Getting gouged even harder on gas..

[Wildcard Ky]

I've done some rough math on this, and we're getting gouged harder than ever on gasoline prices.

The price of oil hit $90 per barrel today, and gas is $3.35 per gallon down the street from me.

When oil was $140, gas was about $4 per gallon. Based on those numbers, the price of a barrel of oil has dropped 36%, but the corresponding price of a gallon of gas has only dropped 17%.

 

[Selena_Kitt]

I've done some rough math on this, and we're getting gouged harder than ever on gasoline prices.

The price of oil hit $90 per barrel today, and gas is $3.35 per gallon down the street from me.

When oil was $140, gas was about $4 per gallon. Based on those numbers, the price of a barrel of oil has dropped 36%, but the corresponding price of a gallon of gas has only dropped 17%.

Yeah, I know. And everyone's excited it's getting close to $3 a gallon!? FEH!

 

[Belegon]

I've done some rough math on this, and we're getting gouged harder than ever on gasoline prices.

The price of oil hit $90 per barrel today, and gas is $3.35 per gallon down the street from me.

When oil was $140, gas was about $4 per gallon. Based on those numbers, the price of a barrel of oil has dropped 36%, but the corresponding price of a gallon of gas has only dropped 17%.

Certainly this doesn't surprise you though?

It simply follows a long established pattern.

 

[Selena_Kitt]

Certainly this doesn't surprise you though?

It simply follows a long established pattern.

No... but it's maddening.

 

[Belegon]

No... but it's maddening.

And is a perfect example of why the entire concept of trickle down economics is fundamentally flawed.

 

[Wildcard Ky]

No... but it's maddening.

It is maddening. We're completely at the mercy of a conglomerate of corporate greed. Gas is something that we all need every day, so no one is insulated from it.

I'm normally a free market kind of person, but I'm getting to the point that I'd just about take complete regulation of the oil market.

 

[trysail]

First off, Hurricane Ike shut down about 20% of domestic refining capacity for at least a week. Secondly, the Colonial pipeline
( http://en.wikipedia.org/wiki/Colonial_Pipeline ) suffered a leak last week that necessitated that it be closed to effect repairs. These two problems have created retail supply problems in the Southeast. Lastly, retailers ( don't forget that the vast majority of service stations are now owned by independent dealers ) are always slow to lower prices— they're trying to recover the higher cost inventory that's in their underground tanks. You'll see lower prices; they're on the way.

The refiners aren't making much dough. The 3-2-1 crack spread is down to $4.49/barrel, well off its highs (it got up to $17+/bbl. in early September). http://futuresource.quote.com/chart...(14*HO)-CL&o=&a=D&z=800x550&d=LOW&b=CANDLE&st

$88.18 Nymex Crude Future ($/bbl.)
$2.10 Nymex Crude Future ($/gal.) =$3.33 Retail ($/gal.)
$2.48 Nymex Heating Oil ($/gal.)
$104.29 Nymex Heating Oil ($/bbl.)
$2.07 Nymex RBOB Gasoline Future ($/gal.) =$2.70 Retail ($/gal.)
$86.87 Nymex RBOB Gasoline Future ($/bbl.)

Thus,
3-2-1 Crack Spread:
$4.49

http://en.wikipedia.org/wiki/Crack_spread

 

[TE999]

Prices are already dropping here. Shell and Hess stations are in a price war of sorts...regular's about $3.20 US gal. and falling. Last week it was $3.65!

 

[Weird Harold]

We're completely at the mercy of a conglomerate of corporate greed. Gas is something that we all need every day, so no one is insulated from it.

No we're not completely at the mercy of Big Oil. Whatever kind of vehicle you own, google up that vehicle and "alternate fuel conversions" -- there is at minimum an EPA certified conversion "kits" for propane, compressed natural gas and ethanol for YOUR vehicle (unless you're like me and are still driving a pre-1991 vehicle.)

It's probably between $2,000 and $5,000 to convert your vehicle to the alternative fuel most available in your location, but it's much cheaper than buying a new electric or hybrid and it's probably within the credit limit of most people's cards.

It's NOT cheap; it's not particularly convenient; and it's definitely not cost effective for most people, but the option to thumb your nose at BIG oil and become a dependent of of a natural gas or propane provider is there -- and if you own enough cows to fill a couple of methane digesters, you can be completely fossil fuel free with the CNG conversion for your car by running on methane.

 

[kendo1]

Petrol over here has dropped to about £6.15 in Edinburgh. That's about $11 a gallon.

 

[trysail]

Gasoline May Fall Below $3 a Gallon on Slowing Demand, Economy
By Barbara Powell

Oct. 7 (Bloomberg) -- U.S. gasoline pump prices may fall below $3 a gallon for the first time in almost a year because of declining crude oil costs and collapsing demand.

Retail prices may fall as low as $2.70 a gallon by the end of November from about $3.50 a gallon on average nationwide now, said Dominick Chirichella, a senior partner at the Energy Management Institute in New York, a consulting company. U.S. gasoline demand is the lowest since September 2005, and the number of miles driven by Americans this year may fall for the first time since 1980, according to the Federal Highway Administration.

Crude oil tumbled 40 percent from its July 11 record of $147.27 a barrel as the U.S. credit crisis deepened. U.S. gasoline slid just 15 percent in that time, as hurricanes Gustav and Ike shut Gulf Coast refineries and inventories fell to a 41-year low of 179 million barrels, government data show. All refineries but two have returned to service, a sign supplies will increase.

``Retail prices will come down as cheaper gas starts trickling through the system,'' said Sander Cohan, a consultant with Energy Security Analysis Inc. in Wakefield, Massachusetts.

Gasoline futures fell 7.6 percent yesterday to $2.0591 a gallon on the New York Mercantile Exchange, down 43 percent from the record high of $3.631 on July 11. November crude oil declined 6.5 percent to $87.81 a barrel. Gasoline and crude oil have a 97 percent correlation, with 100 percent meaning they move completely in tandem, data compiled by Bloomberg show.

Regular gasoline at the pump, averaged nationwide, fell 2 cents to $3.504 a gallon, AAA, the nation's biggest motoring group, said yesterday on its Web site. That is the lowest since April 20. The price peaked at $4.114 a gallon on July 17.

Production Loss

Record retail prices have helped drive down demand, which in the week ended Sept. 26 was the lowest since Hurricane Katrina struck the Gulf Coast in 2005.

``The retail margins are suddenly astronomical and the big box retailers like Costco and big chains like Road Runner are going to lead the market down'' by cutting fuel prices, Chirichella said.

The Energy Information Administration will lower its gasoline price projections in its monthly forecast today, said Doug MacIntyre, senior oil market analyst. The department forecast Sept. 9 that regular gasoline would average $3.66 a gallon in October, $3.71 in November and $3.74 in December.

The new projection, while lower, won't reflect the recent decline in gasoline futures, because the market has fallen too quickly to be reflected in a monthly forecast, he said.

``How low prices may go is still an open question,'' MacIntyre said. ``If we've learned anything about forecasting prices this year, you probably should never use the phrase `far fetched' about any projection.''

Shortages Ease

The U.S. lost 20 percent of production from Hurricane Ike, which struck the Texas coast Sept. 13 less than two weeks after Hurricane Gustav made landfall in Louisiana. Fourteen refineries representing 3.8 million barrels of daily production were closed. Two of 32 Gulf Coast refineries remain shut and nine others are at reduced rates.

Spot shortages of gasoline from Texas to Ohio after Hurricane Ike kept a floor under prices. Those shortages are easing as refineries resume production.

``But it's not like consumers are just going to hop back into their cars now as prices fall, because they've got all these other issues with the financial system in turmoil,'' said Andy Lipow, president of Lipow Oil Associates LLC, a consulting company based in Houston. Within the next two weeks, gasoline will be at $3.30 before declining to $3 a gallon a month later, Lipow said.

To be sure, crude oil is more expensive than gasoline for delivery in the next four months, meaning refiners risk losing money on every gallon they make. November crude on the Nymex costs $2.14 a gallon, while gasoline futures sell for $2.09.

Prices will also drop because winter-grade gasoline is 10 cents a gallon cheaper to produce, and as motor fuel demand slides because of the colder temperatures and the deteriorating economy.

``Supply anxiety was keeping a floor under prices, and once those anxieties subside, we're back to downward pressure from slow demand, and prices will continue to fall,'' Cohan said.

 

[JAMESBJOHNSON]

TRYSAIL

Retailers get deliveries of gasoline every day. The storage tanks are depleted quickly. So they dont generally have any 'old' stocks of gasoline.

Retailers price their gasoline according to what their competition charges. Managers canvass the neighborhood, checking gas prices, then alter their own prices...maybe. The real reason prices remain high is to discourage drivers from waiting for prices to fall more. When people expect prices to drop they tend to delay buying. So retailers keep the prices high until competition forces a change.

 

[The_Trouvere]

It is maddening. We're completely at the mercy of a conglomerate of corporate greed. Gas is something that we all need every day, so no one is insulated from it.

I'm normally a free market kind of person, but I'm getting to the point that I'd just about take complete regulation of the oil market.

I do not have a car. I walk or ride a bicycle wherever I go. A year's supply of bicycle oil costs about $8.00. Come to think of it, I better buy more before the price shoots up to $9.00.

The price of gasoline will fluctuate, but the trend will be upward, and there is little the government can do about it. Alternatives to oil, like hydrogen, and electricity, will not be economically competitive with gasoline for years, perhaps decades. Americans are going to have to learn to become less dependent on automobile transportation. For some Americans, it will be a painful and costly lesson.

Meanwhile, I am glad that Americans are getting angry at the oil companies. I want the electorate to dislike the corporate establishment in general, and to look to the government and the Democrat Party for solutions.

 

[dr_mabeuse]

I may be a total idiot but I don't think there's a linear relationship between the price of a barrel of oil and the price of a gallon of gas these days.

 

[kendo1]

One thing that I think will never happen again - supersonic transport.

When Concord was flying it cost $25000 to fill the tanks, nowadays it would cost about $100000.

 

[sutherngent985]

One thing that I think will never happen again - supersonic transport.

When Concord was flying it cost $25000 to fill the tanks, nowadays it would cost about $100000.

Thats what people dont realize about aviation. Take a 747, loaded with fuel. A plane like that will hold about 360,000 lbs of fuel. Thats about 51400 gallons at 7 lbs/gal. Jet fuel will run something in the neighborhood of $4 to $5/gal. Using $4, thats over $205,000, and that just fuel. Not counting all the other stuff a 747 needs for a flight from say New York to Tokyo...food, etc, etc. And people wonder why airlines are struggling. I know most airlines probably pay less than that for fuel, just an example.

Oh, BTW. Coming home today, I saw gas here had gone down...to $3.07. Thats in Nebraska.