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Comments
Funny how prices skyrocket up, then ooze down slowly.
-juice
Both has been at $2.49 or so, then suddenly the Shell dropped to the $2.3x range, I forget exactly but the difference was more than a dime (and they are literally back-to-back!).
I find that strange because Shell is the one with the gas card for deeper discounts, not Exxon. You snooze, you lose, I guess.
-juice
$2.059 at Sheetz and Exxon
$2.099 at Hess
The local news was doing a story last night on a nearby town I call the armpit of Central VA: Shell 87 at $1.999.
87 - $2.199
89 - $2.299
93 - $2.379
94 - $2.439
diesel - $2.439
kcram - Pickups Host
-juice
kcram - Pickups Host
I just have to disagree about this being a plot of "big oil" All you have to do is watch how the traders react to EVERY piece of news during a day, driving the price in whatever direction they think current events will take things. It was fear and panic in the commodity market as far as I could tell. We had a sequence of events that led to a stampede on the trading floors that had virtually nothing to do with actual supply and demand.
It was all a market test. Things changed when it got hot under the collar. Prices are down here like 25-30% in 5 weeks. I can't imagine we've really seen supply or demand change that much.
Then I would blame your local retailers. The national average pre-Katrina (August 30) price for unleaded was $2.604/gal. It dropped back down below that level, on the national average, on October 25, when the national average price was at $2.593. Apparently, your local stations are slower than the rest of the nation, by better than 3 weeks, in getting the prices back down to pre-Katrina levels.
The current national average is at $2.222/gal. The last time we had the price at this level was July 7, when the price was at $2.221.
"It was all a market test. Things changed when it got hot under the collar."
For it to be a market test, there must have been collusion. So I go back to the host's previous post: IF they have that ability, why do a stupid rapid upsurge in price which would guarantee 'investigations' by our political heros? Why not simply gradually raise the price by a penny or two every week? This would give them prices $1/gallon higher after a year or so without all the 'gouging' ranting and raving.
Market test for what? "Gee, I wonder if we jack up the prices 0.75 in two weeks, d'ya think anybody'll notice? Nah, let's go fer it!"
You must think the oil industry is not only incredibly evil, but also incredibly stupid. The LAST thing the industry wants is rapid price upswings because these are just the sort of market fluctuations which could lead to individuals changing their consumption habits.
A note about 'all these profits': last month I kept hearing about the 'record' profits Exxon-Mobile was reporting for the 3rd quarter. I kept hearing the phrase "ten BILLION dollars in profit" being bandied about. I did a bit of checking by reading the EM's actual quarterly report:
http://home.businesswire.com/portal/site/exxonmobil/index.jsp?epi-content=GENERIC&newsId=2- 0051027005507&ndmHsc=v2*A1072962000000*B1130442993000*C4102491599000*DgroupByDate*J2*N1001- 106&newsLang=en&beanID=2030803304&viewID=news_view
It turns out that the actual net income (profit) that Exxon-Mobile made on the sale of downstream petroleum products (gasoline, diesel, aviation fuel, kerosene, heating oil, etc.) IN THE UNITED STATES was $1.1B for the quarter. And for the quarter, they produced a bit over 14B gallons of downstream petroleum product for sale in the U.S.
I'll leave it up to you to figure the amount of profit/gallon they made.
"Market test for what?"
To see what a quick gouge will do for their profits. Drop the line about profits per gallon unless you dare to compare it to the past and then explain why markets not connected to gulf oil in any way also saw a price gouge. We both know the evidence will never show up. It's all an experiment. Oil makes the world go round, and they know it. It's just a little game to see what happens.
Big oil stupid? Probably not, in the long run. They aren't dumb enough to run prices to the point of breaking economy. Evil? Well, depends on your leanings. Hard to call them benevolent. Maybe it's different for those who aren't connected to the industry in some way.
But in the end, prices are lower now, and the economy is better for it. All's well that ends well, I suppose. Of course, this won't be the end.
That straw man argument.....again.
Let's assume, for the sake of argument, that economic models exist which will accurately predict the price of oil (or gas) based on known supply and known demand. Now assume that these models can also accurately predict prices based on speculation of numerous other factors (ie. disruptions to supply caused by hurricanes or sabotage or strikes, changes to demand based on foreign development, etc.)
I assume that many such models exist, and are used by traders on a continuous basis to help them with their continous business of buying and selling. I also assume that these various economic models are also fairly well guarded secrets; particularly those models which prove accurate, because having an accurate price-prediction model would be a huge asset. Being an economist, you probably already know this.
So what makes you think that anyone in here can come up with some sort of model in which we can plug in the documented changes in both the supply and demand to show the corresponding change in price? But you KNOW that such a model can't be produced; which is why you continually ask for it.
Short response - just because the model can't be produced doesn't mean there is no correlation between supply and demand, and the resultant prices.
"...and then explain why markets not connected to gulf oil in any way also saw a price gouge."
First, if this is to be discussed rationally, let's try to leave words like 'gouge' out of the discussion since these words are entirely subjective. I have no idea what qualifies a price increase as a 'gouge' in your mind just as you have no idea what it takes to be a 'gouge' in mine.
So, let's examine why markets not connected to gulf oil 'in any way' also saw a rapid price increase.
First, there were many areas where the refineries where NOT impacted, but THEIR supply of oil WAS impacted (most of the Texas coast). Rather than just let these refineries shut down, do you think that, PERHAPS, they began receiving crude oil from other areas besides the gulf? Do you think that, perhaps, this would have made less crude available to your local refiners?
Second, one of the first things the President did was to substantially reduce the various regional requirements for multiple gasoline blends. In other words, he made it much easier for refineries in other parts of the country to supply product to those parts of the country most impacted. The reason why the SE did NOT sustain prolonged, widespread fuel shortages/outages is because they were able to bring in fuel from other portions of the country. Perhaps your local refineries were sharing some of their product with areas that wouldn't ordinarily receive it.
Therefore, your initial assertion that some markets were "not connected to gulf oil in any way" is false. Unless you were referring to the markets in Europe....although I would imagine that even European markets felt some affects as the SE received some refined product imports in addition to the normal crude oil imports.
Now, about my 'line' about profits per gallon: I don't know what the PAST profits/gallon were. I don't care (although if they were less than .08/gallon, I would find that evidence of 'benevolence' right there). For all I know, the past profit was only a .04 a gallon and now they've jumped up to the 'obscene' level of around .08/gallon. Oh, the horror.
But I suppose $25.8 BILLION dollars in TAXES that Exxon-Mobile paid in the last quarter (which does NOT include the federal/state/local gas taxes paid by the consumer at the pump which averages around 0.40/gallon nationwide) is just fine hunky dory. In fact, you've opined that the oil companies should pay MORE taxes......which are ultimately paid by whom? Yeah, this makes total sense. There's no better way to lower the prices at the pump than to institutue another tax..... :confuse:
Big oil "probably" not stupid in the long run? Well, there's an understatement. I wonder how many extremely intelligent MBA's (not to mention fairly competent economists) work for the EM's of the world? Yes, I too think they are "probably" not stupid.
Benevolent/Evil - pointless discussion, destined to go nowhere.
"just because the model can't be produced doesn't mean there is no correlation between supply and demand, and the resultant prices."
It also doesn't mean there is any correlation. The only correlation is between the emotional actions of traders and which experiment the corporate powers want to try next. That's exactly what I ask for a model as proof...because it doesn't exist. No real justification exists.
I haven't seen any documented changes in supply and demand, and I won't even get into a model. The talking heads and soulless politicos just assure everything that the pricing is all on the up and up, and we should believe it. Just be a good patriot and do what you're told, yeah, it'll be OK.
" Perhaps your local refineries were sharing some of their product with areas that wouldn't ordinarily receive it. "
Perhaps...but perhaps really isn't good enough, is it? Perhaps isn't justification. But when you have the gold, you make the rules. At least until the bullets and guillotines catch up.
And about corporate taxes, how much of a giveaway do you want? The corporate contributions to IRS rolls are already at about a record low, should we just abolish them totally? Maybe more deficits are a good thing.
"..although I would imagine that even European markets felt some affects as the SE received some refined product imports in addition to the normal crude oil imports."
I'd love to see a justified correlation between Katrina area increases in other countries vs what they imported to help the US.
The numbers can't be justified. It was all just a game, and we'll see it again, I wager within the next 12 months. Some people and some states will make bank, as usual. And those people will pretend and lie that everything is peachy keen.
That's enough on this subject, I am going to have the red state trickle-downers flocking in here again, and those lobotomized souls aren't worth it. Back to the cars, away from the partisan garbage. Good day.
Anyway, the Sunoco, (a local Philadelphia company) on Rhawn and Verree in NE Philly is down a penny with regular at $2.09. Ultra is $2.37.
87 - $2.119
89 - $2.219
93 - $2.299
94 - $2.359
diesel - $2.399
kcram - Pickups Host
The rest along my commute are still holding at $2.059.
Express Car Wash no-name gas, East Coast, and another no-name brand at a convenience store are all $2.029.
The price here in State College had been moving down with everyone else. Some place were lower, some were higher, but we generally were moving with the group. But we've been stuck on $2.13 for about two weeks now while the prices seem to have been dropping most other places. The Reading/Lancaster area in PA is runningdown around $1.95, but that's down 10 cents since we dropped to our current price. :confuse:
Henderson, KY: #87 = $1.929
Evansville, IN: #87 = $1.989
kcram - Pickups Host
Prices did drop here yesterday to $2.11
Meanwhile, farther north in VA, $1.999 was common, and I saw $1.979 at East Coast in Front Royal, VA.
In Pittsburgh over the weekend, the going price seemed to be $2.099-$2.139, but I found one BP station for $2.039.
-juice
89 is 10 cents more; 93 is 20 cents higher.
87 - $1.999
89 - $2.099
93 - $2.199
diesel - $2.459
kcram - Pickups Host
-juice
87 - $1.999
89 - $2.099
93 - $2.179
94 - $2.239
diesel - $2.359
kcram - Pickups Host