Crude oil is down to $91.50ish (2:30 PM EDT) - was hovering at about $100 a couple of days ago.
I get that gasoline is a commodity and retail pricing is a function of the market, not the retailer's cost of the product in the ground at your local service station.
When crude goes up, it takes mere nanoseconds before pump prices ratchet higher.
When crude goes down, pump prices become sticky.
Who is raking in the extra profit on the float? Not the retailer I assume.
Yeah, it rains in Louisiana, prices go up in anticipation things might get wet, a sheik sneezes - prices go up immediately, then maybe drift down. There's lots of excuse-making, but there's a disconnect between the excuses and whatever is really going on. It's a very manipulated market in every aspect imaginable. Now I'm going to go run and hide before this takes an unfortunate turn.
I suspect the ban hammer looms large over this thread..
My understanding is the speculators/distributors. The Crude oil people sell at todays prices, the Refiners buy at todays prices and the distributors buy gas at todays prices. The gas in the distributors tank gets sold by the distrubutors as demanded at prices determined by speculators.
But I'm 100% confident this is incorrect and the real answer is much much more complicated than this.
Its a conspiracy, man.
I don't think the answer is complicated at all. I think the prices have been artificially inflated for quite some time. Speculation of course.
If ya don't like it, buy a different fuel for your car. Oh, wait...
The gas folk are very careful to tread just this side of collusion and price fixing...I think it could be easily considered to be the other side.
I love the statements, both said with a straight face::
"The price of crude went up, so we had to raise our prices to reflect the higher cost."
"The price of crude went down, but we have older, higher priced crude in our system that we have to sell first."
When I'm President (or Dictator, depending on election or coup), I'll ban futures trading.
Javelin / Nixon's Head 2012 
Streetwiseguy wrote: I love the statements, both said with a straight face:: "The price of crude went up, so we had to raise our prices to reflect the higher cost." "The price of crude went down, but we have older, higher priced crude in our system that we have to sell first."
Seems like those statements are in sync with a LIFO accounting system.
Oil prices go up----- we get screwed
Oil prices go down---- we get screwed
pretty easy to understand isn't it?
An interesting comparison someone pointed out was that plastic an entirely oil based product, and yet you don't see the price of plastic goods change with every swing of the price of crude.
I understand the speculation and futures are involved, but it seems to be rigged so that if you buy too high a future, the market holds out after the crude prices drop so that you can get your money back. Seems like there never are any loosers (well...)
I do know that gas has a comparatively slim margin (of course a HUGE market) but it does seem a bit silly how the pricing works.
With gas, the slim margin is at the retail end. The middlemen have themselves covered. 5% margin gas is how to draw people into a convenience store so they will buy 200% margin Slurpees, beer, those hotdogs on rollers and candy.
mmmm, roller hotdogs...
AngryCorvair wrote: mmmm, roller hotdogs...
I unfortunately had to resort to those the other day. 
This is fairly civilized so far. Keep it that way.
Curmudgeon wrote: so they will buy 200% margin Slurpees, beer, those hotdogs on rollers and candy.
Or the best, 1000% bottled water 
Tom Suddard wrote: This is fairly civilized so far. Keep it that way.
Close photoshop and get back to work, intern.
Tom Suddard wrote: This is fairly civilized so far. Keep it that way.
Was it the roller hotdogs?
I think it has more to do with the value of the USD globally, and the fact that day to day fluctuations don't affect what the gas station pays for their sometimes weekly delivery, you have to pay for what is in the ground before you order the next batch.
I could be totally wrong, if I am, just ignore the post, :) .
The roller hot dogs are fine cuisine compared to those roller cheeseburgers they offered for awhile.
This flowchart shows how crude oil speculation works.
flountown wrote: I think it has more to do with the value of the USD globally, and the fact that day to day fluctuations don't affect what the gas station pays for their sometimes weekly delivery, you have to pay for what is in the ground before you order the next batch. I could be totally wrong, if I am, just ignore the post, :) .
At this point, it is almost entirely based on what the market will bear.
"What the market will bear" is what it all boils down to. All that supply and demand stuff only has any effect when there's A LOT of stiff competition, not a handful of oil companies, with one half in OPEC and the other half colluding anyways.
^Great flowchart BTW.
Zomby Woof wrote:flountown wrote: I think it has more to do with the value of the USD globally, and the fact that day to day fluctuations don't affect what the gas station pays for their sometimes weekly delivery, you have to pay for what is in the ground before you order the next batch. I could be totally wrong, if I am, just ignore the post, :) .At this point, it is almost entirely based on what the market will bear.
It seems more like it is "Whatever the Hell we want to charge" not what the Market will bear.
Iphone's are priced based on what the market will bear. Charge whatever Apple wants until its to high that their market share goes down.
With Gas/Oil there is not alternative so whatever they charge we will pay. Demand is fairly inelastic compared to pricing.
This isn't a political debate, it's a private industry debate.
nocones wrote: It seems more like it is "Whatever the Hell we want to charge" not what the Market will bear. Iphone's are priced based on what the market will bear. Charge whatever Apple wants until its to high that their market share goes down. With Gas/Oil there is not alternative so whatever they charge we will pay. Demand is fairly inelastic compared to pricing.
There's still a top price people will bear because there isn't truly a lack of choice. If gas were to get so expensive that the big up-front cost of an electric car didn't seem so bad, they'd lose market share. If it got so expensive that there was big potential for biofuel producers to profit they'd lose market share. If it got so expensive that nuclear conversions on large ships seemed like a good option they'd lose market share.
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