Wholesale prices corrected after that temporary spike, in fact they went way past corrected. Current spot price at LA is $2.57 /gallon, down 7 cents since yesterday and down 18 cents sincle last Friday.

Why?
Oil prices are falling fast. $88/bbl for WTI.
Haven't seen it that low in a while and it's trending down strong.
Brent is $91 and change.
http://www.eia.gov/

The only reason retail prices haven't fallen more is station owners are resisting, digging in their heals. As soon as some of em cave and cut prices the rest will follow if current trend continues.

So why is oil taking a dive? Demand is steady so the only logical conclusion is that supply is increasing. Someone is flooding the market.




tin foil hat time, conspiracy theory: what if the saudis offer more for sale than their quotas, driving down prices. Then they buy up their own (fake) futures, they've done that before. Plus they buy up 120 and 180 day futures from other producers through agents. Ten million bbls maybe.

Then they sit on it and wait for the excess to dry up even though no oil has actually changed hands.

A month from now when the price is back up to $100 they start slowly selling off the oil they snagged at $90, even though it was all on paper. Easy $.
If some else catches on they could ride coat tails up and back down exaggerating the swing.

Could happen.

Or it could just gradually fall all winter until rebounding in spring due to REAL market conditions. nope, too far out there.


EDIT: EIA predicts a mild winter so less demand for heating oil. that could create excess oil supply like we're seeing. so much for the tin foil hat approach.

I just paid $3.39 for 93! I can't remember the last time it was that low.

Something is going on.

Maybe ISIS is selling oil way below market.

You can thank your lawmakers for that. It's really, really expensive to run a refinery over there and when they passed new laws restricting what they could use in their heaters and boilers, that was pretty much the last straw.

Tesoro closed down their refinery on the island but someone decided to buy it (for a steal) and re-start it, I wish them luck.
Chevron wants to sell their refinery there but I'm guessing they'll end up closing it.
If both of them close, you'll be looking at $8 gal.

As I mentioned earlier, it Canadian Thanksgiving this week-end which mean standby to get screwed at the pump... Here you don't ask for Grey Poupon you ask for KY :D

I'll take a photo of the price on Thursday, Friday and Saturday and compare it to the one from Ogdensburg on Saturday for my usual UPS Store pick-up including a Fiber door for the Babe.

I'm curious as to whether the continuos increase in mpg that new cars are getting combined with the huge sales of 40 mpg Priuses is actually affecting demand in a significant way. Seems like there's no way it isn't, unless I'm missing something in the equation. Your average housewife isn't driving a full-size SUV like 10 years ago.

It is effecting the market big time, it's almost stopped growth of gasoline demand.
Increases in population and numbers of cars and numbers of miles driven (longer commutes) are just about in equilibrium with increased fuel mileage.
Betcha I couldn't speel that word again.

I heard recently a "big wig" predict a slight decrease in demand for gasoline over the next decade and a very gradual increase in diesel demand.

Who controls the station prices up there, are they independantly owned or operated or run by the oil companies?

Here you go: from Canadian Fuels Association | Association canadienne des carburants


Refiner-Marketer-Retailer Relationships

Most consumers assume that the major brand owners control the retail outlets. That is not the case.

Only 23 percent of all gas stations are controlled by one of the nine refiner-marketers in Canada.

Findings of the 2012 National Retail Petroleum Site Census

There are 94 distinct brands of gasoline in Canada

There are 70 distinct companies involved in the marketing of these retail petroleum brands and their products in Canada

14 percent of all gas stations are under the price control of Suncor, Esso or Shell (our big 3)

23 percent of all gas stations are price-controlled by integrated refiner-marketers

77 percent of all gas stations are price controlled by proprietors, or companies who are not involved in the refining process.

About 6,700 individual outlet operators directly control the price at the pump

Chevron stock: 134.85 July 24, 2014
Today: 116 at 4 PM
I'll buy more tomorrow, maybe...or wait. :confused:
Chevron dividends are excellent...a good long term stock.

The amount of oil that trades on the financial markets is 20X larger than the amount of physical oil that is sold.

Therefore, oil prices reflect lots of things other that current conditions. Expected future conditions; relative attractiveness of other assets; trading strategies; perception of risk.

If you were to elucidate further so that a dumb ass would comprehend, it would be what?
:confused:

87 octane selling around here for $2.90 a gallon. Also just wanted to give a tip of the hat to Sammy for his input on the refining industry!

10% Ethanol gas (which I NEVER buy) is under $3.00 per gallon. I buy 100% gasoline and it is $3.19 as of yesterday. It is astonishing and maddening how much federal tax incentive money is wasted for supporting Ethanol.

Thank you as well Sammy for all the industry insight..!

Sammy,

How cheap would Natural Gas need to be to make GTL technology cost effective?

39.9cents/liter at select shell locations here today. 1984 pricing promotion.

Yea what he said! :)

I am a downstream guy, so I really try to understand the upstream process, but it's just a bit too complicated for my taste. I'll stick to the rocks.

Something a lot of people don't realize, is the middle east is a poor supply chain to US oil, and is a very small piece of our pie. It makes a lot more sense for middle eastern oil to export to Europe and Asia.

Natgas is so cheap now I can't imagine it getting much lower.

Maybe it's like solar power: it costs a great deal more than conventional, so they make conventional more expensive so solar doesn't look quite as bad of a deal anymore.

IOW, how expensive does regular fuel have to get to justify gas-to-liquid tech?

As long as crude is plentiful and reasonably priced it will still be the most economical. when it stops being economical we'll go to alternatives.

I see GTL becoming a regional boutique sort of thing, in places where natgas is plentiful but there aint no pipeline.
Doan make $$$ sense to ship it by truck in gas form, but it might in liquid form.

That is about $1.10 US for a US Gallon.

Shell rolls back prices at 3 Calgary gas stations | 660News

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