21 total posts
That's awfully cheap
Up here in New England the norm is 2.15-2.19. But you have to realize that adjusted for inflation the price of gas is still not as high as it was during the Arab Oil Embargo crisis of the Ford/Carter days.
As far as being in line with European prices, I don't see a connection. That has more to do with tax policy than the actual price of oil or gas.
And yes, it's the markets not the oil producers per se.
$0.90/litre here in MB, Canada
which makes it about $3.40/U.S gallon.
(NT) $2.04 in southern NJ today
Is it the folks/countries who own the oil wells who are setting the price of crude, or is it those 'crazy' people who scream and hollar on the floor of the futures market ?
It's neither, Mac. Federal law states that pump prices are set as of the wholesake price of gasoline as of the last delivery the station took. So, if a station took a delivery that allows them to sell the fuel at $2.05, that's what is charged. If the next delivery comes out to a retail price of $1.95, then that's what the price becomes.
The intent is to prevent stations from making "excessive profit" or engaging in "anticompetitive price reductions" - whatever that means (except that the gas war is history).
It's said that over time the fluctuations even out over time to provide a "reliable" income for the station owner (whatever THAT means).
That applies to gasoline at the pump,
but in general , nothing has changed in the world that should be having this effect on oil prices. Methinks this maybe a lot of speculating going on at the markets.
There does seem to be something ...
... different going on with the wild fluctuations. I recall previous times when something or other was going on and prices slowly creeped up (or not so slowly but consistently) and took forever to come back down even long past whatever the "crisis" was. Now it's like a 20 cent swing in a week. I've been doing a fair amount of driving down to NY and always stop at the same place for gas off of 95. The price was $2.09 trip before last, it was $2.23 this past Saturday. Crazy!!
Speculation IS a factor, Duckman,...
...and most industry sources I've heard from have suggested that the degree of this speculation is in fact excessive (think "price bubble" here).
However, the undeniable fact is that demand has also greatly increased in the last 2-3 years, primarily due to the continued rapid expansion of China's economy.
Today's $60/bbl futures price (as it closed in Asian markets today) remains, in inflation-adjusted terms, about 1/3 below the highs we saw in the early 1980's. To reach those levels, crude prices would have to reach the $90/bbl range.
This is a complicated issue
While China and India have greatly increased their consumption, and the US has NOT built any more refineries in the last 20 years, I just don?t see what specifically should be causing this most current rise in the price of crude. It leads me to think that it must be speculators on Wall Street
I think you are correct
The gasoline in your tank has been bought, sold and traded long before the oil it came from was pumped from the ground. Maybe if we could make the traders actually take delivery of the products they purchase and then try to sell them, fewer "middlemen" would be skimming from oil profits. I've never been able to understand how these practices came into being.
Fed Reserver board Governor comments
Because neither the demand for nor the supply of oil responds very much to price changes in the short run, the recent unexpected rise in oil consumption together with disruptions to supply can plausibly account for much of the increase in prices. However, the sharp increases and extreme volatility of oil prices have led observers to suggest that some part of the rise in prices reflects a speculative component arising from the activities of traders in the oil markets.
How might speculation raise the price of oil? Simplifying greatly, speculative traders who expect oil to be in increasingly short supply and oil prices to rise in the future can back their hunches with their money by purchasing oil futures contracts on the commodity exchange. Oil futures contracts represent claims to oil to be delivered at a specified price and at a specified date and location in the future. If the price of oil rises as the traders expect--more precisely, if the future oil price rises above the price specified in the contract--they will be able to re-sell their claims to oil at a profit.
If many speculators share the view that oil shortages will worsen and prices will rise, then their demand for oil futures will be high and, consequently, the price of oil for future delivery will rise. Higher oil futures prices in turn affect the incentives faced by oil producers. Seeing the high price of oil for future delivery, oil producers will hold oil back from today's market, adding it to inventory for anticipated future sale. This reduction in the amount of oil available for current use will in turn cause today's price of oil to rise, an increase that can be interpreted as the speculative premium in the oil price...
Might be a little more complicated
for some of these little stores that get (the way Ive heard it) a mixture of gas from different sources.
Real price of oil
I remember pre-WW2 gas prices of 15 cents per gallon. But starting wages then were about 25 cents per hour (that is what I got at my first job after high school). Therefore, lower income people worked about 36 minutes to buy a gallon. Today, with a $5.15 minimum wage, and gas prices here averaging about $2.20, they only have to work 26 minutes to buy a gallon. So gas is actually cheaper now, in real terms, than it was 65 years ago.
On the same basis, hamburgers and bread are more expensive now, eggs, soft drinks, and beer are cheaper. It probably averages out that the true cost of living, based on how much you must work to buy things, hasn't changed all that much over the years.
haven't increased that much?
40-45 years ago, how mant hours would you have had to work to pay for:
a 3 room house
a pair of shoes
a weeks "groceries"
sneakers for 4 kids
cinema tickets+coke+popcorn+a hamburger and fries for a 6 person family
4 years of college education
a 2 hour train trip
and last but not least, a visit to a doctor which needed x-rays?
I'm surprised I havent seen news reports about Oil Companies
gouging the public during this round of gasoline inflation.
People don't fall for that baloney any more
The largest chunk you pay at the pump AFTER the oil producers (OPEC types, not Oil Companies) is TAXES! Even in the US where they are lower than most countries. It's the government doing the gouging.
And again, adjusted for inflation the price of gas is lower than it was in the 70s during the Arab Oil Embargo. People are just not feeling it.
(NT) Paid $2.07 this A.M. in Atlanta
(NT) That's why hard, Bra...\m/,,, ;-)
(NT) yep (&^^^%)/|\....
(NT) $2.35 a gallon here in Long Island NY