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Crude oil prices going up....Gas prices going down...

Shows just how much of a profit margin oil companies were using if they can lower prices while crude oil prices are rising.
 
The price of crude oil is clearly not the only factor that influences the price of gas. There are other factors like, oh... demand, perhaps? And refining capacity.. And..
 
Originally posted by: Astaroth33
The price of crude oil is clearly not the only factor that influences the price of gas. There are other factors like, oh... demand, perhaps? And refining capacity.. And..
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...how closely the government is watching the prices.
 
2.05 here in long island for regular gas and i even seen 1.99, its the lowest prices in about 6 months.

i was wondering also why all this talk about crude price high but prices going down, which i'm happy about.
 
These are crude FUTURES, meaning they are contracts for delivery at a future date - say September. As of a week ago there was surplus of gasoline but expect prices to rise as the crude for delivery at X date shows up.
 
Originally posted by: Marlin1975
Gas prices are going up here. About $18X in the Raleigh NC area. Was a good .25 or more cheaper a month ago.
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ahhh, pobrecito! It hasn't been that low here since...since I can't even remember.
 
There are many reasons. Gas prices are not directly related to oil prices (they are indirectly related). Oil may double and gas may only move a few cents (or vise versa).

Oil prices right now are related to fear - fear of a temporary shortage in oil. However gas supply and demand is not currently related to fear. Thus oil prices went up and gas prices are going down.

Think the whole process through. Start with oil being purchased. A refinery here might buy oil at record levels today. That oil isn't immediately at the refinery. It takes a good month for oil tankers to bring it here. Thus automatically gas prices should lag oil prices by a month.

Then the oil doesn't go directly into the refinery. It is stored in the refineries reserves. The reserves buffer out much of the oil price fluxuations. Think of the reserve as a spring that you hold on one end. I push and pull on the other end. Yes you feel the fluxuations, but they are significantly dampened. A refinery with a large reserve may choose NOT to purchase this expensive oil and instead just drain the reserves. Recently reserves have been increased and thus many refineries are temporarilly unaffected by high oil prices.

Then you have the refineries choice of what to sell the gas at. They have been making record profits. So some may choose to absorb some of the oil costs without passing it on to their customers. Same goes for the individual gas stations that you buy the gas at.

There are so many buffers betwen gas purchase and oil purchase that they really can move quite independantly.
 
Originally posted by: SampSon
There is a surplus of oil and the refineries can't keep up.
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Tell that to the oil companies...

"Evidence Shows Shell to Demolish Profitable Refinery, Drive Up Gas Prices; Consumer Group Seeks Intervention of Bush, Kerry, CA Attorney General

SANTA MONICA, Calif., April 6 /U.S. Newswire/ -- The Foundation for Taxpayer and Consumer Rights today released internal Shell documents showing the oil refiner is set to close and demolish its Bakersfield refinery despite the fact the site had the biggest refinery margins, or profits per gallon, of any Shell refinery in the nation as of yesterday.

Shell had claimed it was not economically viable to keep the refinery open and has refused to put it up for sale. Bakersfield supplies 2 percent of the state's gasoline and only 13 refineries feed California's tight gasoline supply (down from 37 in 1983).

An April 5th internal Shell document released today by FTCR shows that Bakersfield's refining margin at $23.01 per barrel, or about 55 cents profit per gallon, topped all of Shell's refineries in the nation. That means, for example, that margins are 36 cents per gallon higher in Bakersfield than in Port Arthur, Texas. The internal document comments under the category of refinery margins "Wow."

"Only an oil company that wants to short the market and artificially drive up the price of gasoline would demolish a highly profitable refinery rather than sell it," said Jamie Court, president of FTCR and author of the book Corporateering (Tarcher/Putnam). " Shell has deceived the public about Bakersfield and must be forced to keep this refinery open or sell it to a competitor. This evidence should also spur a national moratorium on all further domestic refinery closures."
 
Originally posted by: gwlam12
So if crude oil prices are going up, why is gas price going down?
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There are other factors at work than price per barrel of oil. People tend to do more driving in the summer than in the winter. Consequently, mid July is when the demand for oil tends to peak (demand increases price). Although the marginal drop in price (5-10 cents where I live) from previous months seems counter-intuitive due to increase in the raw price of oil, the decrease in demand for gas has contributed to recent price drops for consumers
 
Originally posted by: Xenon14
Originally posted by: gwlam12
So if crude oil prices are going up, why is gas price going down?
Click to expand...

There are other factors at work than price per barrel of oil. People tend to do more driving in the summer than in the winter. Consequently, mid July is when the demand for oil tends to peak (demand increases price). Although the marginal drop in price (5-10 cents where I live) from previous months seems counter-intuitive due to increase in the raw price of oil, the decrease in demand for gas has contributed to recent price drops for consumers
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Decrease in demand for gas? Was there really a decrease in demand? I thought summer was the season where everyone goes on vacation so I figured demand would go up.

But whatever the case, almost every post here was pretty informative. Thanks all.
 
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