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i just read an article how crude oil prices have dropped 18% since may which would equate to some .74 cents a gallon based on the 4.09 it was here. but gas prices are only down .28 cents. why are the gas stations not dropping their prices as fast as the oil prices are dropping? are they scared that it might spike again? can someone please explain this to me. thanks..

randy.
 

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That is because most of the gas refined, and that is shipping to the gas stations was bought at a higher price. It may take a while untill they start getting the cheaper gas.
 

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Its funny, owners of gas stations and other petroleum officials say that gas prices dont reflect day to day crude prices, just more of a trend... Yet when on a certain day, crude goes up, all the local stations go up as well, very shortly after. But when crude goes down, we don't exactly see gas prices go down nearly so fast.
 

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the cost of oil accounts for 79% of a gallon of gas.......so $3.23 is for oil at $4.09 per gallon of gas.... so 18% of $3.23 is $0.58.... $4.09 - $.58 = $3.51 currently for a gallon of gas.......
 

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The reason why gas stations respond more quickly to the rise in crude is too be able to afford the next shipment at the higher price. And like another said it takes a little time to sell off the higher priced fuel before you can drop the price.
 

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Who says I have EVER dropped my prices. I'm the highest priced LCO in the area!!!:weightlifter::weightlifter::weightlifter:
 

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Got my gas today for $3.58.
 

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Petroleum is bought and sold on the futures market. Futures spectulators control the futures market. The end result of the futures market at the pump can be up to 3 months IF the downward trend continues. Unless we put pipe in the ground domestically, the downward trend will not last 3 months.
 

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Petroleum is bought and sold on the futures market. Futures spectulators control the futures market. The end result of the futures market at the pump can be up to 3 months IF the downward trend continues. Unless we put pipe in the ground domestically, the downward trend will not last 3 months.
How do they control it? Futures market is an end product market. You buy the "stock" (for simpler terms) and if you don't sell it off by the delivery date, you better have a place to store all that oil because it's being delivered on that date. Speculators can have an impact during the middle of the month, but if ExxonMobil or Chevron came back and said "yeah, I'll buy that oil you bought for $140 a barrel for $120" they would have to sell because they don't have a place to store it. So either there are a hell of a lot of oil tankers off the horn of Africa that we don't know about, or there are a hell of a lot of people with huge underground oil holding tanks in their backyards or on their ranches that we don't know about either.

Oil is bought and sold on a world market. Nobody really gives a crap about whether the US is complaining about oil prices. If China, India, and Europe will buy the oil at the higher prices, then they could care less if they are selling the same amount. The reason that oil dropped from the 147 mark was because we as Americans (and the biggest ***** for oil) decided that we had enough of these oil prices and gas prices and cut back on our own consumption. With our consumption decreasing, there became a very slight surplus and that is why the oil prices dropped. Put it this way, if the US, for some reason, just stopped using any oil at all in anything, the price of crude oil would plummet to $5,10, or $15 bucks a barrel tops.

It's been said on here by a few guys, but the reason gas doesn't drop as fast is because when gas drops to 2.81 (wholesale before taxes, fees, and transportation) and say the station bought when the gas was being sold at 3.00 wholesale, they are making around 19 cents a gallon profit on top of what they were profiting before. At the amount of gasoline they sell on a daily or weekly basis, that is A LOT of money.
 
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