water over a 30-hour test period, the well ceased to flow on its own, a standard flowback occurrence

 

[Patman]

We all basically pay the price to replace whats in the underground tank at any given time regardless of what was paid when it was filled prior.

I dont like it, it feels like a ripoff, in some ways it is, but you can start a fuel business and be the first guy to buck the trend.

And it goes both ways so in the end it evens out. There are times when the gas in the underground tank at the station was bought at a higher price but they have to sell it for less because all of the other stations around them have dropped their prices