Why is no one talking about gas prices dropping?

[Nathans_Dad]

I actually was thinking about it today. I filled up for $3.59!! First time I've seen that number in a long time.

Of course with a hurricane coming the prices might go back up for a bit, which is why I filled up today.

It's Bush's fault!

[Jim Richards]

Originally Posted by Nathans_Dad

It's Bush's fault!

Ha! Rick nailed it.

[jyl]

Something interesting, source Edmunds

Date, Price Per Gallon, Median Income, Pct of Income Spent on fuel
1991 $1.09 $30,126 4.9%
1995 $1.14 $34,076 4.6%
1999 $1.19 $40,696 4.0%
2003 $1.51 $43,318 4.8%
2007 $2.96 $48,201 8.4%
2008 $4.06 $48,201 11.5%

Median income growth 2.6%/yr versus gas price +7.6%/yr.

Note how weak the 2000s have been, compared to the 1990s (for median income)

[Shaun @ Tru6]

My prediction:

oil will continue to drop through the election.

if McCain wins, speculators will have no fear of regulation and bring the price back up and Phil Gramm will have holiday named after him.

if Obama wins, speculators will moderate their gains against the possibility of re-regulation. they'll keep testing the waters to see how much is too much, then dial back down a little, let the price plateau, then wait for an Event at which time they spike the price again, and again, and again.

[Mo_Gearhead]

To all the complainers: Go purchase a gas station. Instant Millionaires! Problem solved.
__________________________

The reason 'no one' (read: mainstream media) is talking about falling prices (I just paid $3.35 an hour ago) is: It doesn't fit their agenda!

SURGE WORKING? (when your candidate wants to surrender?) Shhhh quiet!

PRESIDENT CALLS FOR MORE DRILLING? (when your candidate NEEDS a pocket book issue to grab headlines?) Shhhhh quiet!

The 'empty suit' (who will lose in November) NEEDS the unwashed masses ...MAD!
Mad at EXXON! Mad at WalMart! Mad at SUV drivers! Mad at captains of industry!
Mad at bankers! Mad at Wall Street! MAD! OUTRAGED! How else does one sell
HOPE and CHANGE?

The Dem. Party is off the rails!

All very amusing.

[Mo_Gearhead]

On open letter to all the Democrats and liberals that despise …BIG OIL!

Guess who brought you to the party? Gasp! Why…Big Oil!

It runs your aircraft, cars, fishing vessels, generators, railroads, over-the-road trucks…etc. And my goodness, what our (USA) country became because of their work. They went out, found a viable commodity, retrieved it from the ground, shipped it, refined it and delivered it to you!

Now I can only imagine two or three of you on this site (you know who you are) that are ignorant enough to believe that ANYTHING will replace oil in the near future for fueling the afore mentioned groups.

How many years have we had electric cars available? How many years have we had solar panels available? How many windmills do you see? How long have scientists toyed with wave power? Want to guess how much (% of totals) these contribute to the afore mentioned groups or the electric generation in total in the USA?

So one (or all three) of you chime in ...Please! And tell all of us how soon OIL will be replaced by throwing MORE DOLLARS at these other areas.
If there were profitable/viable alternatives ...it would have ALREADY HAPPENED!

Oh ...and I really want to hear from you ‘believers’ that are convinced that BIG OIL conspired to buy up all the wind/wave/solar/battery patents to keep them off the market!

[Pazuzu]

Originally Posted by Mo_Gearhead

Now I can only imagine two or three of you on this site (you know who you are) that are ignorant enough to believe that ANYTHING will replace oil in the near future for fueling the afore mentioned groups.

Big Oil believes that...they're dumping more money into alternative energy R&D than anyone.

[jluetjen]

The price of gas has always gone up, as has the prices of everything else. In case no one ever noticed, there is a low level of inflation "built in" to our our economy. That way everyone gets raises, and feels better off then their parents. I agree with the idea of looking at the price of gas compared to some measure of income -- but going back to 1990 isn't really meaningful. If you want the comparison to be meaningful, you need to cover something closer to 100 years.

The other way to do it is to incorporate a "deflater" term in the analysis that nets out the inflation level. You can get essentially the same affect by comparing the price of some quantity of gas to the per-capita (ie: per person) Gross Domestic Product (total value of all of the goods and services created by the economy). While I agree that the price of gas has gone up since 1990, compared to when the US economy with the "strongest" in the world in the '40's and '50's, we're paying a lot less of our income per person for gas.



All of that being said, you need need to be aware of the shortfalls of using averages for this sort of stuff. For example, if you take a look at the average income by county, and the % of that income used for gas, you'll discover that chances are most of us are not using as high of a percentage of our income on gas as the original statistic suggests. This highlights a statistical concept that people need to keep in mind which is best highlighted by a little economic example about averages.

Imagine a bunch of blue-color guys sitting in a small-town bar. Economically they don't look that interesting. If Bill Gates were to walk in and order a beer, from an averaging perspective everyone in the bar is a Millionaire!

Anyhow, in the long run I do expect the price of gas to increase since it's a non-renewable form of fuel. This will force the development of other forms of energy (solar, hydro, bio, etc) which will ultimately replace oil as the energy sources for home heating, power generation and ultimately even transportation. When that happens, the demand for gas will have dropped to a point where the price of gas will stabalize most likely at a level higher then we have today. The biggest users at that point will most likely be the owners of older -- "classic" cars like we are with our air-cooled Porsches are today. Doubt that the economy will ever "run out" of gas. But what the economy will do is balance supply and demand of all forms of energy in the long run, that is unless we foul up the system by adding all sorts of artificial constraints and controls on the price of gas. The best thing that we can do is to continue to give gas an artificially high price (also known as gas taxes) to ensure that our economy develops alternative solutions faster then those economies without those price adders.

[MichiganMat]

Drop?

Must be the psychological effect of all the hot air the GOP is spouting off in Congress right now.

[cgarr]

Sigmund Freud would be proud! They got us conditioned to think anything under 4 bucks is cheap! ding,ding,ding,ding

[sammyg2]

Originally Posted by widebody911

Prices go up like a rocket, come down like a feather.

Still think there's no monkey business with energy prices?

Dude, do some research before commenting will ya?

If i buy a delivery of oil (tanker, barge, whatever) I will not receive for up to 90 days depending on where i bought it from, how much, and method of delivery. Average delivery is probably 60 days.
That does come into play. But, according to the energy information association (division of the department of energy) the wholesale spot price for regular unleaded in Los Angeles was $2.98 a gallon as of three days ago.
http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm
That's what the oil companies are selling it for. The crude oil they used to make that gallon of gas cost them about $2.80 a gallon.

We're paying around $4.15 a gallon at the pumps.
You figure about 64 cents a gallon for taxes for a total of $3.62, the rest goes to the distributor and the guy who owns the gas station.
The station owner is making at least 40 cents a gallon on regular in So Cal right now, more on premium and diesel.

If you want to put on a tin foil hat and go after a conspiracy, then talk to the guy who lives down the street and owns or runs the corner gas station. He's the one who sets his price, he's the one who jumps at an increase as quickly as he can and he's the one who reluctantly lowers his price only as much as he absolutely has to.

[sammyg2]

Originally Posted by Porsche-O-Phile

Guarantee it's going to go back up in a big way by the end of the year. They're gonna' look to stick it to all the holiday travelers. You can take that one to the bank.

I think it'll actually be relatively cheap by the end of the year, that's typically the cheapest season due to the lowst demand, People donb't like to go for long drives when it's colder than heck outside and it gets dark at 5:00.

Next spring is what scares me. If the speculators are going to pull this crap again, they'll start around march or April.
it all depends on the habits of people. if they truly change and consume less and stay that way, the prices will stay low. If people go back to burning it like it's going out of style, the price will go back up big time.

[Rot 911]

$3.44 a gallon today.

[J-P]

Originally Posted by sammyg2

Dude, do some research before commenting will ya?

If i buy a delivery of oil (tanker, barge, whatever) I will not receive for up to 90 days depending on where i bought it from, how much, and method of delivery. Average delivery is probably 60 days.
That does come into play. But, according to the energy information association (division of the department of energy) the wholesale spot price for regular unleaded in Los Angeles was $2.98 a gallon as of three days ago.
http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm
That's what the oil companies are selling it for. The crude oil they used to make that gallon of gas cost them about $2.80 a gallon.

We're paying around $4.15 a gallon at the pumps.
You figure about 64 cents a gallon for taxes for a total of $3.62, the rest goes to the distributor and the guy who owns the gas station.
The station owner is making at least 40 cents a gallon on regular in So Cal right now, more on premium and diesel.

If you want to put on a tin foil hat and go after a conspiracy, then talk to the guy who lives down the street and owns or runs the corner gas station. He's the one who sets his price, he's the one who jumps at an increase as quickly as he can and he's the one who reluctantly lowers his price only as much as he absolutely has to.

I believe the average profit nationally per gallon of gas for a station owner is actually somewhere closer to $ .10

I bet there are an awful lot of station onwers out there who would love to be making $ .40 on a gallon of gas.

As was mentioned earlier in this thread, most stations now are surviving on food, beer, drinks, tobacco and lottery tickets. Stations with food marts can lower the price of gas to almost break-even or slight-loss levels to be competitive and make it up with these other sales.

[Mule]

Originally Posted by Rick Lee

I think 30-35 cents in three weeks is pretty fast and that's coming down. It's not monkey business to base prices on what your cost of replacement is. Just because you bought it for $xx doesn't mean your mark-up is based on that. It's based on whatever it will cost you to replace your supply. Works the same way with homeowner's insurance. If they only paid you what it originally cost to buy your house, you'd be screwed. They pay the cost to replace.

When it started going up, it went at 25 cents a week. Here, it's down to 3.95 from 4.15.

[Rot 911]

Originally Posted by Mule

When it started going up, it went at 25 cents a week. Here, it's down to 3.95 from 4.15.

It went from $3.65 to $3.44 a gallon, here, in 3 days.

[MichiganMat]

Originally Posted by Kurt V

It went from $3.65 to $3.44 a gallon, here, in 3 days.

Im telling ya, its all the talk the GOP is doing during the Congressional recess, its got Exxon scared silly.

[sammyg2]

Originally Posted by J-P

I believe the average profit nationally per gallon of gas for a station owner is actually somewhere closer to $ .10

I bet there are an awful lot of station onwers out there who would love to be making $ .40 on a gallon of gas.

As was mentioned earlier in this thread, most stations now are surviving on food, beer, drinks, tobacco and lottery tickets. Stations with food marts can lower the price of gas to almost break-even or slight-loss levels to be competitive and make it up with these other sales.

I was using a detailed example of the LA area. According to the EIA, wholesale gas prices are only a few cents cheaper in other places in the country. If the retail price is less then the gas station is making less there.

[sammyg2]

Originally Posted by MichiganMat

Im telling ya, its all the talk the GOP is doing during the Congressional recess, its got Exxon scared silly.

There actually might be a tiny big of logic in that statement, if Exxonmobil actually had anything to do with setting the price. they don't and it doesn't.
Go do some research.

Or, imagine e-bay. XOM makes a whole bunch of gas and is trying to find a buyer. They offer it up for sale to the highest bidder. Someone makes an offer. they think about it for a little while. they want more but they have to sell it so they can't wait too long.
Someone else offers another penny a gallon, they sell.
That's closer to how it really works.

The refiners want to get $100 a gallon but they can't. the buyers want to but it for a penny a gallon but they can't. Somewhere in between they find a price they can both agree to.
The refiners don't have enough storage capacity to sit on the fuel for very long, they have to keep it moving so often they accept a price that is much lower than what they really want. they just get as much as they can. They have some long-term contracts that are negotiated but the majority of the gas refined in this country gets sold on the wholesale market.

[nynor]

it has dropped all of 5 cents around here. no kidding.