...but prices were going up with every daily price increase of a barrel of oil (being phoned in to the stations by their reps). Big Oil has made all the "extra bucks" they need for one year (at the expence of the rest of the global economy).

 

Here's the real answer: oil companies buy more barrels a day than they refine and sell in a day, so they always have millions of barrels stored. When the price was going up it was largely due to demand, so their stored barrels were being moved through quickly. When oil started to crash, demand was still low - even though the price of a barrel was coming down, they were still moving through oil they had already paid a higher price for. As the stores were drawing down and being replaced with new, cheaper barrels, the price came down.

If demand had remained high when the prices were high, then the price of a gallon of gas would have come down right along side with the price of a barrel, but since demand was lower it took longer.

 

Like I said, get the oil man out of office and the gas prices will come down. AS SOON as he got voted out, the gas dropped to the prices they were before the idiot took office. Call it coincidence if you want........But you guys said gas would never be lower than $3 again that it was impossible and look at now.......$1.73 here in Arizona.

 

Gas prices come down every fall, it has nothing to do with the President or the elections, yet when it happens in an election year all of the same idiots come out and say "See, it's because of the elections!" in spite of the fact that the same thing happens every year whether there is an election or not. Falling demand and a lack of credit is to blame here - remember, the majority of the oil speculators didn't have billions in cash lying around to buy all of those barrels and drive the price up, they were doing it on credit. Now that their credit lines have been reduced (and in some cases eliminated) due to the banking situation and credit crunch, they can't buy as much. Some can't buy at all. That, combined with the fact that people actually changed their driving habits, resulted in a decline in the price. Also lets not forget that a lot of people's personal credit lines have been reduced as well, so those who would swipe the card and not really think much about it had to start watching their spending.

Because we don't need to buy as many barrels to meet our demand, we didn't need to bid as much to get the quantity we needed. You're right that I didn't think it would go below $3 again though - I figured that was the bottom because around the $3 mark consumption was relatively the same. Everyone was complaining about it, but no one was actually changing their driving habits. At $4 people stopped driving so much. Many companies actually changed their policies to assist in this, offering to let their employees work 10 hour days for 4 days a week instead of the traditional 8 hour days 5 days a week, eliminating a whole day's worth of driving. The credit crunch changed this, because it forced the speculators out of the market - that wasn't expected, although I can't say I'm complaining. Sometimes it's good to be wrong.

It has nothing to do with who is President. Just like how the credit crunch has nothing to do with the President, the status of GM has nothing to do with the President, and housing prices have nothing to do with the President. It's nice to have a scapegoat and be able to say "It's all THAT guy's fault!" but it doesn't make it accurate or true. The sooner you and other Americans who are equally uninformed on this subject realize this and pay attention to the actual causes of economic situations, the sooner we'll stop putting morons in office who believe the same thing. You see, the problem with people who think the President has anything to do with ANY of the stuff mentioned above or anywhere in this thread is that if you believe the President is to blame, then you believe the President can also fix the problem, and you'll elect any idiot who comes along and says he can.

The President has nothing to do with the price of oil, gas, food, credit, etc. unless he's taxing them. And in which case, the prices of those things go up, not down. We're already paying 40 something cents a gallon due to taxes (18 cents is the Federal tax portion). That means when you take away Uncle Sam's cut, gas is actually only $1.39 a gallon... your buddy Obama wants to raise the gas tax though. And now that prices are falling, he'll get away with it.

By the way, do you know what Obama's solution is for GM? It's not to help them reduce their costs by kicking out the unions. It's to make Toyota and Honda's costs more expensive by forcing them to let the unions in. That's the twisted logic of the left. Congratulations, I hope you're happy with your choice.

 

You drive a Vette and worry about mileage?

 

Do you notice how people who were defending the oil companies when prices were rising so meteorically by saying that the variable costs associated with the cost of raw materials (pronounced "barrel of crude oil") was what was driving the price of gasoline and now those same folks are saying that the fixed component of the manufacturing costs are holding the prices up? You can't have both sides of the argument. Since they are producing less gasoline (they claim) then there are fewer gallons of the product to absorb the fixed costs, but the reduction in demand is in the area of single digit percentages.

If the price takes 10 days to increase to reflect the rising cost of oil but it takes 20 days for it to come down, did you bother to ask "why?" or did you just accept that lame explanation? What's the mechanism that causes this mysterious delay on the down side? Of course people in the business would say that. It's like the falacious argument that the gasoline in the tanks in the ground was purchased at higher prices so it has to be used up before the lower raw material prices can be expressed. That's bull too. The gasoline in the tanks was there when the prices were run up. Didn't they make offsetting profits on the favorable side when they repriced at the pump?

There's lots of shell games that the manufacturers, dealers and taxers will run, but none of them hold much water on close inspection.

 

So, I'm an idiot huh ?? Well, coming from you that is a compliment I guess. Seems you ALWAYS have the answer......

As far as my choice who the next Pesident is, I did not care for either so I did not vote. Let me guess, you wanted McCain ?? He lost so I guess everybody else was wrong in their choice?? Except you, you were right but the majority got it wrong.

I still say, take the Oil Man who only cared for himself out of office and prices drop. Sure they drop every fall but they dropped almost $3 a gallon. Remember, YOU said it was impossible for gas to ever get that low again........

 

This has been explained to you numerous times in this thread, by more than one person. In spite of this, you keep insisting the same incorrect belief. If you don't like the label I chose, feel free to suggest a better one and I'll start using that instead.

Actually I didn't care for either of them because neither one of them understood how we got into the financial situation, or how to get out of it. Both of them wanted more regulation on the financial sector - excessive regulation was the CAUSE, not the cure. You can't begin to "fix" a problem when you don't even understand what caused it in the first place.

Yes, we know you still say that - that's why you keep getting called the "i" word. You can keep saying it all you like, it doesn't make it true. The President has nothing to do with that.

I never said it was "impossible", but I did say it wasn't going to happen. And for the reasons I said that it wouldn't have. If there was no credit crunch, speculators still would have been speculating and the price of oil would have stayed up.

 

Driving to work in Southern Maryland this morning saw Sunoco 93 at $1.99/gal. Ya baby...., that's what I'm talk'n 'bout !!!

 

Just do the math, a barrel of oil is 42 gallons will produce up to 35 gallons of gasoline. So if a barrel of oil costs $120, then the cost of a gallon of gas itself is $3.43. Add in an average of 40 cents worth of taxes (18 cents Federal tax plus whatever each state or county charges on top of that) and you're at $3.83 - and that's before the oil company makes a profit, before the refinery makes a profit, before the cost of refining and transporting it to the gas stations are factored in, and before the gas station makes their profit. It's not at all unreasonable

So at $50, the price of a gallon of gasoline is $1.43 pre-tax/pre-profit ... so tell me, where is the shell game? The numbers all match up.

As for the delay between crude and pump, it's like this... you're a gas station owner. If you're a small station you may have a 2,000 gallon tank in the ground. A mid to large station would have a 10,000 gallon tank in the ground. If the price of oil jumps so does your cost to refill your tank in the ground. If you, the gas station owner, are paying $2.50 a gallon today then you expect to pay about $25,000 to fill that tank. But as the price rises, you realize that your next fill is going to be at $3.00 a gallon and you're going to have to cough up an extra $5,000. Then the price rises to $3.25 and you have to spend $32,500. And this is WEEKLY mind you, so you have to have a ton of cash on hand to be able to do this, because they sure aren't going to just drop the gas off and not get paid for it, especially at these prices.

So even though the gas in the ground was purchased at a cheaper rate, you raise your prices up to be consistent with the higher price, because you need to make that extra profit now in order to have the money to pay for the next refueling. So in spite of the fact that you're charging more for gas you bought at a discounted rate, you're not actually seeing a profit here because you need that money to buy the next tank of fuel. And that one was going up too, at least that's how it was for the last 3 years or so. Your profits remain relatively the same percentage they've always been, the gap in pricing just keeps getting absorbed by the rising costs.

Then the price starts coming down - something which unless you were running a gas station in the 80's has probably never happened to you before. However you paid a huge sum for the gas in the tank. You paid $40,000 for the gas in the ground - are you honestly going to tell me you're going to sell that gas for half that? You can't stay in business that way. You'll reduce your price slowly to soften the impact, and bring the price down next time you refuel. It's not the oil companies that are doing this, the majority of the gas stations are independently owned.

It's not a perfect world, man. That doesn't mean everyone is gouging.

 

Yup I feel your pain.. I stored my car last month and now the gas is cheap, my 383 gets about 10mpg, and I was paying about $4.58 a gallon over the summer.

I hope prices stays this way, but I figure right before summer it will be back up again...

 

$1.59 for regular unleaded here in Sunny but cool South Texas.

Kona

 

Happy? I'm ecstatic. Stick it to the Asian interlopers. If the big 3 go Chapter 11, only Toyota and Honda will be stuck with paying union benefits. Either way, they'll join the chorus of support for universal health care that will slash their worker and retiree obligations.

As for the gas tax rise, we'll need it to pay those millions of workers who will rebuild America's long-neglected infrastructure.

 

 

yawn!

 

Too much math for you?

 

Sorry to rub it in guys,but yea its $1.57 at the mom and pop store here in S.Tex , Corpus

 

I got all of ya'll beat, I paid 1.52 for regular unleaded yesterday. I actually filled the Vette all the way up for a change the other day instead of $10 here, $20 there.

 

What do you think the chances of Honda or Toyota paying union wages is, they might just close up shop here in the U.S.A. and go back to Japan and ship their cars here like in the beginning. Peace,,,Moosie
Oh, almost forgot about the topic, gas here is between $1.99 and $2.05 !

 

$1.49 here in Tennessee ( SWEET )..............I feel like a time traveler.