What’s that up my butt you ask? It’s just an oil barrel and a gas nozel
NOPE, no one is gouging customers…nope, nuh-uh, not at all…
Oil has been trending lower since the end of July and is down about $34, or 23%, from its all-time high. ( July third or so was the record…Oil surges to new highs above $145 a barrel; US pump prices at record near $4.10 a gallon
Gas prices remain more than a dollar higher than where they were 12 months ago. However, the average price of retail gas in the United States has fallen more than 8% to $3.787 gallon at the pump over the past 27 days, according to motorist group AAA.
Hmmm, my dog and I just put our brains together and using dog treats as a way to count we figured out Since oil has fallen 23% – gas has fallen 8% = a 15% F job. Roscoe doesn’t like being f’d either he wasn’t happy to see his treats go back in the box.
I thought I heard somewhere that oil takes 6 weeks to hit the market as gas. Stick with me now. We came off our “high” at the beginning of July. July by my last count has 31 days. Or about 4.4 weeks in it. And August has 31 days right? So (picture pulling of socks, tongue partially out of my mouth, looking up in the air with my one hand scratching my head and the other holding my middle toe, looking perplexed)
SooooooRight about TODAY from our all time high in July our gas prices should still be going up right?
But, But, But if they are going down now? Then, well, then, that means, we are being lied too…NOOOOOOOOO.
I just paid $3.56 / gal. That’s a pretty significant drop from where it was a month ago.
Oil peaked on July 7th, not 1st. The cost of gas includes transportation of it, and refining it. These costs are on top of the ‘barrel cost’.
A barrel is 50 gallons of gas. A barrel dropping $34 comes to a reduction of 68 cents a gallon. If it peaked at $4.16 a gallon, it should come down to about $3.48 a gallon. I saw it today at $3.56 a gallon at the Sunoco in Newark on Elkton Road. That’s pretty close.
It sounds like you may have enough for more doggie treats this month than last.
Pbambach – Don’t confuse DBB with facts.
that’s 10% mike. Not a 20% drop like in oil prices. Where is the correlation was my point.
mike, it is really desperate how you leap onto others comments to make friends.
And it’s really desperate DBB how you jump on me rather than attempt to discredit the merits of arguments.
PB, where did I say it peaked on the first. Regardless I said nothing about the “cost” if you didn’t read closely. I talked about the TIME it takes to hit the market. I have heard six weeks.
using your July 7th date then. Gas Prices should still be rising based on the 6 week oil to gas time frame was my point and since they aren’t I was also saying we are being gouged.
be patient mike, I take one person at a time
And there is not a 1 for 1 correlation between crude oil pricing and gasoline pricing. The current spot price for gas is 3.13. Add in the overhead for transportation, handler’s and retailer’s profits and all of the taxes and you are close to 3.60, 3.65 I think.
So we’re being gouged because gas prices aren’t rising…… great logic there DBB.
And Cassandra, that’s right about the prices we’re seeing right now.
DBB–I indeed misunderstood your question–if there is a 6-week lag, then gas prices today should reflect oil prices from late June, which were near-peak. The decline in gas prices over the past four weeks appears to discredit the 6-week conventional wisdom of being tied to the four week change in oil prices during June (the period 6 weeks earlier).
My conclusion–yep, you’re right. I believe that the 6-week lag is an average, and an average that was not at all in evidence in the past two months’ actual prices.
Oil (and gas) prices are affected by many, many factors, both real and emotional. It could be that the high oil prices from late June/early July were viewed as extravagant by gas delivery firms, and that they refused to buy at those prices (and preferred to work down their inventory rather than pa $140 a gallon), and that as this ‘extravagant price’ thesis was proven in later July, they were able to replenish their declined inventories at lower oil prices, and were able to pass that through more quickly at the pump.
But really, who knows?
I think that we need your dog to post next!
Woof bowowo grr snarl yipyp. Grr grr whine yip snarl bark fuckin bark bowowowow. Arrroooo sniff sniff bark woof bow grr.
Bark.
thanks PBB. that was all I’m saying.
tell the 2 year old hanging on to your coat tails his mommy is calling him for dinner
Nice – keep up with the childish personal attacks DBB – they only make you look sad and foolish.
DDB
Please don’t try to explain math to the kid he’s still playing with his gun’s.
Look down here at the beach gas dropped .25 cent’s a gallon ,However the news Journal and the Washington post each went from .50 cents to .75 cents so i am now paying .25 more for papers than gas at $.00 a gallon.
go figure
Solution – Don’t buy your daily paper TT. Especially a rag like the News Journal.
Oh, and TT – You’re just as immature as DBB. Grow up.
Just in case anyone wants to know.
High prices squeeze station owner the most. You get angry at $4.00 a gallon knowing that supply is up, refinery production is up, and that no impending crises around the world is driving up world oil. In other words, oil prices SHOULD be lower this summer than last, if we take each and every one of the excuses being made for accepting high prices as a way of life.
What is different this summer were two things. One, it is the last summer occurring during the “Oil Administration” . The business environment will never be more friendly for Big Oil… Second, a push was made to get Congress to open up Offshore Drilling, which was bravely stood down by Nancy Pelosi. The actual pump prices actually began their drop as Congress boarded their flights home. (Coincidence? Perhaps)….. Third, due to the 04 Tax package passed, there is almost zero capital gains tax this year which will apply to oil companies (as well as other mega business who supported Bush in 00)….. What these three things add up to, is the common excuse used to explain a falling stock market in times of plenty, especially at a quarter’s end……..
Profit taking.
Now back to the independent station operator…
At $4.00 a gallon being charged us, his wholesale price was $3.90….. This means that if you bought gas for your lawn mower, all he earned was 10 cents. Imagine all the work and investment he put in, to get that ten cents per gallon? And if you paid with a credit card, perhaps for the convenience of paying at the pump, the 1.5% Visa/MasterCard (Amex is 3%) fee charged him/her for the privilege of letting you use a credit card at his facility….. on that $4.00 purchase, costs him…. 6 cents….
Therefore your 25 gallon purchase gives him 25 X (10 cents – 6 cents) = $1.00, out of which he has to pay all of his expenses…… Hopefully he is making money by selling coffee, soda, SoBe’s, chips, or doing some type of automotive service on the side (now do you understand why they charge so much?)
Now, when gas goes down, under the oil industry accounting system rules, his inventory is showing, I think at today’s cost is $3.45 a gallon. Therefore any station still charging $3.70 is making twenty-five cents per gallon minus the 5.5 cents given up to your credit card company….
After sweating from May, June, through July off a dollar per fill up, and knowing that eventually he will be at that same level again, one can, and morally should, expect him to take his time in decreasing his cost to us.. I, and I certainly would expect that you… would choose to do the same….
It is not a collisional effect which causes the slower fall at the pump, but more of a consensus effect where each station operator, looking only out for his own personal best interest, accidentally colludes with all other station operators doing the same.
Now if profit were never a motive, and the greater good of society was to be put over the benefit of individual operators, one operator could drop his price immediately and customer traffic to his station, would dictate that all others do the same….
As an aside, realizing that each fill-up under normal circumstances generates only one dollar to the independent operator…., it provides great downward pressure to keep prices low…
For if you as an operator can steal 100 more people an hour from your competitor by dropping your price one penny below his…. you earned 99 dollar for yourself that hour more than you would have done otherwise….
thanks kavips.
I am just trying to point out the utter bullshit you hear time and again.
To pile on to Kavips’ point; If just one person skips out on a full tank the station owner’s meager profit has been wiped out on the previous 900 or so customers. (15 gal * $3.60 = $54. $54/$.04 = 900)
Nancy Pelosi won’t vote because she’s personally invested in “Big Wind”.
http://thelibertysphere.blogspot.com/2008/08/nan-reneges-on-her-openness-to-oil.html