Gas prices should be lower...dont you agree?

[S13_love]

I just saw in the news today that the price for a barrel of oil has fallen below $100 per barrel, but yet gas prices are still high!?!? Here where i live the highest it hit was $4.10/gal and thats when oil was at $150 per barrel...but now its below $100 and gas here is at $3.73/gal !? I know that gas stations are going to take their time in lowering the prices but honestly, for how long though? Is anyone out there was considerable knowledge for this situation that would provide any info or explanation?

Thanks
Modified by S13_love at 8:03 PM 9/15/2008

[SteveTheTech]

You know at this point it seems like more of a game with our wallets. The anticipation of disaster is enough to send out a ripple effect on the price of gasoline in this country.

There are people here that will say it's the specualtion of a fluctuation in the supply chain, but we all know that there is more than enough fuel to hold us through a short hiccup in the supply.

They say that 3 oil platforms were destroyed during the storm. At peak output the entire Gulf only adds less than 1/4 of our oil intake. It takes time to refine this oil and ship it, since prices are not really set by the station themselves, it leave the oil companies which seem to be taking advantage of the consumer at their time of greatest need. That's what we get for the decades of loyalty and returning business.

Whenever people panic in mass for and consume all of an available commodity the price will rise, that is understandable it's supply and demand. As supply is returned to normal the price should follow that is not the way it goes with fuel, for some reason it goes down significantly slower than it goes up.

[S13_love]

true...i love how that fuel is only the commodity that doesn't follow the supply and demand curve like it should...

But i see what you mean, the fear of a "shortage" will cause people to fill up their gas tanks to full instead of half full (or whatever was necessary), so...truly hurricanes shouldn't even affect prices in the southwest and northwest (in particular), yet somehow it does...thats the part that i dont understand

Basically gas stations technically are gouging us right now arent they?

[AZhitman]

Nope. Weve covered this.

The gas in those underground tanks was bought at market price on the day they were filled.

Here's my issue with those who complain aboutgas prices:

1) Roughly where they should be, given inflationary increases since the 80's (people got spoiled).2) Cheaper than most other developed countries.3) Less traffic.4) Less pollution.5) Less "global (cough BS cough) warming"6) Increased motivation to pursue alternative fuel technologies.7) Increased public transit infrastructure and funding.8) More flexible work-week schedules being pushed.9) More time spent at home with family.

[HashiriyaS14]

Nope. Weve covered this.

The gas in those underground tanks was bought at market price on the day they were filled.

Here's my issue with those who complain aboutgas prices:

1) Roughly where they should be, given inflationary increases since the 80's (people got spoiled).2) Cheaper than most other developed countries.3) Less traffic.4) Less pollution.5) Less "global (cough BS cough) warming"6) Increased motivation to pursue alternative fuel technologies.7) Increased public transit infrastructure and funding.8) More flexible work-week schedules being pushed.9) More time spent at home with family.

Yep, gas prices trail oil prices by a couple weeks. That stuff takes time to refine, ya dig? Additionally, all sorts of other costs, like the aforementioned refining, can somewhat skew the price of gasoline so that it's fluctuations are not directly proportional to those of light sweet crude.

And yeah, aside from the crack about global warming being BS, I agree with all the stuff Greg is saying. I don't necessarily think that higher fuel prices are horrible for us in the long term, it will spur more alternative energy research, increase work-at-home, that kind of thing.

The only reason, however, that gasoline is cheaper here relative to other developed countries is because we tax it less. Many other first-world nations have a 100%+ tax on gasoline. We're not getting some super-special bargain rate per barrel because we're Americans, that's not why gas is $4\gal here and $8/gal in Holland. It's because of tax.

[SteveTheTech]

I see gas prices have been cover at lenth here after a quick search.

I still think the media has an overwhelming effect on public perception over the gas "crisis". I agree with the previous statements and it is relitive especially in the global markets where other countries have been paying significantly more. An increase of a few total dollars shouldnot be enough to destroy your budget. People need to accomodate inflation and rising prices. This may be what the country needs to finally take alternate fuel sources seriously.

[srellim234]

The only way to drive down gas prices is to lower demand to a level below the supply. You can always do your part by refusing to buy it at a price you don't like.

[HashiriyaS14]

As I mentioned above, gas prices can appear not to track to oil prices for any number of reasons.

Presently, that reason is the impact of Hurricane Ike on US refining capacity in the gulf.

One big way we can get oil AND gas prices down for Americans is to strengthen the dollar, but that will only come with deficit reduction.

[smockers83]

Gas stations, when the price of oil falls, can't really drop their prices accordingly. If their tanks were filled up with more expensive gasoline due to a higher oil price, them cutting the price would create an even bigger loss than what they're already experiencing.

The dollar can get stronger for a number of different reasons, but the biggest reason right now will be and is demand for our exports.

[audtatious]

Which I do find interesting. They fill up the tanks and sell it at, say, $3.86/gallon. The price per gallon of the same gas in their tank will go up with the market but it won't go down with the market.

[smockers83]

Exactly, because they can actually make a profit off of it when prices go up (they have a very hard time making a profit on gasoline sales, which is why they are all convenience stores now). When they get that delivery at a price, that price essentially serves as an artificial price floor that they don't really want to go below.

[audtatious]

Yep

I'm just making note that it is the gas stations controlling the "at the pump price" when gas fluctuates. At that point, it's not the oil company doing it. It also allows the gas stations, who really don't make much profit off gas sales, to get a bit extra.

[96Qowner]

The relationship between gasoline supply/demand and crude oil supply/demand isn't that straightforward, either. You have to take refinery capacity into account.

And I was watching O'Reilly last night and he got into it with Neil Cavuto. O'Reilly was doing the outraged shouting thing and Cavuto was quietly trying to explain to him that when crude was $50 gas was $2.20. So when crude went to $150, why didn't gas go to 6.60?

Hm?

We spend more on food, but we don't get anywhere near as outraged at the increases. It is what it is, folks. If you don't like it, buy less gasoline. You can't demand that a company sell you more than they have to sell, and then complain about rising prices. As long as the guy behind you is willing to pay the price, that's the price you pay. It's HIS fault. He's the bidder.

[S13_love]

Yep, gas prices trail oil prices by a couple weeks. That stuff takes time to refine, ya dig? Additionally, all sorts of other costs, like the aforementioned refining, can somewhat skew the price of gasoline so that it's fluctuations are not directly proportional to those of light sweet crude.

ok,that makes sense...i didnt think that one through

[/QUOTE]And yeah, aside from the crack about global warming being BS, I agree with all the stuff Greg is saying. I don't necessarily think that higher fuel prices are horrible for us in the long term, it will spur more alternative energy research, increase work-at-home, that kind of thing.

[/QUOTE]

Imo to me the price should be at 2.50-2.70 mark but i doubt it will ever go that low ever again. It's bs though that we have to look into alternative fuel sources when forced upon...lol i bet you didn't know that one of the first cars porsche made ran on both gas and electricity, hybrids really have been around for about 100 years, and even back in the 70s and 80s, the technology was there to make fuel efficient cars, we just never utilized that

As for the global warming im not too sure where he was going with that, theres not going to be less, if anything more cause of china and other developing countries...right? Imo this whole global warming thing is blown way out of proportion, the media makes it sound like we are melting the earth...throughout earths history there have always been warming and cooling trends, and to say we are in global warming is only based on 50 years worth of data, i guess all we are doing is speeding up a warming trend with all the pollunts, but nothing too serious yet

[audtatious]

If you wish to discuss global warming then I suggest you go to this thread:

zerothread/321948

I suggest you read it all before trying to instill viewpoints that have already been dismissed.

[smockers83]

The relationship between gasoline supply/demand and crude oil supply/demand isn't that straightforward, either. You have to take refinery capacity into account.

And I was watching O'Reilly last night and he got into it with Neil Cavuto. O'Reilly was doing the outraged shouting thing and Cavuto was quietly trying to explain to him that when crude was $50 gas was $2.20. So when crude went to $150, why didn't gas go to 6.60?

Hm?

That's all true as well. Gas and oil prices don't change on a 1:1 basis for those reasons and a couple of others. Gasoline isn't the only product coming out of crude. Heck, within gasoline there are numerous different products based on octane ranging from 85 to 100. You also have diesel, jet fuel (kerosene), lubricants, etc.

As for individual gas station prices, those aren't set by the stations, there's usually a regional manager of some sort that tells them what price to set. Its pretty much a game really--a manager will set a price low at one station and to compensate will set a price high at another. He can do this to compete with the other stations in the area.

[AZhitman]

s13 - You're getting it now...

Also, what a great point by Cavuto.

I recall not so long ago when a loaf of bread was $ .99 and now it's almost $3. Milk was a buck, now it's three. Gas prices are NOT "astronomical".

Here's MY question: Now that oil is $91 a barrel, WHERE is the praise for the current administration? WHERE are the bigmouths who blame GWB for "astronomical fuel prices" when oil was $150 a barrel? OK, it's dropped to $91... Where are those people now?

I'll tell you where they are. They're sitting in the corner, punching themselves in the head because they can't figure out a way to credit the Obamessiah for saving them from high gas prices. Mark my words.

[audtatious]

The nod won't go to Bush. They would hold Pelosi and Reed as the ones who worked to lower the prices. Somehow, either Obama needs to get credit or the Dem-controlled Congress needs to get credit (since they have accomplished NOTHING in the last 1 3/4 years).

[smockers83]

They (Pelosi and the Democratic Congress) may get undeserved credit. They just passed an energy plan allowing for offshore drilling in the House, but there's a however coming. However, they only authorized drilling that is 50 or more miles off the shore. The majority of oil available for drilling is within 50 miles of the shore. On top of that, Bush plans to veto it anyway.

[audtatious]

There are some other "add ons" to it as well. They know it isn't going to get past a veto but they want to be able to point to Bush and blame him for not wanting to "help America".

[smockers83]

Just so that people can see how oil and gas prices move, here's a graph of the past year.



The thing about the situation today is that the Gulf just had a hurricane, so in the graph that's going to look like an abnormal situation, which it is, as there are other factors outside of the price of oil affecting the price of gasoline.

[SteveTheTech]

There are just so many things to attack GWB for that gas prices are just one small insignificant thing. The media is busy the economy is going to hell and they have not sufficiantly freaked out the masses enough to switch back to gas yet. Hold on it will come back soon. They blew their graphics budget on the "Pain At The Pump" flying gas pump animation.

Maybe the drop has something to do with decreased demand? Average miles per driver has dropped significantly this year. To the point that localities must find another source of revenue to pay for local infrastruster. Americans have driven 9.6 BILLION fewer miles this year over last.

http://www.nytimes.com/2008/07...login

I still don't think our elected officials have done enough to warrant a thank you. It seems more like supply and demand taking it's course.

[audtatious]

The economy is not going to hell. The companies who have made unwise decisions are having problems and those who bought houses they could not afford are having problems. Economies go up and down. The only blame I fully put at the foot of Bush is the increased cost of food due to him pressing forth ethanol. The rest can be split across the government as a whole.

It's funny but I actually stated a while ago that oil prices would drop worldwide after the Olympics were over because China would have less need of oil since they would go right back to polluting again. Seems to be the case.

[SteveTheTech]

Yeah I know it's not as bad as Fox News would like to portray.

I don't see much of a hit, since I have have no high risk investments and or ARM. The coverage of this in the press is unprecedented at this day and age with the internet and cable news networks. The truth of the matter is that this is not the first time or the worse (as of time of posting) that the cycle has gone up and down.

I find it pretty interesting how the effects of people making greedy decisions from borrowers to the CEOs of major institutions have had a ripple effect on the almost every aspect of our daily life. I truly hope that this period in our history will not pass without some reform.

It's funny but I actually stated a while ago that oil prices would drop worldwide after the Olympics were over because China would have less need of oil since they would go right back to polluting again. Seems to be the case.

I was not here for that I think but. It makes perfect sense that once their demand returns to its ever-still-increasing need for oil that global prices would drop. Demand is still increasing and since our current usage is down and we are one of the largest users of oil it should drop. Gasoline is another comodity to us but it is such a vital part of our lives the prices seem to threaten to ruin our economy (as per Fox local news) but I feel that a good portion of this is hyper inflated.

It is also an election year which may have something to do with it.

[audtatious]

Yeah I know it's not as bad as Fox News would like to portray.

I think the majority are playing the "doom and gloom", not sure why Fox needs to be singled out.

As far as gas goes, we need to stay buddy buddy to a few countries for a while. Russia is stepping up to start taking over parts of the oil market which simply does not look positive to me at all. We need to ensure that we can provide for ourselves and not worry about the whole economy crashing over our heads if a few countries get frisky and shut down their oil supplies.

[SteveTheTech]

I think the majority are playing the "doom and gloom", not sure why Fox needs to be singled out.

It's my favorite thing to pick on since they are so "fair and balanced" and the other networks don't candy coat their braises nearly as much, even though it is apparent to absolutely everyone except their graphics department.

I think Russia deserves their independence and more power to them but they are looking out for #1 over anything else. (Not a bad concept)

I whole heatedly agree with your statement about supplying our demand. It's a brilliant concept and I wish that it was a practical solution. The amount of gasoline to barrel of oil refined is so low that there is no way we can supply that autonomously but it does not seem plausible.

http://www.newton.dep.anl.gov/...8.htm

It's a short simple answer to the question I Googled, I think it's from a legitimate source. I'm actually surprised by the numbers although I thoroughly understand what else is made out of the other 1/2 a barrel. It's pretty good food for thought though.

[Jesda]

Most topics are ruined by ideologically-driven retards with a narrow view of the universe. This thread is refreshingly sane.

/enjoyment ensues

[APEXi240]

The nod won't go to Bush.

Why should he? Bush and the current administration didn't take actions that directly caused lower prices, nor did they take action that directly raised prices.

Again, the problem with both the "left" and the "right". Each party will try it's hardest to blame the other for problems that either party had very little to do with.

[Jesda]

"Greed" is nothing but "profit" with a negative connotation. Its an emotional knee-jerk word that conjures images of so-called robber-barons and slumlords. Its like the Godwin's Law of economic debate.

When gas was $1 oil was $10. This means when oil was $150 gas should have been $15 per gallon.

The correlation is not linear.y=mx+b does not apply to the relationship between crude oil and gasoline.