Yet Another Gas Thread

[iversonyin]

I think gas is going to average $3.00 nationwide heading into the summer season. BUY oil companies NOW to hedge against your increase in gas expense.

http://www.gasbuddy.com/

NYMEX Crude: 65.60

National Average: 2.67

NYMEX Rbob Gas: 2.05

Crack Spread (refiners operating margin before any operating expense):
2.05 * 42 (42 gallon = 1 barrel) = 86.1 - 65.6 = $20.5 per barrel of oil refine.

Gas station margin:
2.67 - 2.05 = 0.62 a gallon before transportation and operating expense.

EDIT: Update as of 3/30/07

 

[waggy]

ok dave

 

[Smartazz]

err, I'm getting 11mpg right now, I'm going to be hurt badly by these upcoming gas prices. Maybe I should carpool a lot more.

 

[veggz]

If the price inflation isn't artificial why would oil company stock prices necessarily rise?

 

[iversonyin]

Originally posted by: veggz
If the price inflation isn't artificial why would oil company stock prices necessarily rise?

Supply and demand...driving season = more demand for gas. I believe we haven't build a refiner for quite some time so our capacity to produce gasoline is capped. Capped supply + increase demand = price increase. And oil companies buy and sell these things at market price. Or they hedge using futures/forward contracts.

 

[sindows]

And? I though we all knew that gas prices will go up overall... $3 will not stop me from driving.

 

[jagec]

I'm getting 50-55mpg right now, so I can't complain too much.

 

[iRONic]

Originally posted by: iversonyin
I think gas is going to average $3.00 nationwide heading into the summer season. BUY oil companies NOW to hedge against your increase in gas expense.

Thanks, Kreskin.

 

[iversonyin]

Originally posted by: sindows
And? I though we all knew that gas prices will go up overall... $3 will not stop me from driving.

Just offering an option for people who are upset about it - there's always someone who complain when gas price shoot up to $3/gallon. Guess what? BUY some oil companies and you can make some money off to hedge against the driving season madness.

 

[miri]

$3? I wish it was that cheap here, it is already 3.20 for 87 octane

 

[iversonyin]

Originally posted by: miri
$3? I wish it was that cheap here, it is already 3.20 for 87 octane

California? Chevron-Texaco.

 

[Smartazz]

Originally posted by: iversonyin

Originally posted by: sindows
And? I though we all knew that gas prices will go up overall... $3 will not stop me from driving.

Just offering an option for people who are upset about it - there's always someone who complain when gas price shoot up to $3/gallon. Guess what? BUY some oil companies and you can make some money off to hedge against the driving season madness.

That sounds like a really good idea. Thanks.

 

[3NF]

Drive a motorcycle.

 

[ponyo]

Originally posted by: iversonyin

Originally posted by: sindows
And? I though we all knew that gas prices will go up overall... $3 will not stop me from driving.

Just offering an option for people who are upset about it - there's always someone who complain when gas price shoot up to $3/gallon. Guess what? BUY some oil companies and you can make some money off to hedge against the driving season madness.

No guarantee of $3+ gas.
No guarantee oil company stocks will go up even if we have $3+ gas for the summer.
Do you think people who will be hurt most by the $3 gas can afford to buy stock in oil companies?

 

[Smartazz]

Originally posted by: Naustica

Originally posted by: iversonyin

Originally posted by: sindows
And? I though we all knew that gas prices will go up overall... $3 will not stop me from driving.

Just offering an option for people who are upset about it - there's always someone who complain when gas price shoot up to $3/gallon. Guess what? BUY some oil companies and you can make some money off to hedge against the driving season madness.

No guarantee of $3+ gas.
No guarantee oil company stocks will go up even if we have $3+ gas for the summer.
Do you think people who will be hurt most by the $3 gas can afford to buy stock in oil companies?

Yeah, the stocks didn't go up much last year from the high gas prices during the summer. I mean I can afford the gas, but it's just expensive to go anywhere, but I guess we just have to suck it up.

 

[FoBoT]

the percentage of your total annual budget that goes to fuel is X% ?

going from $2 to $3/gal changes that X% from x% to X% ?

do the math , it isn't that much difference

 

[Queasy]

Originally posted by: miri
$3? I wish it was that cheap here, it is already 3.20 for 87 octane

Price of living in California. You pay more in gas taxes than anyone else and you have a tighter supply of gas because you have your own special blend of gas.

 

[George P Burdell]

Oh teh noes!!!1! Whatever will we do?

 

[iversonyin]

Originally posted by: FoBoT
the percentage of your total annual budget that goes to fuel is X% ?

going from $2 to $3/gal changes that X% from x% to X% ?

do the math , it isn't that much difference

Yet there are gazillion people complaining on this forum and do NOTHING about it. From $3 gas to record year and quarters from Exxon.

 

[FoBoT]

my point it is a red herring to distract people from more important things

 

[ponyo]

Originally posted by: iversonyin

Originally posted by: FoBoT
the percentage of your total annual budget that goes to fuel is X% ?

going from $2 to $3/gal changes that X% from x% to X% ?

do the math , it isn't that much difference

Yet there are gazillion people complaining on this forum and do NOTHING about it.

Because it's fun to complain. Heck I complain about gas price even though it doesn't really hurt me. I just pass on the cost to my clients.

 

[Eos]

Originally posted by: iversonyin

Originally posted by: veggz
If the price inflation isn't artificial why would oil company stock prices necessarily rise?

Supply and demand...driving season = more demand for gas. I believe we haven't build a refiner for quite some time so our capacity to produce gasoline is capped. Capped supply + increase demand = price increase. And oil companies buy and sell these things at market price. Or they hedge using futures/forward contracts.

Really? REALLY?

Demand in my area went up 6% in one day? I have never been adequately explained the supply & demand that a lot of people say is the reason for higher prices. It all seems like voodoo to me.

No one is having trouble buying fuel are they? Are there shortages now that "demand is up"?

I'm seriously.

 

[ElFenix]

Originally posted by: waggy
ok dave

no, dave would say $10 and then tell you that you need to stock up ammo for the coming revolution. iversonyin says $3 (which is probably accurate) and suggest hedging by buying stock (though, as everyone already expects the price of gas to go up to $3, i'd say that information is already incorporated into the price and you won't make any money on it)

 

[PAB]

Originally posted by: veggz
If the price inflation isn't artificial why would oil company stock prices necessarily rise?

When oil goes up, crack margins increase.

The oil price increase makes it economically viable for refiners and integrateds to operate units like cat crackers and break down heavier hydrocarbon chains into ligher distillates like gasoline, kerosene, etc. The more the price of crude goes up, the more they can make through crack margins.

 

[Xyclone]

Originally posted by: iversonyin
Topic Summary: We will see $3.00 a gallon soon and $70/barrel

Heh, welcome to California.