Gas Prices?

[slingshot]

Been trying to understand why crude oil prices keep going down but gasoline prices have increased about $0.30 to $0.40 per gallon in the last couple of weeks?  What are your thoughts?

The reasoning that they can charge what they want obviously could come into play, but they could also double the price at the pump and there would be absolutely nothing the consumer could do about it except not drive and not go to work.

[Brad Johnson]

Crude and gasoline are traded independently.  The connection is not direct.

www.nymex.com

Brad

[Firethorn]

I heard on NPR that the refineries are taking the opportunity to get back in the black - many had been operating at a loss during the most expensive period.

[slingshot]

Refineries operated in the red during the peak of the oil price increase?  Could be...  but the oil companies that own the refineries were making their standard 8-10% return on investment.  I did notice when crude prices were peaking, that gasoline prices flattened out and it seemed that some of the increases were not being passed on to consumers.

Yes, I know that gasoline is a independantly traded commodity.  But there is a serious correlation between the price of crude and wholesale gasoline prices.  That is what the oil companies were saying all along... it's not our fault....

I defended the oil companies in terms of pricing during the staggering rise in crude prices.  As I watch the market, I am not defending them any more.  Things don't make sense.  However, I'm thankfful that gasoline prices aren't $4.00 a gallon in my area.  Fox news reported it is the result in cuts in production.  okay....  what production?  refineries?  Seasonal production of heating oil and kerosene vs the more refined gasoline?

I think some knowledgable oil folks need to be interviewed on some of the news channels to discuss this topic.

[Brad Johnson]

Yes, I know that gasoline is a independantly traded commodity.  But there is a serious correlation between the price of crude and wholesale gasoline prices.

Stop listening to NPR and start watching the markets.  They are traded seperately by individuals all over the world.  Yes, there is a loose correlation, there has to be as the products are inherently tied together, but the market still determines the value of each product seperately.

As for "passing on the savings", well, retailers will price the product at whatever the market will bear.  Eco 101.  They aren't going to pass on anything as long as people are still buying the product.

Brad

[Firethorn]

As for "passing on the savings", well, retailers will price the product at whatever the market will bear.  Eco 101.  They aren't going to pass on anything as long as people are still buying the product.

I've been seeing serious drops in propane prices in my area.

Part of the problem might be that the secondaries market is collapsing as well - gasoline is far from the only product to come from crude; it's not like you can turn a handle and produce a barrel of gasoline from a barrel of oil.  You can tinker a bit, but you're going to get a proportion of everything from propane to tar.

[Headless Thompson Gunner]

Gas and oil prices are incredibly complex.  I've been studying them on and off for years, and all I really understand is that they're incredibly complex.  It's like the old saying, the more you learn the more you realize you don't know anything.

Regular as clockwork people crop up claiming to know all about how these prices move.  Their arguments are invariably the same.  Prices are too high.  They've considered all of the relevant factors (yeah, right) and have concluded, by process of elimination, that skullduggery from the oil companies is the only possible explanation.

I wish folks could just accept that they don't know everytyhing that goes into the pump price of gas.  Just because you can't think of a reason fr prices to rise or fall doesn't mean that no reason exists.  It just means you can't figure it out.

Sorry for the rant...

[Headless Thompson Gunner]

I think some knowledgable oil folks need to be interviewed on some of the news channels to discuss this topic.

Ah yes, investigative "news" reporters.  They'll get to the bottom of this mess for sure!

[Bogie]

Just remember guys... It's all Obama's fault... Bush had gas prices dropping during and after the election, but that bad man Obama gets into office, and they go up. It's his fault!
 
(now we get to keep repeating that, over and over and over...)
 
heh, heh...
 

[HankB]

OF COURSE falling crude prices mean rising gasoline prices . . . it's the incredibly complex market, increased refining costs, independently traded commoditities markets, supply, demand, and the phase of Venus, you silly, conspiracy-minded complainers.

Now put your tinfoil hats back on and quit whining.