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And yet gas is still over $3 a gallon. Funny that...
by varelse 11y ago
And yet gas is still over $3 a gallon. Funny that...
- ryanmarsh 11y agoContracts. That'll change.
- cpncrunch 11y agoAlso it tends to increase in price in summer.
- droffel 11y agoWell, gasoline production consumes oil, which means that the price should theoretically lag behind oil's price for a period of time at least equal to the time it takes to go from crude to a final product. In addition, most gas stations will buy gasoline futures a few months out to stabilize their costs, and when oil price falls, the cost of the underlying gas purchased is still at the negotiated futures contract price. So it makes sense that the price wouldn't fall in tandem with crude prices.
- deleted 11y ago[deleted]
- murbard2 11y agoThe fact that they are hedged doesn't change much unless they are all hedged. If some of them aren't hedged, they will drive the price down, forcing the other stations to sell their inventory at a loss.
- jsprogrammer 11y ago>In addition, most gas stations will buy gasoline futures a few months out to stabilize their costs, and when oil price falls, the cost of the underlying gas purchased is still at the negotiated futures contract price. So it makes sense that the price wouldn't fall in tandem with crude prices. Only if the gas station is speculating and trying to arbitrage the market. Otherwise, they would reduce the price to reflect the updated price of the underlying futures.
- ExxEmmEff 11y agoThing is, most people in the States still have day jobs that they commute to. Demand for gas hasn't really gone anywhere. Meanwhile, for the first time in... Forever, diesel is cheaper then gasoline. [1] [1] http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm
- douche 11y agoFor a long time, diesel was cheaper than gasoline. It's only been the last 10-15 years that diesel has been more expensive.
- dingaling 11y agoIndeed, here's a breifing paper for the UK House of Commons that discusses the price relationships: http://www.parliament.uk/briefing-papers/SN04712.pdf http://www.parliament.uk/briefing-papers/SN04712.pdf Basically demand is the driver of prices, with diesel engines becoming more popular year-on-year but the refineries unable / unwilling to commit more production to diesel because that leaves them with a surplus of less-desirable products from the refining process, too. The result is that the UK imports diesel and exports petrol.
- swr 11y agoAt least in the U.S. - there have been some refinery outages as well most of the country is still on summer mix, so the supply of gas is more constrained.
- macintux 11y agoThe BP refinery outage here in Indiana is causing a major crimp in gasoline supplies.
- rhino369 11y agoSummer is peak demand for gasoline and puts refiners near peak production. Any unscheduled offline time can keep prices high. A refinery in Indiana sent Midwest prices going up, for example. If the refinery production is the limiting factor, oil could be free and it might not lower gas prices in the short term.
- saryant 11y agoThe US can export refined crude products but not crude itself, so there's more potential demand for refined products like gasoline.
- protomyth 11y agoMN had a refinery problem so depending on your area of the country, barrel price might not be a determining factor. Diesel in ND is cheaper than gas. Now, if we could standardize on one gas formula for the entire US, things might go better.
- deleted 11y ago[deleted]
- theklub 11y ago2.30 here. Feels like 1999.
- sirkneeland 11y agoWhere is "here"?
- intopieces 11y ago1999? Where did you live back then? I remember gas spiking to $1.99 on 9/11. $2.30 would have made our eyes water.
- LoneWolf 11y agoSame thing here in Portugal, when the price rises the excuses are the oil price, but then the opposite never happens.