[SumItUp]

Supply & Demand, the Dollar, & Speculation.
The price of a barrel of crude oil has dropped below $100.00. In July, it climbed above $147/barrel.

Supply is steady. Likelihood of new sources of oil is good.
Demand is below the expected increase projected prior to this year.
The Dollar is on the rise
Speculation allows the price to be adjusted daily based on the information above.

One must first understand Supply and Demand if they want to understand the economy.

[JDUB]

IKE is really effecting the speculation right now, so next week there should be some change in prices again on oil.

[Sly Fox]

Actually Ike spiked speculation a few days ago. Now that the storm is not what many feared the speculators are smiling.

[ATrain]

Oil is down below $100/barrell for the first time in 6 months, yet gas is NOWHERE NEAR the price it was 6 months ago. I'm generally in favor a free market, and you can call me a socialist/communist or whatever, but gas needs to go back below $3 a gallon...these oil execs are saying one thing and doing another.

[JDUB]

the execs don't control everything. the futures market has some to do with it along with other factors. i don't understand it all, but I know people who work for oil companies who have told me that

[LUconn]

No, ATrain decrees that gas must be under $3 a gallon so we must force others to make it so.

[Ed Dantes]

It costs very little to manufacture a barrel of oil, something between $2 and $4, while it's being sold for $100. The $96 discrepancy comes from market fluctuations.

The price of gas is different because there are so many more elements involved with the cost. After all, you have to deal with taxes and station upkeep. The price of crude is only 73 percent of what is reflected in the price... so if a barrel of oil drops by roughly 1/3 (as it has), the price of gas at the station will drop about 25 percent.

So why haven't we seen in retreat 25 percent?

Now, from June 1st to September 15th, there is an extra step and some locales are forced to go with what's called 'special blend' of gas, which ostensibly is designed to reduce pollution. It is, of course, more expensive. Now that it's almost the fall, you should see a drop in prices soon.

And then there's the other reason... Halliburton.

[ATrain]

No, ATrain decrees that gas must be under $3 a gallon so we must force others to make it so.

[Purple Haize]

I won't disagree with the premise of the thread but I will disagree with one point and that is SUPPLY. We are talking about gasoline, not oil. US refineries are operating at 100% capacity. When several are shut down, the others are unable to make up for the shortfall in production., thus leading to lower SUPPLY.
Now if there were more refineries operating at a more manageable 80-90% of capacity, then the shut down of a few for several days would not hit as hard. But NOOOOO can't have any more of those nasty things around, thus we now have higher gas prices.
So if we had an oil pipeline starting in say......ALSAKSA with its terminus in one of the northern states like say the Dakota's, Montana, Washington St, then there wouldnt be that great a threat from Hurricanes etc. Add to that the abandon US Military bases there and you have a combination of a great solution. I THINK one of the presidential candidates suggested that

[SumItUp]

Price of a barrel dropped to $94.12 as of 5pm EST.

[SumItUp]

Price of a barrel dropped to $91.15 as of 5pm EST (Tuesday, September 16)

[Sly Fox]

The speculators are cutting their longs. It is odd to see crude dropping and gas prices rising simultaneously.

[Fumblerooskies]

Like Trading Places all over again. Danged that frozen OJ concentrate.

[01LUGrad]

Now if there were more refineries operating at a more manageable 80-90% of capacity, then the shut down of a few for several days would not hit as hard. But NOOOOO can't have any more of those nasty things around, thus we now have higher gas prices.

You've hit your head on the nail with that one. Forget offshore drilling! Build more refineries!

I wonder why no one is talking about that... Oh, yeah. Building another refinery would mean that we are not committing to developing alternative fuel sources.

[Purple Haize]

Like Trading Places all over again. Danged that frozen OJ concentrate.

And Jamie Lee Curtis as the hooker with a big heart!!

MORTIMER!!!

[Ed Dantes]

Like Trading Places all over again. Danged that frozen OJ concentrate.

I can't drink OJ. Everyone knows OJ kills.

[Ed Dantes]

Getting back on topic...

Neil Cavuto brought up an interesting point. It's true that the price of oil has gone down 33 percent in the last few months, while the price of gas has gone down only 7 percent.

But a few years ago, the price of oil was at 50 dollars at a time when the price of gas was $2.20. Oil nearly tripled that, but we didn't see $6.60 gas. Here's a wild idea, maybe the relationship between oil and gas prices aren't as strongly correlated as we think.

[ALUmnus]

Of course not, many of the built in taxes on us and the oil companies are fixed, along with fees and regulations, and I'm sure the price of refining the oil doesn't change a whole lot with the change in price of a barrel of crude.

[SumItUp]

Getting back on topic...

Neil Cavuto brought up an interesting point. It's true that the price of oil has gone down 33 percent in the last few months, while the price of gas has gone down only 7 percent.

But a few years ago, the price of oil was at 50 dollars at a time when the price of gas was $2.20. Oil nearly tripled that, but we didn't see $6.60 gas. Here's a wild idea, maybe the relationship between oil and gas prices aren't as strongly correlated as we think.

It is an interesting point, but the two are still related closely. The base price is higher because it is made up of different elements including flat rate gas taxes, delivery, and business expenses. Delivery costs will increase as the price of oil increases, but generally at a rate lower than the increase in the cost of oil. The current pricing is too high and the responsibility is on the retail providers of gasoline.

[RubberMallet]

I won't disagree with the premise of the thread but I will disagree with one point and that is SUPPLY. We are talking about gasoline, not oil. US refineries are operating at 100% capacity. When several are shut down, the others are unable to make up for the shortfall in production., thus leading to lower SUPPLY.
Now if there were more refineries operating at a more manageable 80-90% of capacity, then the shut down of a few for several days would not hit as hard. But NOOOOO can't have any more of those nasty things around, thus we now have higher gas prices.
So if we had an oil pipeline starting in say......ALSAKSA with its terminus in one of the northern states like say the Dakota's, Montana, Washington St, then there wouldnt be that great a threat from Hurricanes etc. Add to that the abandon US Military bases there and you have a combination of a great solution. I THINK one of the presidential candidates suggested that

per my father in law who is in the biz (his company builds refineries) says the problem is that refineries are NOT operating at full capacity and should be. he also said there needs to be more.

[Sly Fox]

I bet I can guess who your father-in-law works for, Mallet. If he has any connections to the CX department there see if he can swing my firm a contract.

[RubberMallet]

haha. people are always like "hard to find work then huh? since we haven't built one since 76" and i basically tell them, well when regulations change almost quarterly there is always work to be done and expanding to be done as well. its cheap as far as COGS go on creating gasoline but overhead starts to add up year after year.

[SumItUp]

The price of a barrel of oil spiked a few weeks ago above $100.00/ barrel and is currently at $87.50. This change has primarily been due to the strength of the dollar. The dollar has stabilized as the Euro and other currencies have had their difficulties.

Gas prices in our area have been below $3.00 for the last week. What prices are you seeing in your areas?

[ATrain]

Below $3 in Farmville and Richmond,
$3.29 in Lynchburg

[TDDance234]

We're at $3.29 in Parkersburg, WV. It's dropped almost .40 cents since I last filled up.