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I am no math wizard, just an average joe like most of you. Will some economic geek out there please explain why gas prices are still this high. Last March, when has had hit 103 a barrel, my gas stations in the area averaged 2.99 a gallon. Its 104 today, but gas is at 3.49 a gallon. I know its not going down 50 cents in the next couple days. Best I can hope for at this point is that it goes down another nickle. Whats going on,and why is it still so expensive at the supermarket. Gas has been going down for a while now. Time for some relief
We were paying 3.50 a gallon when gas had RISEN ro $121 a barrel. This ratio works out when we are going up, but goes to hell when we are on our way down.
The oil prices you see quoted are futures contracts meaning the price per barrell for orders in advance of 1,2, or 3 months. It takes time for the orders to be bought, processed (refined), and brought to market. Gasoline is a byproduct of oil and reacts to the price of oil, but also has its own pressures and futures markets. One of the big things that can affect the price of gasoline independent of oil is refinery production going offline for cleanings, repairs, or storms.
I am no math wizard, just an average joe like most of you. Will some economic geek out there please explain why gas prices are still this high. Last March, when has had hit 103 a barrel, my gas stations in the area averaged 2.99 a gallon. Its 104 today, but gas is at 3.49 a gallon. I know its not going down 50 cents in the next couple days. Best I can hope for at this point is that it goes down another nickle. Whats going on,and why is it still so expensive at the supermarket. Gas has been going down for a while now. Time for some relief
We were paying 3.50 a gallon when gas had RISEN ro $121 a barrel. This ratio works out when we are going up, but goes to hell when we are on our way down.
Simple, it is their gas. They can sell it or not, at their price.
Simple, it is their gas. They can sell it or not, at their price.
well, I thought it was their oil, but it was our refinery's. We turn it into OUR gas dont we? I don't understand why its so drastically differently priced. The Graphic is going down alot slower than it went up, I mean Dramatically.
I understand the futures market, or at least I thought I did. Its going down despite the current hurricane season. Or is that why the refinery price is artificially up, even though the OIL price is way down. Man Im so confused. The way I figure it, we are paying an average (at the pump) of about 5 cents more for ever dollar that is paid for a barrel of oil than we did 5 months ago. Except on the way down. Why has the price of the refined gas separated so far from the price of a barrel of OIL?
Here is the thing. Refiners buy oil and process it and sell it to you as gas. Right now refiners are still working off oil inventory they purchased when oil prices were much higher, so they can't just turn it into gas and sell it to you at a huge loss now can they?
If they did such a thing, how would they make any money?
Here is the thing. Refiners buy oil and process it and sell it to you as gas. Right now refiners are still working off oil inventory they purchased when oil prices were much higher, so they can't just turn it into gas and sell it to you at a huge loss now can they?
If they did such a thing, how would they make any money?
Not only that, but refiners are not making much money at all with the higher prices.
Refining and retail sales of gasoline were MUCH more profitable when oil was $10 per barrel than it is when oil is $100 per barrel. Back when it was $10 per barrel, gasoline cost something like $0.90 a gallon.
Refiners are barely scraping by at today's oil prices, which is why Exxon and the others are trying to get out of the game.
Here is the thing. Refiners buy oil and process it and sell it to you as gas. Right now refiners are still working off oil inventory they purchased when oil prices were much higher, so they can't just turn it into gas and sell it to you at a huge loss now can they?
If they did such a thing, how would they make any money?
well howcome they didnt do that at a cheaper price when it was on its way up. I understand your point, but if they would also have the cheaper oil per barrel when they refined it back in march. Im not sure, did I miss your point?
Not only that, but refiners are not making much money at all with the higher prices.
Refining and retail sales of gasoline were MUCH more profitable when oil was $10 per barrel than it is when oil is $100 per barrel. Back when it was $10 per barrel, gasoline cost something like $0.90 a gallon.
Refiners are barely scraping by at today's oil prices, which is why Exxon and the others are trying to get out of the game.
Interesting. So maybe its higher so that the refinery can recupe the loss? I thought Exxon was making billions of dollars in profit?
well howcome they didnt do that at a cheaper price when it was on its way up. I understand your point, but if they would also have the cheaper oil per barrel when they refined it back in march. Im not sure, did I miss your point?
They raise prices faster to cover the cost of the next (more expensive delivery). They have to do that, otherwise they'd have to go into debt until the customers bought up all the gas. Prices have to go up faster than they come down, otherwise, station owners and refiners wouldn't be able to pay their bills.
They raise prices faster to cover the cost of the next (more expensive delivery). They have to do that, otherwise they'd have to go into debt until the customers bought up all the gas. Prices have to go up faster than they come down, otherwise, station owners and refiners wouldn't be able to pay their bills.
oh, well makes sense, except, how were station owners able to stay alive when prices were rising. I mean if they were charging 4.15 per gallon, making about 3 cents a gallon, how did they survive when the next shipment cost them 4.21 a few days later. It seems like the stations would have to anticipate it going up and artificially bring prices up just for insurance that they could open the doors the following week. Im thinking, on the way down now, maybe they have crated a little breathing room. what do you think?
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