Post by: wmenorr67 on July 08, 2005, 08:03:50 AM
Post by: Guest on July 08, 2005, 08:17:25 AM
I figure b/t just basic marketing ( supply and demand) and the London bombings - price went up.
I recall 9/11 and trying to get home, the long gas lines and price gouging that went on.
Post by: onions! on July 08, 2005, 08:47:47 AM
I thought that we went to War in Iraq for cheap oil?
Post by: mtnbkr on July 08, 2005, 08:51:27 AM
Chris
Post by: cfabe on July 08, 2005, 10:38:26 AM
Post by: J.J. on July 08, 2005, 10:40:13 AM
A large combination of things can lead to the price increases.
-The oil futures have been sky high of late. This leads to the price per barrel raising
-Things like the tropical storms and Hurricanes can cause it. They impact the oil refineries and shipment of oil to and from. The off shore oil platforms need to be evacuated. A number of oil refineries are located in the gulf.
Which leads to the next point.
- No major oil refineries have been built in the U.S. for what 30 years? But closing of old ones has taken place.
- The U.S. is dependant on foreign oil because environmentalists won't let us (U.S.) produce oil. We have plenty but its increasingly hard to explore new areas. California Coast, Florida Coast, Alaska etc.
-It is the peak of the summer which just like the peak of the winter has an increased use for oil/natural gas etc. So that jumps prices up.
- OPEC wants more money so they may roll back production thus causing the price per barrel of oil to rise. But not as much as the other reasons.
- Last, oil is traded on like a stock so what effects stock prices can effect oil prices
I hope those are satisfactory reasons its all I can think of currently.
Forgot to add. Evacuating the rigs leads to a shortage of new oil. So prices go up accordingly.
Post by: Lennyjoe on July 08, 2005, 11:00:22 AM
Post by: Preacherman on July 08, 2005, 02:09:50 PM
Say you're a gas station owner. You filled your tanks last week at a given price, and have been selling your gas at retail for $2.10 per gallon. This week, you know that a hurricane is disrupting production in the Gulf, and your supplier has warned you that your next tanker full of gas will be (say) 10% more expensive due to difficulties with refinery supply. You therefore have to have the money on hand to pay for that gas, and so you increase your retail price to $2.30 a gallon. The extra money isn't so much excess profit on the tanker of gas you got last week, as it is providing for the much-more-expensive tanker of gas you'll be getting later this week.
Of course, things don't work the other way around. If you're selling gas at $2.30 now, and you're informed that your next tanker load of gas will be 10% cheaper, you can't reduce your current price, because that's covering the cost of the gas you got last week. You can (and usually market forces will ensure that you do) reduce your price on the new tanker of gas, so that you're charging enough to cover its cost plus your normal operating and profit margins.
Post by: The Rabbi on July 08, 2005, 02:13:56 PM
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Of course, things don't work the other way around. If you're selling gas at $2.30 now, and you're informed that your next tanker load of gas will be 10% cheaper, you can't reduce your current price, because that's covering the cost of the gas you got last week. You can (and usually market forces will ensure that you do) reduce your price on the new tanker of gas, so that you're charging enough to cover its cost plus your normal operating and profit margins.
Not quite. If a gas war breaks out and your competition (who gets gas at different times than you) lowers his price you will lower yours in the expectation of making it up next week on the cheaper delivery. This is apparant to anyone who has watched gas prices decline. If you didnt you would be the chump on the block trying to sell gas for 2.19 while the other guy is selling it all day long at 1.99.Gas here hit 2.23. The number itself is the only comfort I take.
Post by: brimic on July 08, 2005, 02:55:04 PM
In my state, there is a law where gas stations are required to mark the prices up by a certain minimum figure over the wholesale price. Gas prices in any area usually vary by only a few cents, competition has been almost completely regulated out
Post by: Waitone on July 09, 2005, 07:23:46 AM
Post by: Dannyboy on July 09, 2005, 09:45:01 AM
Post by: El Tejon on July 09, 2005, 09:46:45 AM
Oops, sorry, I mean how dare those eeevil companies try to make a buck! I'm brewing my own petrol!
Post by: jefnvk on July 09, 2005, 10:14:43 AM
Post by: Fatcat on July 09, 2005, 11:29:51 AM
Post by: grampster on July 09, 2005, 03:30:33 PM
I agree on the refineries. We don't have enough.
I wonder where our elected officials are, the people who are supposed to have the courage to do what is necessary for our national security and well being...er..oops, I forgot...they're too busy raising money to get re-elected and firming up their connections for post public days or their latest excursion.
Post by: Robert Sears on July 09, 2005, 06:30:24 PM
It is not an excuse it is a fact. Refineries don't keep more than a day or 2 of crude on hand and they can't just go buy any crude to run. Refineries are designed to run on only on or two types of crude. Cut off the crude the refinery shuts down. Shut down one 250,000 bbl/day refinery and somewhere around 10 million gals of product isn't there for the market, not all of which is gas. A barrel is 42 US gal and depending upon the refiery and the crude you will get less than 20 gl/bbl gas from a bbl of crude. The US uses about 21 million bbls of crude/day of which about 70% is imported. Delivery of foreign crude has probably been curtailled also by the storm. Close to 30% of the refinery capacity of the US is on the Gulf Coast between New Orleans, La and Corpus Christi,TX, so totol US production is affected. Distribution of product also takes time. Also how many extra millions of gallons of gas have been pumped in the last couple of days because of the storm that would not have been pumped until today or Mon or Tues next week. The whole thing boils down tto supply and demand. Supplies go down, prices go up -- no conspiricy.
Bob
Post by: J.J. on July 09, 2005, 08:51:16 PM
Post by: matis on July 10, 2005, 01:21:27 PM
Like the saw of supply and demand? In addition to the valid points made above, high prices bring needed supplies to where they're needed. When the demand returns to normal levels, so do prices. Competition, you know.
Environmental nuts block new exploration and refineries.
The same boobs take gubmint jobs and create crippling regulations that curtail, distort, and constrict supply.
Then you complain about prices? We're lucky we have gasoline at all.
Besides, adjusted for inflation, gasoline and other fuels are cheaper now than they were in the past.
Perhaps you could direct your understandable frustration where it might do some good?
matis
Post by: The Rabbi on July 10, 2005, 03:40:31 PM
Prices send needed signals. The gummint is talking about raising CAFE standards. This is dumb as dirt. People are flocking to hybrids and other gas misers and leaving the SUVs in the showroom. Companies will achieve fuel savings without more gov't garbage and regs. It is the market.
Post by: thorn on July 10, 2005, 08:43:41 PM
Post by: Ben on July 11, 2005, 05:30:58 AM
------------------
Diet Snapple 16 oz $1.29 ........ $10.32 per gallon
Lipton Ice Tea 16 oz $1.19 ...........$9.52 per gallon
Gatorade 20 oz $1.59 ... $10.17 per gallon
Ocean Spray 16 oz $1.25 . $10.00 per gallon
Brake Fluid 12 oz $3.15 . $33.60 per gallon
Vick's Nyquil 6 oz $8.35 .... $178.13 per gallon
Pepto Bismol 4 oz $3.85 ..... $123.20 per gallon
Whiteout 7 oz $1.39 ......... .. $25.42 per gallon
Scope 1.5 oz $0.99 .......$84.48 per gallon
Evian water 9 oz $1.49..........$21.19 per gallon
Post by: garrettwc on July 11, 2005, 07:28:24 AM
I worked part time for one, for several months. Every day we did a "gas survey". Basically, one of the managers would call or drive around and look at the posted prices in the area where our store was. They then reported that back to the corporate HQ who would evaluate the numbers and send back a list of new prices adjusted up or down based on the market.
Post by: The Rabbi on July 11, 2005, 11:56:27 AM
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I worked part time for one, for several months. Every day we did a "gas survey". Basically, one of the managers would call or drive around and look at the posted prices in the area where our store was. They then reported that back to the corporate HQ who would evaluate the numbers and send back a list of new prices adjusted up or down based on the market.
How does that amount to "manipulation"?? That's called a competitive market with many buyers and sellers. It is SUPPOSED to work that way.
Post by: garrettwc on July 11, 2005, 12:21:37 PM
If our store was selling it for $1.79 and the store down the street was $1.81 we raised our prices to the higher price. Seems to me, it would be more competitive to keep selling at the lower price.
Post by: Guest on July 11, 2005, 12:47:35 PM
Quote from: mtnbkr
It's called profiteering. Any excuse to raise the prices will do...
Chris
None is needed.
Chris
Post by: The Rabbi on July 11, 2005, 02:20:03 PM
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If our store was selling it for $1.79 and the store down the street was $1.81 we raised our prices to the higher price. Seems to me, it would be more competitive to keep selling at the lower price
Obviously marketing felt they could still attract enough customers at the higher price.Gas prices are funny. People will drive down the block for gas that is 1 penny cheaper, even when they only put in 10 gallons.
If the store down the street cut its price to 1.80 you can be sure yours would too.
Post by: The Rabbi on July 11, 2005, 02:22:28 PM
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Then you complain about prices? We're lucky we have gasoline at all.
In Friedman's book he mentions that Carter was pushing for an expensive synfuels program (with massive gov't subsidies of course) otherwise we would run out of oil by 1990. They scrapped the synfuel idea and guess what? We still have plenty of oil.
Post by: Guest on July 11, 2005, 02:29:59 PM
Post by: garrettwc on July 12, 2005, 07:38:36 PM
The more I think about it, this may be capitalism in its most raw form.