It's suprising how many people in this forum seem to be okay with $2 gas. I'm not, and I think the reason I squawk about the high prices so much is because there's nothing I can do about them and I guess squawking acts like a vent for me.
I'm not OK with $2 gas and would like it to head back down in price, but the market is the market and WE are half of the forces that determine the price. Granted, our demand isn't going to change by much since there are things we have to use our vehicles for, but I bet these prices have affected discretionary driving habits. Nothing is ever reported regarding that. All we see is "OPEC increases/decreases" along with reactions from consumers.
We can definitely go into this at any of our weekly chats...
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That's assuming gas prices are set by pure supply and demand...I don't see any evidence of that. I wonder if there are any pricing models out there. When prices rise 10 or 20 cents over a couple days, I wonder which part of the equation changes.
"I think the problem stems from the volitility of gas as opposed to milk prices."
Well, I can tell you, that I have seen the price of milk at our local supermarket AND the convenience store is over $3/gal (and I have never, ever seen milk that high). My boss indicated that price is similiar at Wal-Mart, but I don't know for sure, since I do not shop there. Milk was 2.29ish only a couple mos ago or so. Fintail thinks it's absolutely wrong comparo and maybe it is. All I'm saying is this: if oil/gas are so important to the economy and so ingrained that its price affects everything else, that tells me it's a seriously complex market--affected by hundreds or thousands of variables/inputs--but he wants a full accounting of the price changes in any given market on any given day. My sarcasm was directed at that--I feel demanding such an accounting is as foolhardy as he thinks I am for demanding an accounting of the price of milk.
"Gas prices seem to go up based on the market price of crude, but what's already in the pumps is based on prices from awhile ago...is this not so? The so called futures market seems to have a daily effect on the pump prices, which seems fair for the future barrels but seems unfair for the gas already in the pumps at my local station. And the price of milk doesn't go up every day or so $.02 or $.03 like the price of gas is now going. Maybe I'm confused here and since you seem to know more than I do, please help me."
First of all, it's not a "so-called futures market". It exists. When you hear on the nightly news that oil hit $40/bbl, that's the price for a particular type of crude (typically Light Sweet crude--there a couple others) for delivery in a particular period. That is, $40/bbl for June delivery of Light Sweet Crude. It's not what Oil Man Joe paid Al-rhabib TODAY. It's a real market that defines the price. In addition, gasoline has its own futures market. They are traded as commodities, like OJ, cocoa, gold, silver, wheat, etc.
Your point about gas in the tanks vs price increases for gas that's not there is a logical one--I once had a part time job at a gas station where people would say that all the time. The problem is, it averages out. If oil/gas prices fall, they sell gas at a lower price than what they paid for what's already in the tanks. So, for everytime you are charged a higher price for "cheaper" gas in the tank, you pay a lower price for "higher" gas in the tank.
At any rate, even in my little town of 5000 (with 5 gas stations!), deliveries are made nearly everyday, so it's not like you pay higher prices for cheaper gas for a week or anything. Plus, I guarantee you that the wholesalers and the station managers know more than you or I probably will ever know about the balance of pricing, etc to maintain a steady profit over the long term.
"If you can't see that gas has infinitely more influence on countless industries and on the economy as a whole compared to milk, there's no hope in going any further."
Fintail, I certainly realize that oil/gas has huge influence on all aspects of the economy, while milk has few. I read that for American Airlines, a penny increase in the price of fuel costs them $30M a year. My only point is that you're demanding an accounting of EVERY change, in EVERY market, for EVERY reason. Using your own premise, of oil/gas's presence everywhere, do you not think providing this accounting would be inordinately complex? Sure, they can say generally why oil or gas went up, but it doesn't explain why gas is rising faster here in NE WI than diesel is in Mt Arlington NJ. You understand what I mean now?
Lastly, I'm only ambivalent about gas prices because I look at it rationally. See pf's response to bottgers on his trip. .20 increase, yes, alarming, perhaps disheartening. But, gee, ok...I'm traveling 1200 miles in a 20mpg vehicle and it only costs me $24 more. Hard to argue that's such a horrible, horrible thing, isn't it? And credit to pf for giving a much more rational response to all this than I apparently did. He's right on. Economics always win out. It's when the numbers aren't supported by economics that we're in trouble and I'm sorry--I just don't see the collusion or screwing whatever that supposedly is out there, just because prices went up.
The terms the talking heads used to explain away price increases are usually as vague as can be, often resorting to simple supply and demand. There has to be more to it than that. I don't think it would be so hard to determine a pricing model. There can only be so many factors. Surely there are some underworked overpaid minions out there who can come up with something. I can't say I would take it if the data was coming from someone getting a meal ticket from anyone influenced by an oil company, though.
Maybe I'm just pessimistic or you are just optimistic about the methods used to determine prices. Looking at the history of corporate culture, I just find it hard to believe that every factor driving the spiking in prices is honest.
"The terms the talking heads used to explain away price increases are usually as vague as can be, often resorting to simple supply and demand. There has to be more to it than that. I don't think it would be so hard to determine a pricing model. There can only be so many factors."
Yeah, but look at it this way. You cite the economy's dependence on gas/oil and the influence the price of such has on any number of sectors of the economy. Doesn't that lend you to think that something that affects THOSE sectors then inevitably affects the oil/gas industry? Further, what I've been saying all along is you want an accounting why the price changes every time it changes. Do you mean just for your market? Surely, you mean when any American see gas prices change, it should be explained. That right there probably introduces any number of factors. I have no experience or any real knowledge of how wholesale gas is priced, but I can say just between here and Chicago, I can confidently state 5 or more factors that influence the price; namely, the different formulations the EPA requires there versus here, the gas tax differences, overall demand has to be different (maybe it's less in downtown Chicago because of public transport and more in the suburbs because people commute), overall supply capabilities, etc. That doesn't even address the large scale affect other factors that nobody can control (like political situation in Russia to pipeline bombings in Iraq) has on the price of oil.
"Looking at the history of corporate culture, I just find it hard to believe that every factor driving the spiking in prices is honest."
Fair enough. I can't argue with that. And bottom line, this is probably the heart of where we disagree.
"Doesn't that lend you to think that something that affects THOSE sectors then inevitably affects the oil/gas industry? "
I don't see much showing any sector of the economy influencing the gas market in any way even close to how the gas market influences the vast majority of industries. Gas is a commodity that enables the current economy to exist. Those who own it are able to do what they want.
A five factor model isn't exactly mindblowing, and it probably would really have 10 factors or more. Pricing models shouldn't be extremely complicated once one can get past the number of variables. It wouldn't be much to come up with. Certainly there's enough money and idle overhead to make it happen.
I can't see any evidence of the people and organizations who are setting prices being benevolent or honest in any way. They can't justify their prices, but they don't have to anyway. Money = right far too often. That's not right. Simply, I think some of the price increases are happening just because they can.
Not to get off topic here--but I was in Target on Monday and they want $5.24 for a gallon of milk! Grocery stores get 3-something a gallon and the CVS around the corner from me just went from $2.99 to $3.59 a gallon. Milk has also seen a sudden jump--maybe due to rising transportation costs?
"Milk has also seen a sudden jump--maybe due to rising transportation costs?"
Certainly possible. I would comment that around here, there are dairies everywhere--that is, you aren't talking about transporting milk more than 50 miles or so. (Primarily because of that cost--typically, a decent sized farm will have a dairy provided tanker on site, so the dairy comes out once a day or whatever, picks up the tanker and hauls it back to the plant. It's processed, bottled, etc and then shipped out to stores. I would imagine no dairy would want to haul the same milk twice over any significant distance.
And, honestly, despite the increases, diesel (at least around here) is still nearly 20 cents cheaper than gas. So it doesn't explain a $1/gal increase. (See what I mean in my previous posts to fintail, etc about demanding "a full explanation of every change" if were going to do the same for gas?) At any rate, I'm not too bothered, because milk per hundred weight has been way too low for farmers anyway. This seems like a more "fair" price.
EDIT: Just did a little research and found (per USDA data from WI Ag Connection) that in April, milk was $20.40/hundredweight (a record in WI). Previous record was $18.64 in 12/98. The interesting part is April's price is $4 higher than March's and the 4/04 price is (get this) $9.30 higher than 4/03! Since not all milk becomes, well, milk, in this case, I would compare the hundredweight price of milk to a barrel of oil (just like you would compare the gallon price of milk to that of gas). I wasn't able to find out how many gallons of raw milk are in a hundredweight.
on my way home from work, I took a look over at the Citgo station I usually fill up at, its sign partially obscured by trees. 87 octane is up to $1.959 a gallon!
I've been nursing the 1/8 of a tank in my Intrepid for awhile now, but I know eventually, I'm going to have to just take this torture like a man, and go fill up! Probably be best to do it now, before they go up even more!
As for milk, it shot up to $3.69 a gallon for whole regular here about a week or 2 ago. Previously, I'd been paying as little as $2.99 at 7-Eleven. Last time though, I bought 2%. it's not much cheaper, at $3.59 a gallon, but it was just enough to make me feel a LITTLE better, I guess! I'll just add some coffee creamer to make it taste decent again! ;-)
filled up at lunchtime at the Citgo. $1.959 a gallon, and it took just under 13 gallons. Came out to around $25.00.
One thing I noticed, is that while prices are shooting up, the difference between 87 and 93 octane actually seems to be SHRINKING! Not just proportionally, but in real monetary terms. Used to be that 93 was around 20+ cents a gallon more than 87, but today, at the Citgo, hi-test was "only" $2.119 a gallon...16 cents more.
I know it's still gonna hurt, but suddenly, when it comes time to fill up the truck or the NYer both of which have a preference for 89 octane, it won't be QUITE as bad!! But back when 87 was like $1.399 a gallon and 93 was $1.599, it seemed like such a huge jump!
Last night (OK, this morning) on my way home, I put some gas in the Wrangler. Depressing that 25 bucks only does about 3/4 of a tank now! Prices are generally as follows (don't feel so bad, Andre!) at the 'biggies' (Shell, BP, Citgo):
I think (hope) when my S.O. replaces the Wrangler, probably at the end of Summer (gotta keep the topless til then!), he may end up in a Corolla or Accord, hopefully something with four cylinders that gets better than ~18mpg the Jeep gets! Oh how I miss the days when you could put your last five bucks in the tank and actually drive a while!
ENJOY the $2 per gallon gas while you can. The day will soon come when you will look back fondly on the day when gas was "only" $1.99 per gallon. I'm afraid that the era of cheap fuel is drawing to a close. I just hope that it is a gradual transition.
Thus far there has been an adequate supply. It's just the price that people are concerned about. The moment that actual shortages develop, then all H will break loose.
For those who don't remember the 70's, imagine driving on fumes, looking for an open station and when you find one, there is a line stretching clear around the block. AND, when you get to the head of the line, you are limited to a 10 gallon purchase.
...I hadn't filled the tank on my Seville STS for a while because I was too lazy to get around to it. I had found, much to my unpleasant surprise, that Sunoco 94 Ultra is now an utterly absurd $2.20 a gallon! Shoot, the last time I filled up, it was around $1.97 - where 87 is now. It took a little over $33.00 to fill my tank. Thank goodness I don't drive one of those monster SUVs!
... here in Pittsburgh, PA. $1.959 for regular, $2.029 to $2.059 for midgrade, and $2.099 to $2.159 for premium. I was "lucky" to fill up last night and find the one station that had not gone up yet... paid $1.939.
my godmother drives a Dodge Durango, I'd guess around an '02 or '03. It just has the 4.7 V-8, and I think it's only 2wd. I saw her on Mother's day, and at one point the conversation turned towards gas prices. She told me that it's taking $60-70 to fill it up!! She's gotta be exaggerating though, because, looking at the stats, at least, these things only have a 25 gallon tank. I guess if she's letting it run almost all the way to empty and putting premium in though, she might be pushing close to $60.
These kinds of prices make me happy I don't drive some of those guzzlers I used to drive, like my 12-13 mpg Newport, my 10-13 mpg Gran Fury police pursuit (which would throw a fit if you put anything less than premium in it), or my 13 mpg Dart (at least that one would run on just about anything...hell, you could probably pee in the tank and it'd still run fine! ;-)
This kind of stuff also makes me glad I don't deliver pizzas anymore. I figured back in 1999, when I bought my Intrepid, it was saving me $125-150 a month in fuel, compared to the Gran Fury. I don't even want to THINK about trying to calculate what kind of savings it would be nowadays (or how much I'd be spending on gas, anyway). I'm perfectly happy with the 500-600 miles a month I'm currently putting on the car!
10 cents in one day for all grades is the largest increase I've seen thus far (in the latest period of increases). It also reflects a change from $1.739 for reg unleaded back in probably mid-March sometime (I'd have to search back to find my post for the exact date). For perspective, that 36 cent increase, in my car, is only an additional $4.32--in a Durango, it's an additional $9. Still not worried, but trying to convince my sister's boyfriend that a Jetta TDI would be cool even if gas wasn't $2/gal.
if I'd ever get cheap enough to ride my bike to work? It's only 3 1/2 miles, but the problem is that most of that is on a busy 4-lane road with a 45-50 mph speed limit and plenty of cross traffic.
I'm living in the same place now that I did when I was a teenager, and back before I had a car, I worked part time doing maintenance/groundskeeping at a nursery school that was probably, oh, 2.5 miles away. I'd usually get my Granddad, who lived right across the street, to drive me to work, and pick me up, but some days, I'd ride my bike. Or put my bike in the back of his truck, and he'd drive me to work and I'd ride it back home. I hated it, though! And now that I'm older, I still doubt that I'd like it!
There was a four cent bump again this morning up to $1.93 for 87, but the gap between grades narrowed. Premium only went up two cents to $2.05... not sure that that indicates ANYTHING, but I do know that this near panic that the media is getting people into makes for a GREAT environment for speculation on gasoline futures, which drives the price of those contracts up, which gets reported in the news as "bad news on the horizon", etc... perhaps we need to stop reacting to EVERY piece of news as if it's the end of the world.
I understand some environmental or consumer group is staging a "No Gas Day" on May 19th. They state that if absolutely nobody buys gas for one day the oil companies could lose about $4.2 billion.
I wonder what it was like during the crisis when it was truly a pain to get gas. I wonder because I suppose it'll happen again, even if it's only during the end days of gasoline as our cars' fuel. Did anyone think that was the case during the 70s? My default thoughts during something like that would be to think that things would never be the same, but I guess anyone who thought that back then was wrong.
I'm used to $2 gas (only been driving a lot for three years, in California, and only during the summer), but $3 would hurt. I'd consider driving in more gas-conserving ways. I guess I'll find out this summer!
driving past, I noticed that the Citgo station I filled up at the other day jumped another 5 cents. 87 octane is now $1.995 a gallon. Guess it's a good thing I filled up when I did! Now in all seriousness, this last rise would've only cost me about 65 cents if I'd waited to fill up (it took a bit less than 13 gallons), but I guess it's just a psychological thing!
I never thought the concept would work. In my mind, if No Gas Day was tomorrow and I knew I would need gas, I would buy today. Or, if I knew I had enough to through tomorrow, then I would not worry about it. The end result would not change the amount of gasoline sold--it would only change the date it sold on.
"Did anyone think that was the case during the 70s?"
The way I understand it, the price of gas today--as bad as it is--is still half of what it was in the gas crisis of the 1970's. Adjusted for inflation, of course. In other words, it hurt a lot worse 26 years ago than it is hurting today.
I was just a little kid, and honestly was more concerned about the killer bees that were supposedly marching toward the U.S. than I was about gasoline! For some reason, those killer bee movies really left an impression on me as a kid!
I really don't remember the first gas crisis, but do remember the second one. I think it may have been one reason that my Mom traded her '75 LeMans with a 350 in on a 1980 Malibu with a 229 V-6. But then again, that LeMans never did run right after my Dad wrecked it!
I don't remember if they were rationing fuel during the second crisis, but I do remember that stations were running out of gas, and I do remember the lines. Also, I think back then a lot of the things that were just the norm would be considered horribly inconvenient today. I remember back then, a lot of stations were closed on Sundays, and the 24 hour gas station was a true rarity. I think the fuel shortages did force some stations to start closing down more often.
But basically yeah, what we have today is a cake walk compared to what our forefathers had to go through in the 70's! Not only was gasoline more when you factor in inflation, but the cars got worse fuel economy. And the thing that really hurt the most was having a shortage of the stuff!
I think if the approach it "we're gonna stick it to the oil companies and not buy gas TODAY", it's not going to work because, as someone noted, if you need gas TODAY, you will buy it yesterday. That's why I think actually finding a way to NOT use your vehicle for one trip, by NOT just going out for a drive, or combining two trips into one, WILL have an affect, however small, on demand. I think that would send a much quieter but stronger message. And I'm not sure that message is the word I was looking for there.
Really, what I'd like to see is a stop to all the gloom and doom speculation... that kind of stuff is just self-fulfilling because of the way the market works.
The last increase at the pump here was NOT even across the board. 87 went up 4 cents, 89 up 3, premium up 2. Now if I was the suspicious type and looked at that in reverse order, I MIGHT feel like soem profiteering on public reaction to the constant drumbeat of gloom and doom in the media was going on. After all, if the premium grade only went up 2 cents, why does 87 (which I would assume the largest portion of vehicles on the road are using) go up 4?? ...
Hmm...
Even as I type that, an obvious answer comes to mind. More people ARE using 87 than premium. More demand generally equates to a higher price...
having a one day "Gas Out" isn't going to do anything at all. Every once in awhile, I also see emails circulating calling for a boycott of certain gas stations, with the rationale that they'll have to drop their prices, making everybody else follow suit.
Only problem is, it ain't gonna work. For one thing, gas stations don't make much money selling fuel. They make it selling cigarettes, sodas, junk food, and doing automotive repairs/servicing. My great-uncle used to own a gas station. I think it was an ESSO, which tells ya how long ago this was! Anyway, it wouldn't have made any difference to him, either way, if he sold any gasoline or not, because that facet of the business was barely break-even.
For another thing, Exxon, Texaco, Shell, etc, don't necessarily sell gasoline that they produce themselves. They all buy it from various sources, including each other. Try boycotting the Shell station, and demand is going to go up at other stations in response, so Shell just might sell some of their gasoline to those other stations to help meet their demand!
Best thing to do, like PF_Flyer said, is to just use less of the stuff! And it goes beyond just beyond motor vehicles. Depending on how your home's electricity is generated, chances are a good deal of it may come from oil! Awhile back, I got a supplement with my bill that showed the breakdown of power sources to generate my electricity, and the bulk of it (like 97%) was nuclear and coal. I'm sure though, that there are plenty of places where oil is used to generate the bulk of electricity. And I do have oil heat, which thankfully, was locked in at $1.19 a gallon for the first year. That year is up in November though, so I shudder to think what it's going to jump to!
The media. On MSN's home page today they're running an article about how consumers are using just as much gas as ever, despite the continuously increasing prices. They said out of all the people they surveyed, none of them will be buying more fuel efficient vehicles, and most wouldn't be driving any less. They also said that most people wouldn't change their driving habits until gas got to be about $3.50-$3.75 a gallon. There's nothing like publishing an article that basically tells oil companies to keep raising prices. Way to go you idiots!
The stations here in Columbus, GA seem to be holding steady at $1.86 to $1.89 a gallon for 87 octane. Been there for a few days.
What I want to know is why gas is not at least 6 cents a gallon more in Alabama? Columbus sits on the GA/ALA state line. Alabama's gas taxes are 6 cents a gallon higher than Georgia's. I went to my mom's place on Saturday and the gas stations on the other side of the state line were $1.89 to $1.94. It seems to me that gas should have been no lower than $1.92 if all else is equal and their taxes are 6 cents higher, right?
...because they know that they can charge the same price, if they're on the state line. OTOH, you'd think they'd want to take advantage of the six cents lower price as compared to Alabama, just to increase business. The thing is, people won't generally cross state lines specifically to save on gas if it's only six cents a gallon. There was a time when gas in Chicago, for example, was at least twenty cents a gallon more than in Indiana, and for that much difference, people were willing to drive a bit (of course, cigarettes were also an equal measure cheaper, too, so that helped). Six cents a gallon in the average car is less than a dollar a tank.
True it is impossible to make a real dent, and only a small percentage of the population knows about it anyway, but I still support the May 19 NO GAS DAY. I heard it from other sources before coming here and see that members here knew about it... so the word does spread... Will it make a difference? well what else can we do? I run a V-8 in my SeaRay all summer so I'm as guilty as the next guy to overconsume and pay the prices blindly, but if I can help even in a minor way... I'll do it (but I wont park the boat!) I drive a 4 cylinder otherwise on the road!
$1.89 a gallon for 87 at the Mobil On The Run in beautiful St.James, MO. I hadn't gotten any gas for a few days so I was curious what I was going to have to give and, sure enough, we're slowly heading towards $2.00 a gallon. This is not even Memorial Day weekend yet, either. Remember, we have it very good, though, comparing to other country's gas prices. It's true. You might still wanna think about dumping that gas-guzzling SUV, though!
"Oil prices surged near $42 a barrel Monday as markets shrugged off a Saudi proposal that OPEC raise its official output target by 6 percent.
Separately, the Energy Department said the average U.S. retail price of a gallon of gasoline passed $2 for the first time.
Analysts argued that the Organization of Petroleum Exporting Countries must do more -- by adding real barrels to world supplies -- if it expects to curb the relentless rise in crude prices.
A senior OPEC delegate, speaking on condition of anonymity, said the group was so worried about overheated prices that it might consider making a larger increase in its target than Saudi Arabia initially suggested last week."
---------------------------------
Seems that the REAL problem is that PEOPLE, not oil companies are driving up the prices in the futures markets as they react to the constant drumbeat in the news. You know, if they keep pounding the "no end in sight on price increases" angle, then investing in oil futures IS a very attractive prospect since the demand for those contracts will be higher and the price will keep going up as the frenzy continues. Of course, that makes this more about the supply and demand for those contracts rather than the oil itself. This reminds me SO much of the dot.com bubble. EVERYBODY had to have those hot new stocks... and as long as the prices kept moving up, everybody wanted MORE... which kept driving those prices up... even though there was no REAL reason for that kind of price increase. I see this as much the same. Investment demand, fueled by a media that reports EVERYTHING as if markets and prices are going to follow the current trend FOREVER. Except that in this case, WE have to pay a price at the pump, and will continue to do so until this "gas bubble" bursts...
Mazda Mania
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Yes, I heard a news report about one station in CA having $4 per gallon... but that's probably for premium out in the middle of the desert somewhere. I recall driving from LA to Palm Springs and stopping for gas in the desert and noting that gas was WAY more out where you had to have it and had no choice.
But to trumpet that on the radio news over and over...gets people crazy.
Comments
87 - $1.969
89 - $2.079
93 - $2.169
meanwhile, I'm still getting diesel at a low (yeah, right) $1.579...
kcram
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We can definitely go into this at any of our weekly chats...
Mazda Mania
Liven up your evening and join your fellow enthusiasts every Tuesday from 6-7pm PT/9-10pm ET for our Mazda Mania Chat!
The chat room opens 15 minutes before the scheduled chat time, so come early and get a good seat! Hope to see YOU there on Tuesday!
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PF Flyer
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Pickups & News & Views Message Boards
Well, I can tell you, that I have seen the price of milk at our local supermarket AND the convenience store is over $3/gal (and I have never, ever seen milk that high). My boss indicated that price is similiar at Wal-Mart, but I don't know for sure, since I do not shop there. Milk was 2.29ish only a couple mos ago or so. Fintail thinks it's absolutely wrong comparo and maybe it is. All I'm saying is this: if oil/gas are so important to the economy and so ingrained that its price affects everything else, that tells me it's a seriously complex market--affected by hundreds or thousands of variables/inputs--but he wants a full accounting of the price changes in any given market on any given day. My sarcasm was directed at that--I feel demanding such an accounting is as foolhardy as he thinks I am for demanding an accounting of the price of milk.
"Gas prices seem to go up based on the market price of crude, but what's already in the pumps is based on prices from awhile ago...is this not so? The so called futures market seems to have a daily effect on the pump prices, which seems fair for the future barrels but seems unfair for the gas already in the pumps at my local station.
And the price of milk doesn't go up every day or so $.02 or $.03 like the price of gas is now going.
Maybe I'm confused here and since you seem to know more than I do, please help me."
First of all, it's not a "so-called futures market". It exists. When you hear on the nightly news that oil hit $40/bbl, that's the price for a particular type of crude (typically Light Sweet crude--there a couple others) for delivery in a particular period. That is, $40/bbl for June delivery of Light Sweet Crude. It's not what Oil Man Joe paid Al-rhabib TODAY. It's a real market that defines the price. In addition, gasoline has its own futures market. They are traded as commodities, like OJ, cocoa, gold, silver, wheat, etc.
Your point about gas in the tanks vs price increases for gas that's not there is a logical one--I once had a part time job at a gas station where people would say that all the time. The problem is, it averages out. If oil/gas prices fall, they sell gas at a lower price than what they paid for what's already in the tanks. So, for everytime you are charged a higher price for "cheaper" gas in the tank, you pay a lower price for "higher" gas in the tank.
At any rate, even in my little town of 5000 (with 5 gas stations!), deliveries are made nearly everyday, so it's not like you pay higher prices for cheaper gas for a week or anything. Plus, I guarantee you that the wholesalers and the station managers know more than you or I probably will ever know about the balance of pricing, etc to maintain a steady profit over the long term.
"If you can't see that gas has infinitely more influence on countless industries and on the economy as a whole compared to milk, there's no hope in going any further."
Fintail, I certainly realize that oil/gas has huge influence on all aspects of the economy, while milk has few. I read that for American Airlines, a penny increase in the price of fuel costs them $30M a year. My only point is that you're demanding an accounting of EVERY change, in EVERY market, for EVERY reason. Using your own premise, of oil/gas's presence everywhere, do you not think providing this accounting would be inordinately complex? Sure, they can say generally why oil or gas went up, but it doesn't explain why gas is rising faster here in NE WI than diesel is in Mt Arlington NJ. You understand what I mean now?
Lastly, I'm only ambivalent about gas prices because I look at it rationally. See pf's response to bottgers on his trip. .20 increase, yes, alarming, perhaps disheartening. But, gee, ok...I'm traveling 1200 miles in a 20mpg vehicle and it only costs me $24 more. Hard to argue that's such a horrible, horrible thing, isn't it? And credit to pf for giving a much more rational response to all this than I apparently did. He's right on. Economics always win out. It's when the numbers aren't supported by economics that we're in trouble and I'm sorry--I just don't see the collusion or screwing whatever that supposedly is out there, just because prices went up.
Maybe I'm just pessimistic or you are just optimistic about the methods used to determine prices. Looking at the history of corporate culture, I just find it hard to believe that every factor driving the spiking in prices is honest.
Yeah, but look at it this way. You cite the economy's dependence on gas/oil and the influence the price of such has on any number of sectors of the economy. Doesn't that lend you to think that something that affects THOSE sectors then inevitably affects the oil/gas industry? Further, what I've been saying all along is you want an accounting why the price changes every time it changes. Do you mean just for your market? Surely, you mean when any American see gas prices change, it should be explained. That right there probably introduces any number of factors. I have no experience or any real knowledge of how wholesale gas is priced, but I can say just between here and Chicago, I can confidently state 5 or more factors that influence the price; namely, the different formulations the EPA requires there versus here, the gas tax differences, overall demand has to be different (maybe it's less in downtown Chicago because of public transport and more in the suburbs because people commute), overall supply capabilities, etc. That doesn't even address the large scale affect other factors that nobody can control (like political situation in Russia to pipeline bombings in Iraq) has on the price of oil.
"Looking at the history of corporate culture, I just find it hard to believe that every factor driving the spiking in prices is honest."
Fair enough. I can't argue with that. And bottom line, this is probably the heart of where we disagree.
I don't see much showing any sector of the economy influencing the gas market in any way even close to how the gas market influences the vast majority of industries. Gas is a commodity that enables the current economy to exist. Those who own it are able to do what they want.
A five factor model isn't exactly mindblowing, and it probably would really have 10 factors or more. Pricing models shouldn't be extremely complicated once one can get past the number of variables. It wouldn't be much to come up with. Certainly there's enough money and idle overhead to make it happen.
I can't see any evidence of the people and organizations who are setting prices being benevolent or honest in any way. They can't justify their prices, but they don't have to anyway. Money = right far too often. That's not right. Simply, I think some of the price increases are happening just because they can.
Certainly possible. I would comment that around here, there are dairies everywhere--that is, you aren't talking about transporting milk more than 50 miles or so. (Primarily because of that cost--typically, a decent sized farm will have a dairy provided tanker on site, so the dairy comes out once a day or whatever, picks up the tanker and hauls it back to the plant. It's processed, bottled, etc and then shipped out to stores. I would imagine no dairy would want to haul the same milk twice over any significant distance.
And, honestly, despite the increases, diesel (at least around here) is still nearly 20 cents cheaper than gas. So it doesn't explain a $1/gal increase. (See what I mean in my previous posts to fintail, etc about demanding "a full explanation of every change" if were going to do the same for gas?) At any rate, I'm not too bothered, because milk per hundred weight has been way too low for farmers anyway. This seems like a more "fair" price.
EDIT: Just did a little research and found (per USDA data from WI Ag Connection) that in April, milk was $20.40/hundredweight (a record in WI). Previous record was $18.64 in 12/98. The interesting part is April's price is $4 higher than March's and the 4/04 price is (get this) $9.30 higher than 4/03! Since not all milk becomes, well, milk, in this case, I would compare the hundredweight price of milk to a barrel of oil (just like you would compare the gallon price of milk to that of gas). I wasn't able to find out how many gallons of raw milk are in a hundredweight.
I've been nursing the 1/8 of a tank in my Intrepid for awhile now, but I know eventually, I'm going to have to just take this torture like a man, and go fill up! Probably be best to do it now, before they go up even more!
As for milk, it shot up to $3.69 a gallon for whole regular here about a week or 2 ago. Previously, I'd been paying as little as $2.99 at 7-Eleven. Last time though, I bought 2%. it's not much cheaper, at $3.59 a gallon, but it was just enough to make me feel a LITTLE better, I guess! I'll just add some coffee creamer to make it taste decent again! ;-)
One thing I noticed, is that while prices are shooting up, the difference between 87 and 93 octane actually seems to be SHRINKING! Not just proportionally, but in real monetary terms. Used to be that 93 was around 20+ cents a gallon more than 87, but today, at the Citgo, hi-test was "only" $2.119 a gallon...16 cents more.
I know it's still gonna hurt, but suddenly, when it comes time to fill up the truck or the NYer both of which have a preference for 89 octane, it won't be QUITE as bad!! But back when 87 was like $1.399 a gallon and 93 was $1.599, it seemed like such a huge jump!
87 Octane=$2.169-2.199
91 Octane=$2.269-2.199
93 Octane=$2.359-2.399
I think (hope) when my S.O. replaces the Wrangler, probably at the end of Summer (gotta keep the topless til then!), he may end up in a Corolla or Accord, hopefully something with four cylinders that gets better than ~18mpg the Jeep gets! Oh how I miss the days when you could put your last five bucks in the tank and actually drive a while!
87 $1.899
89 $1.969
93 $2.039
As I recall, at lower pricing levels the gaps were more like 10 cents
PF Flyer
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Thus far there has been an adequate supply. It's just the price that people are concerned about. The moment that actual shortages develop, then all H will break loose.
For those who don't remember the 70's, imagine driving on fumes, looking for an open station and when you find one, there is a line stretching clear around the block. AND, when you get to the head of the line, you are limited to a 10 gallon purchase.
Of course that could never happen again.
james
Thinking that maybe selling our LS400 (rated at 18/23 premium only MPG) before gas gets too high would be a good idea.
These kinds of prices make me happy I don't drive some of those guzzlers I used to drive, like my 12-13 mpg Newport, my 10-13 mpg Gran Fury police pursuit (which would throw a fit if you put anything less than premium in it), or my 13 mpg Dart (at least that one would run on just about anything...hell, you could probably pee in the tank and it'd still run fine! ;-)
This kind of stuff also makes me glad I don't deliver pizzas anymore. I figured back in 1999, when I bought my Intrepid, it was saving me $125-150 a month in fuel, compared to the Gran Fury. I don't even want to THINK about trying to calculate what kind of savings it would be nowadays (or how much I'd be spending on gas, anyway). I'm perfectly happy with the 500-600 miles a month I'm currently putting on the car!
$2.099
$2.159
$2.219
10 cents in one day for all grades is the largest increase I've seen thus far (in the latest period of increases). It also reflects a change from $1.739 for reg unleaded back in probably mid-March sometime (I'd have to search back to find my post for the exact date). For perspective, that 36 cent increase, in my car, is only an additional $4.32--in a Durango, it's an additional $9. Still not worried, but trying to convince my sister's boyfriend that a Jetta TDI would be cool even if gas wasn't $2/gal.
$2.25
$2.35
Just north of the Golden Gate Bridge.
Chevron station across the street from el-cheapo
$2.29
$2.39
$2.49
It's no doubt gone up since then.
I'm living in the same place now that I did when I was a teenager, and back before I had a car, I worked part time doing maintenance/groundskeeping at a nursery school that was probably, oh, 2.5 miles away. I'd usually get my Granddad, who lived right across the street, to drive me to work, and pick me up, but some days, I'd ride my bike. Or put my bike in the back of his truck, and he'd drive me to work and I'd ride it back home. I hated it, though! And now that I'm older, I still doubt that I'd like it!
PF Flyer
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I'm used to $2 gas (only been driving a lot for three years, in California, and only during the summer), but $3 would hurt. I'd consider driving in more gas-conserving ways. I guess I'll find out this summer!
The way I understand it, the price of gas today--as bad as it is--is still half of what it was in the gas crisis of the 1970's. Adjusted for inflation, of course. In other words, it hurt a lot worse 26 years ago than it is hurting today.
I really don't remember the first gas crisis, but do remember the second one. I think it may have been one reason that my Mom traded her '75 LeMans with a 350 in on a 1980 Malibu with a 229 V-6. But then again, that LeMans never did run right after my Dad wrecked it!
I don't remember if they were rationing fuel during the second crisis, but I do remember that stations were running out of gas, and I do remember the lines. Also, I think back then a lot of the things that were just the norm would be considered horribly inconvenient today. I remember back then, a lot of stations were closed on Sundays, and the 24 hour gas station was a true rarity. I think the fuel shortages did force some stations to start closing down more often.
But basically yeah, what we have today is a cake walk compared to what our forefathers had to go through in the 70's! Not only was gasoline more when you factor in inflation, but the cars got worse fuel economy. And the thing that really hurt the most was having a shortage of the stuff!
Really, what I'd like to see is a stop to all the gloom and doom speculation... that kind of stuff is just self-fulfilling because of the way the market works.
PF Flyer
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Pickups & News & Views Message Boards
Hmm...
Even as I type that, an obvious answer comes to mind. More people ARE using 87 than premium. More demand generally equates to a higher price...
Only problem is, it ain't gonna work. For one thing, gas stations don't make much money selling fuel. They make it selling cigarettes, sodas, junk food, and doing automotive repairs/servicing. My great-uncle used to own a gas station. I think it was an ESSO, which tells ya how long ago this was! Anyway, it wouldn't have made any difference to him, either way, if he sold any gasoline or not, because that facet of the business was barely break-even.
For another thing, Exxon, Texaco, Shell, etc, don't necessarily sell gasoline that they produce themselves. They all buy it from various sources, including each other. Try boycotting the Shell station, and demand is going to go up at other stations in response, so Shell just might sell some of their gasoline to those other stations to help meet their demand!
Best thing to do, like PF_Flyer said, is to just use less of the stuff! And it goes beyond just beyond motor vehicles. Depending on how your home's electricity is generated, chances are a good deal of it may come from oil! Awhile back, I got a supplement with my bill that showed the breakdown of power sources to generate my electricity, and the bulk of it (like 97%) was nuclear and coal. I'm sure though, that there are plenty of places where oil is used to generate the bulk of electricity. And I do have oil heat, which thankfully, was locked in at $1.19 a gallon for the first year. That year is up in November though, so I shudder to think what it's going to jump to!
Mt. Arlington Exxon, Mt. A, NJ
87 - $2.039
89 - $2.119
93 - $2.219
Mobil, NJ4 westbound, Hackensack NJ
87 - $2.059
89 - $2.139
93 - $2.199
diesel - $1.639 whew!
kcram
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91 octane...$2.49
diesel......$2.54
When is this going to end?
The Sandman :-(
$2.15 (unchanged from last week)
$2.33 (increased)
$2.43 (increased
Chevron station across the street from el-cheapo - up 4 cents across the board
$2.33
$2.43
$2.53
What I want to know is why gas is not at least 6 cents a gallon more in Alabama? Columbus sits on the GA/ALA state line. Alabama's gas taxes are 6 cents a gallon higher than Georgia's. I went to my mom's place on Saturday and the gas stations on the other side of the state line were $1.89 to $1.94. It seems to me that gas should have been no lower than $1.92 if all else is equal and their taxes are 6 cents higher, right?
Pet
Mazda3 GT-GFX Orange sedan
2021 Kia Soul LX 6-speed stick
Here in the NW 92 is at just about $2.50 now
I bet it will fall as November approaches
"Oil prices surged near $42 a barrel Monday as markets shrugged off a Saudi proposal that OPEC raise its official output target by 6 percent.
Separately, the Energy Department said the average U.S. retail price of a gallon of gasoline passed $2 for the first time.
Analysts argued that the Organization of Petroleum Exporting Countries must do more -- by adding real barrels to world supplies -- if it expects to curb the relentless rise in crude prices.
A senior OPEC delegate, speaking on condition of anonymity, said the group was so worried about overheated prices that it might consider making a larger increase in its target than Saudi Arabia initially suggested last week."
---------------------------------
Seems that the REAL problem is that PEOPLE, not oil companies are driving up the prices in the futures markets as they react to the constant drumbeat in the news. You know, if they keep pounding the "no end in sight on price increases" angle, then investing in oil futures IS a very attractive prospect since the demand for those contracts will be higher and the price will keep going up as the frenzy continues. Of course, that makes this more about the supply and demand for those contracts rather than the oil itself. This reminds me SO much of the dot.com bubble. EVERYBODY had to have those hot new stocks... and as long as the prices kept moving up, everybody wanted MORE... which kept driving those prices up... even though there was no REAL reason for that kind of price increase. I see this as much the same. Investment demand, fueled by a media that reports EVERYTHING as if markets and prices are going to follow the current trend FOREVER. Except that in this case, WE have to pay a price at the pump, and will continue to do so until this "gas bubble" bursts...
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PF Flyer
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But to trumpet that on the radio news over and over...gets people crazy.