Not understanding Current Oil price

Forgive me but I don't get out to gas stations much. I stay at home with my 1 1/2 year old most of the time or go to the park. My husband usually stops and gasses the cars. Last night on our way home I was stunned to see the gas price for cheap stuff at $2.94! Im in CA by the way. What the heck happened, I was under the impression prices per barrel dropped significantly since last year. What is the excuse this time?

The election is over. I was not surprised to see the prices drop before the Nov election. Now that the oil companies have another 2 years or so to screw us they are going to take advantage of us.

This summer gas will be skyhigh, but right before the NOV 2008 elections gas prices will drop again.

Uhhh a barrel of Oil is 62 bucks right now... Believe it or not... oil prices arent set by the USA. Its a WORLD MARKET! There is more beyond your borders...

Dude, have you not heard about the flap with British sailors captured by Iran?
The commodity buyers are panicking and buying, driving the price up.

In the eastern part of Tennessee, our gas is up to the $2.50 range. It's been going up a few cents ever couple days. We're expecting $3.00 per gallon by the end of the month.

In Texas it's about $2.70, for the cheap stuff, this sounds good if it get near $3 like before. Even though I believe Light sweet crude oil went down wednesday or thrusday, buyers are still paranoid and what not so that drive prices up.

I know these days will never come back, but I really liked the days of 99 cents a gallon.



Ah, memories.

It's part of the grand experiment. Can the invasion of Iraq and forced increase of oil production disguise the rising price of oil from aging elephant fields of Saudi Arabia, UAE and Kuwait?

Originally posted by donk_316
Uhhh a barrel of Oil is 62 bucks right now... Believe it or not... oil prices arent set by the USA. Its a WORLD MARKET! There is more beyond your borders...

True, but oil is not gasoline - which is refined right here in the USA for the USA. So, prices at the pumps do not necessarily reflect the price of a barrel of oil.

Current oil prices:
The price of gas is determined by several factors:
First is the supply of oil, and the cost for a barrel. And combined with that of some of the lack refineries still either going down, or in the process of downsizing. And then there is Geopolitics. Anytime one of the major oil producing nations have a bit of problems with their neighbors or the world at large, it affects supply. What most do not understand is that the local gas stations do not set price, but are regulated by the actual oil companies, who control the refineries.

May futures closed at 2.1288 on Thursday, now add all taxes and profit. There's your pump price.

Roper

Originally posted by ben91069

Originally posted by donk_316
Uhhh a barrel of Oil is 62 bucks right now... Believe it or not... oil prices arent set by the USA. Its a WORLD MARKET! There is more beyond your borders...

True, but oil is not gasoline - which is refined right here in the USA for the USA. So, prices at the pumps do not necessarily reflect the price of a barrel of oil.

They most certainly do reflect the cost of gasoline. Oil is the feedstock for the fuel and chemicals industry. Manufacturing costs, yes, can be cut down, but raw materials in any industrial are probable to change and flucuate day to day. Such as is the price of oil.

Oil first started as a hand dug commodity and evolved in an industry in baku in the early 19th century and was a full blown industry with lobbyist and wars at the begining of the 20th century. But, since 1970, east texas oil fields could not meet world demand when arab nations changed production quotas. The oil weapon began. The Soviet Union shortly bewfore it collapsed had peak production of 14 million barells per day and was the largest exporter. Not anymore, now number two but with rising investments all over the world, I don't think it is any surprise that OPEC nations would ban together to hault production in countries such as Russia, China, Kazhakastan (yes, the new major!), and the west coast of africa.

Oil prices, have become more volatile after 1970 and much more volatile after 1991 and after the ghawar and other elephants hit their peak in the late 1990's, prices are more volatile than ever.

Originally posted by sdcigarpig
Current oil prices:
The price of gas is determined by several factors:
First is the supply of oil, and the cost for a barrel. And combined with that of some of the lack refineries still either going down, or in the process of downsizing.

According to this article, that is pretty close to the cause for the 18 cent jump in two weeks.

Trilby Lundberg, publisher of the Lundberg survey, said the latest rise stems from reduced refining capacity due to maintenance at a time of strong gasoline demand.

But this seems like a way of price gouging that they can say is ok because they needed to do maintenance. Any time they want to make their already record and mind boggling profits grow by leaps and bounds, they can shut down for maintenance.

Sadly, nothing can be done until we decide to not drive our gigantic SUV's three blocks to the store.

("they" is reffering to the oil companies)

If you want to complain too much about the cost of gas in America, then you should look here!

Sometimes we don't realize how good we have it when it comes to gas prices. But I still don't see a need for the cost of gas to go up that much, especially since the oil companies are making billions of dollars every quarter.

i paid $3.29 last night for Super in NY. Once it gets warm, the car goes into the garage and the motorcycle comes out... i can go to work almost all week on 4 gals and twice as fast!

Originally posted by etotheitheta

They most certainly do reflect the cost of gasoline. Oil is the feedstock for the fuel and chemicals industry. Manufacturing costs, yes, can be cut down, but raw materials in any industrial are probable to change and flucuate day to day. Such as is the price of oil.

I did not mean that the price of oil had nothing to do with the price of gasoline. Of course it does. What the OP is saying is why the sudden jump in prices over a short period of time. In that same time span, the price of a barrel of oil did not jump proportionally, which means it is other factors at work here that gouges the prices. So, in effect it has little to do with the cost of a barrel of oil. It has a lot more to do with futures markets, and state-side supply and demand.

We know that the demand for gasoline does not fluctuate that wildy in a matter of a few hours, so in effect the price gouging is all about speculation on markets that were bought some time ago. Perhaps these futures were bought on the idea that the US would be attacking Iran by now.

Originally posted by uberarcanist
Dude, have you not heard about the flap with British sailors captured by Iran?
The commodity buyers are panicking and buying, driving the price up.

and DUDE! I asked my original question on 3-8 well before the Brits were captured by Iran so that didn't even factor into my original question. Thanks everybody for the info! Now paying $3.19 for the cheap stuff.



[edit on 11-4-2007 by favouriteslave]

It was allready predicted for $3 or so from an article I was reading. It's like it's pre-planned.

It's crazy, $10 doesn't go very far anymore. Oil is a trap.

I know it's been said before, but we must get away from petrolium fuel. There is better, there is cleaner.

Troy

Recently I've heard talk on news programs of $4 a gallon Some economists say increase federal tax to bring gas up to $8 per gallon, ala Europe prices and taxes. Wow, talk about a major, if not impossible, lifestyle change for Americans (walking to work, school, stores, etc., use local public transportation and a national train system, return to smaller cars and trucks, etc.)!

Here is what I'm wondering about. For about a year I've noticed new oil wells being erected and working along with old, inactive ones pumping again, along a stretch of a California highway in Kern County. If there is a refinery problem, why is more oil being pumped? Is it not being refined? If not, where is it going?

During the years of "oil shortages", the above older oil wells never were working. Now they can't pump fast enough. Is it like my telling my children I didn't have money to give them, when in reality I had it but didn't WANT to give them any money at times?

I wish I knew the answers to all questions about gas. I just miss the good days where I could fill my car up with 12 bucks. I know that isn't even comparable to what some of the older people paid, but that's what it took when I started to drive!!