Falling gas prices: Coincidence?
 

I find it odd that immediately after oil companies released their earnings numbers that the cost of gas has fallen sharply. Is this coincedental, or did they do it on purpose fearing a backlash and possible action from the Government?

Thoughts?

CA DOE websites shows that the cost and profits in the refinery area peaked and subsided in about a 2 week time period. However, once the price went up, the retailers have been making about $0.30-$0.40 per gallon instead of the "normal" $0.05-$0.15 per gallon. This has been going on for over a month.

http://www.energy.ca.gov/gasoline/margins/index.html

I paid $2.049 yesterday. A month ago it was $1.00 more. I call BS!!

Just think if you went to your Porsche dealership a month ago and they told you a 911 was $75000 and today they are $50000.

E

My local Exxon is actually cheaper than the Valero right next to it.

1st time I've EVER seen that.

I think it's more "coincidence" that the prices are falling conveniently while oil company execs are appearing before Congress. Make no mistake about it - there's nothing whatsoever coincidental about it. These guys will get some tongue-lashing and that's it. Once the hearings are over and no real ramifications of the recent gouging occur, there will be a spike back up. I guarantee it. In fact, I'm so sure of it, I'm buying put options on petroleum.

The retailers are Franchises, basically, marketing groups. McDonalds are the same way. Most are independantly owned, or are owned by a local food service corp, not owned by McDonalds.

What you see as the "face" of corporate America (retail gasoline) is actually a small business owner.

still close to $3/gal in LA

"The only way to fix it is to flush it all away"

;)

Actually a lot of stations are still corporate-owned and the prices for those are set by the companies directly. Even with regards to the independent-owned ones, they simply have to respond to the prices the oil suppliers charge and pass it on to make a modest profit. No question the oil companies were (and argueably still are) gouging. None whatsoever.

Falling prices indeed. Any large hurricanes halting gulf production, refining or transportation lately?

Congress recently stepped outside usual procedures to pass an energy bill that relaxed environmental and safety requirements on refineries, to shouts of "Shame!" by Democratic members. Some folks here are still fooled into concluding that these requirements were the reason why oil companies failed to invest in refining infrastructure. Ignoring the plain observation that this decision has led, now REALLY is leading, to massive financial gain.

We whine about taxes while the oil companies take the biggest chunk of our income. I hope the Sleeping Giant awakens during my lifetime.

That must be for 91 right Todd? Filled up truck last night and 87 was $2.54/gal.

The prices are falling in L.A., but slowly and behind the trend of the rest of the U.S. This is one of their biggest markets and they need to squeeze it for everything possible.

Oil companies sell more fuel in Los Angeles county then they do in several states.

I love that song!!

Interesting though, I think the tax on gas amounts to about $.40 per gallon...funny how Congress isn't talking about cutting their gas taxes.

Simpletons need simple reasons...

And idiots complicate simple things.

[Facetious]
The oil companies are as bad as EBay - the way Ebay jacks up the prices on everything. Grrrr.
[/Facetious]
"But Ebay doesn't set the price of anything, the people who buy stuff on Ebay do."
Exactly.
Sorry, that wasn't very kind. A kinder gentler response would be:
Oil is sold on a market (similar to EBay) and the bidder's set the prices. All the oil company can do (legally) is restrict production - and hope that all the other oil companies do too - so the supply will be smaller and prices will rise.
-Chris

It isn't a matter of kindness, it's just a false analogy. A small number of huge multi-national corporations control the supply of oil. Ebay is about as close to pure capitalism as you can get, the oil business is as far away.

For those companies to profit from their monopoly they would have to engage in (illegal) price fixing i.e. get together and agree to only sell so much (like OPEC did) or agree to only sell at a certain price.

Archer Daniels Midland (ADM - "Supermarket to the World") attempted something like that with other companies so I suppose its possible that the oil companies have done it.

I think it is more likely that it is just the law of supply and demand at work. For example, California has a different gas "formula" than other states so its gas prices are going to be based on the supply of the "CA only" gas coming out of refineries.
Using the same formula for several states would increase the pool of available gas sources and probably drop the price some.

If you want to blame someone for the high gas prices blame oil man George B. Oh I don't know why, but it make me feel better. :D

-Chris