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Discussion in 'The Okie Corral' started by Bruce H, Jan 29, 2010.
With crude oil dropping close to ten dollars a barrell in the last two weeks, who took a bath.
Then why is gas still so high at the pump?
Because they scheduled for and bought that stuff three/four weeks ago.
I agree. Gas is still too damned high. If gas was one dollar a gallon our economy would actually be growing instead of remaining in a depressed state.
Because they can is more accurate.
Cause the pump prices aren't really all that closely linked to the prices the futures market pays for what comes out of the ground.
Short term fluctuation based on most recent U.S. economic news (jobs, earnings, etc.)
China, and the BRIC nations are already emerging from recession with impressive growth rates (forecast 7+ % for China).
Oil will be back up soon as a result of worldwide consumption.
ps. gasoline is a distillate -- a market which is not always directly corellated to the price of crude oil.
Anyhow, you won't take a bath as long as you dont sell low. (unless you own short term crude futures)
And they also seem to drop slower than they rise. Our prices have dropped about $.10/gallon lately.
The stores in the tanks and at the refineries was made from crude that was bought at a higher price. Once those stores have been exhausted and they begin purchasing and refining the cheaper priced stuff, the prices will slowly go down.
Too bad it doesn't work the other way. Example, the stuff I have in my tanks I bought at $X. I see the price going up in the FUTURE, but I immediately jack up my price and sell it as if I had paid $X + $2.
Gasoline prices and futures prices are directly related. You will find that the spot market price and futures are usually very close so you can take the futures price as what crude is selling for right now, within a buck or two.
And it will always go up faster than it comes down. It has to. They have to be able to buy gas next week so when they see the futures prices jumping up on crude and gasoline they have to raise it quickly so they are not selling at a loss to their future purchase.
HerrGlock already hit on the reason for it going down slower. That and depending on the competition around them will determine how fast the price drops.
But historically speaking, gas is cheap right now considering the price of crude.
But if you really want cheap fuel for you vehicle, get Obama to start the ground work to open more of the Gulf up to natural gas drilling and start setting up an infrastructure to power our vehicles with it.
Yes, because it makes great business sense sell lower than replacement cost of future product.
I know it's not going to happen, but shouldn't they also then lower the price as futures fall? Either you price in relation to what you paid, what you will pay to replace, or just whatever you think you can get away with and stay competitive. I think #3 is what happens.
Kinda like a free market and stuff.
Yep, kinda like that. As I said, it isn't going to happen.
over half the cost of a gallon of gas is taxes, anyway. get rid of the taxes.
It would certainly help.
We'll get Dick Nixon right on that one.
Sorry. Doesn't happen. We'd like to THINK it happens, but it don't. The only time it's ever gone up mega-fast was after Katrina - due to potential shortages. (Let's not have that argument.)
If you did your own plotted study over a years time with 10 randomly selected gas stations within 10 miles of you, you would find that the gas price moves about 10-25 days after oil prices . . . actually it's about a week to 10 days after gas futures prices change. (They move independently to some extent.)
But that would be a complaint buzz-kill.