Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Oil and Gas
Old 09-29-2008, 02:28 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,288
Oil and Gas

Oil prices experienced the biggest runup in our lifetimes (maybe in history). Gas prices doubled from approx $2 to around $4 per gallon (in Texas).

Can someone answer me this?

How come now that oil prices are ALL THE WAY back down to pre runup levels which nobody thought would hapen anytime soon, gas is still at $3.50 and higher and not back down to $2 per gallon or so which is where they were pre runup?

And why arent we screaming mad about it?
utrecht is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-29-2008, 02:31 PM   #2
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 197
Oil is the majority of the cost of gasoline, but only part. The oil must be refined first. With the recent hurricane (Gustav) the refining capacity has been strained so even though oil is cheaper, there is less supply of gasoline due to the reduced refining capacity.
RedHawk is offline   Reply With Quote
Old 09-29-2008, 02:35 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by utrecht View Post
And why arent we screaming mad about it?
Hey, we're mad, we're mad, it's just hard to keep track of all the things that we are mad about. You'll have to take a number.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 09-29-2008, 02:39 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by utrecht View Post
Oil prices experienced the biggest runup in our lifetimes (maybe in history). Gas prices doubled from approx $2 to around $4 per gallon (in Texas).

Can someone answer me this?
Because "they" can get $3.50 - $4.00 per gallon from us?

Remember, while cost is one factor in pricing..... What the rubes are willing to pay is the real determiner.

Being screaming mad about it will do nothing. We have to NOT BUY IT so as to reduce aggregate demand to the point where the sellers would actually make more total profit by lowering price. If you were selling gasoline today, would you lower price if volume was staying up at the higher price?

We're kinda screwed until we (world aggregate demand) start using significantly less. The sellers understand the shape of the demand curve and right now it's pretty inelastic. Frankly, I'm surprised they're not raising prices more. They haven't hit the point yet where consumption takes a radical drop.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 09-29-2008, 02:48 PM   #5
Full time employment: Posting here.
 
Join Date: Oct 2002
Posts: 717
Why does a dog lick itself?


Pssst: Water is next.
__________________
Random Reinforcement is Highly Addictive.
riskadverse is offline   Reply With Quote
Old 09-29-2008, 02:49 PM   #6
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
Quote:
Originally Posted by utrecht View Post
Oil prices experienced the biggest runup in our lifetimes (maybe in history). Gas prices doubled from approx $2 to around $4 per gallon (in Texas).

Can someone answer me this?

How come now that oil prices are ALL THE WAY back down to pre runup levels which nobody thought would hapen anytime soon, gas is still at $3.50 and higher and not back down to $2 per gallon or so which is where they were pre runup?

And why arent we screaming mad about it?
Gasoline prices actually lagged behind the increase in crude. The chart below shows the lag. Refiners were operating on a more narrow crack spread as time went on. Some of them actually were losing money on gasoline refining. Now that oil is going down they are dragging their feet to try and get the crack spread back in line.


Also, Ike damaged some refineries and there has been a drop in capacity until all of those problems are resolved. You may have noticed news stories from the southeast (the other end of the pipelines) where stations are running out of gasoline.
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Old 09-29-2008, 03:03 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,746
I'm in the southeast, and we are seeing higher prices, than, say the northeast. NYMEX is quoting prices that have dropped over a dollar from their highs over the past few months. Our pump prices have gone down perhaps $0.15 from their highs. But we get gas from Colonial Pipeline's pipe that runs from the Gulf up to Greensboro NC I believe. So we aren't getting that cheap NYC gas. We are paying scarcity prices for Gulf gas. Some stations still don't have gas, but it isn't quite as bad as up in Atlanta or down in Charlotte or Nashville.
FUEGO is offline   Reply With Quote
Old 09-29-2008, 03:06 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
http://www.early-retirement.org/foru...led-38220.html

http://www.early-retirement.org/foru...0&postcount=44
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 09-29-2008, 03:12 PM   #9
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
The only thing I made money on today were my oil shorts and my long dollar trades. I wonder how far this oil thing will unwind. More importantly, I wonder what the next big manipulative play will be.

Oh, doesn't this make me feel better about all of those posts on oil speculation in the last couple of years:
Quote:
"We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down," said Michael Masters of Masters Capital Management, calling the amount of money moving into oil futures markets by large institutional investors in the early part of the year "way off the scale."
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Old 09-29-2008, 09:52 PM   #10
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
Quote:
Originally Posted by FUEGO View Post
I'm in the southeast, and we are seeing higher prices, than, say the northeast. NYMEX is quoting prices that have dropped over a dollar from their highs over the past few months. Our pump prices have gone down perhaps $0.15 from their highs. But we get gas from Colonial Pipeline's pipe that runs from the Gulf up to Greensboro NC I believe. So we aren't getting that cheap NYC gas. We are paying scarcity prices for Gulf gas. Some stations still don't have gas, but it isn't quite as bad as up in Atlanta or down in Charlotte or Nashville.
I hate to add to the bad news, but I heard tonight that when the refineries are all back on line, it will take 1-2 weeks for the normal flow of gasoline to resume at the other end. According to the story I heard, gasoline in the pipeline moves at about 2-3 MPH and it will take a while for the increase to be felt at the other end.
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Old 10-01-2008, 06:24 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
you may find this link interesting
Gas Prices - MSN Autos

enter your zip code or another zip code of interest to compare prices in the US.
if you scroll all the way down, you will see the lowest and highest prices in the country, and an average.

Healy AK "wins" today at $5.21 per gallon.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 10-01-2008, 06:43 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
Quote:
Originally Posted by Leonidas View Post
The only thing I made money on today were my oil shorts and my long dollar trades. I wonder how far this oil thing will unwind. More importantly, I wonder what the next big manipulative play will be.

Oh, doesn't this make me feel better about all of those posts on oil speculation in the last couple of years:
and the failure of the bailout crushed oil prices that day. i wonder how many hedge funds were long oil and were crushed in a moment of disbelief
al_bundy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Gas/Oil Mixture in Car TromboneAl Other topics 23 07-02-2008 01:17 AM
Switch from heating oil to natural gas? Gumby Other topics 17 10-17-2007 05:56 AM
Handy Glossary of Oil and Gas Terminology haha FIRE and Money 3 01-29-2007 07:09 PM
Oil / Gas price. Supply and demand. Sam Other topics 62 12-06-2006 09:32 PM
Oil Company Profits and High Gas Prices TromboneAl Other topics 11 04-18-2006 10:21 AM

» Quick Links

 
All times are GMT -6. The time now is 05:10 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.