Crude Plunges, But Someone Tell The Gas Stations And Refiners: Average Price Of Regular Rises By 2.2 Cents Overnight

Tyler Durden's picture

Once again someone forgot to tell gas station operators that the CME is doing all it can to generate a feedback loop which kills commodity prices and general price stability (price plunges, vol surges, leading to margin hikes, leading to more plunges, leading to even more vol and even more margin hikes, etc). After gas prices rose by about a cent yesterday, the rise according to AAA continues, with average gas prices on the verge of a post 2008 high, even as crude prices have taken a nearly $20 hit in the past two weeks. Yesterday the average regular price was $3.984, up from $3.962 yesterday, and unchanged from a week ago.

Yet for all fools who believe the administration will buy such nonsense as "sticky prices" we have a message for you: it won't. After Holder was removed from his carbonite cryogenic bath, when over 3 years we heard absolutely nothing from him, and is now running around shooting oil "speculators" (but not the money printer, never the money printer) with impunity, NBC Washington reports that the DC AG has launched a criminal investigation into a "suspicious" 25 cent price jump. Because there are no trillion dollar crimes on Wall Street....


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jkruffin's picture

The oil crooks did the same thing in 2008. This is the sign that the collapse is coming real soon.  Everything we seemed to not have learned as a country are repeating exactly in the same form as the 2008 crisis initiation. 


Look out below!

Quinvarius's picture

Their hedging losses need to be covered now.  The commodities intervention probably made the problem worse.

SheepDog-One's picture

Central planning always makes the problems worse, I dont care what Keynes taught all these clowns.

Xibalba's picture

Yet ANOTHER diversion between the bankers paper and the phyz.

holdbuysell's picture

Speaking of crimes with a T in them, I haven't heard a peep out of the MSM regarding the imminent debt ceiling breach nor Rolling Stone's tour de force article.

What gives?

tmosley's picture

Not imminent.  Past.  As in already happened.

LawsofPhysics's picture

Just more disconnection between the paper world (which is now on fire) and the physical world.  Yeah, your 401k will provide you with a quality retirement, bah ha ha ha ha.

firstdivision's picture

Didn't the same thing happen in '08?  As I recall, oil was in free fall while pump prices were static.  Per usual though, it will take a bit for prices at the pump to fall, even though refiners did not buy oil at the elevated prices.

Johnny Lawrence's picture

Amazingly, it seems like gas stations will increase their prices intra-day, but when it comes to lowering the price, it takes them longer.

firstdivision's picture

First rule of gas prices, they're elastic upwards but inelastic downwards.

Urban Redneck's picture

That could be eliminated by CME sharing insider information about pending margin hikes with all the small business owners who own gas stations and have to forward purchase inventory all the way up, instead of sharing it with the institutional speculators who own the exchange.   

chunkylover42's picture

I'm skeptical that would make much difference.  The inventory gas stations have on site was purchased at the old prices which are much higher, so of course prices are going to remain high despite the plunge in crude until they get restocked at the new, lower prices.

pan-the-ist's picture

Then explain the converse - why do the gas stations raise price on gasoline bought at a lower price?

chunkylover42's picture

Because when oil goes up they are about to be squeezed if they do nothing.  One dollar of profits won't buy the quantity of inventory that it used to, so they expand margins with a higher price to re-stock.


NOTW777's picture

look at silver gyrate around

Long-John-Silver's picture

Snakes do the same thing after you cut it's head off. Has the Comex lost it's head?

tmosley's picture

Infinite volatility, paper will trend towards zero as confidence in the system is lost, culminating with a COMEX default (and/or LBMA default, not necessarily in that order).

Sudden Debt's picture




The Axe's picture

crazy trading in the

LoneStarHog's picture

Isn't it obvious that this station is owned and operated by someone in Congress?

Baptiste Say's picture

How can average prices stay so high? I know markets are not efficient but generally competition destroys margins like these pretty quick.


Could there be a minority but significant percentage of refiners/chains who bought crude/gas at high prices and are skewing the average?

chunkylover42's picture

saw your post after I posted (essentially) this above:

Gas stations still have inventory on site that was purchased at higher prices, so until that is depleted prices will stay high despite the plunge in crude.  As they refill at the new lower cost, gas prices will come down.

Quinvarius's picture

That is what happens when you put the refiners hedges into the loss category with some BS interventions.  They still have to make those losses back.

Long-John-Silver's picture

Raise the margins! Raise the margins! Raise the margins!

Sound effect: General Quarters Gong sounding in background with explosions.

SheepDog-One's picture

Last acts of desperate men seeing their power and controll slipping away...RAISE the MARGINS! And people think this will be the new normal? Ham fisted central planning making the old Soviet Union look free and unfettered by comparison?

Stoploss's picture

WTF, Did they think gas was going to go down after hiking refiner margins? Obviously it was an excellent decision, we shall now have 6$ a gallon gas and 60$ barrell of oil. This will go over well with the serfs.

SheepDog-One's picture

Exactly, we could have $60 barrel of oil, and be seeing $6 at the pump...central planning FAILS it never works!

TradingJoe's picture

A well orchestrated "bounce" will leave all "speculators" empty handed :))!

RobotTrader's picture

Gasoline will be back down to $3.50 by Memorial Day, $3.00 by Labor Day

This is the most successful "inflation bashing" event we have witnessed since the 2008 crash.

Notice how KSS is skyrocketing up today, along with other retail names.

SheepDog-One's picture

Oh I thought you just placed your bet on $2.50 an hour ago....RBOB UP^! Pressure cooker blowoff coming you cant alter reality by placing fines and tolls on it. 

PS- Retail sales plunge.

LRC Fan's picture

Why fight the Fed and regulators in the short term?  Long term you're 100% right but for the next few weeks, at least, commodities are going to plunge.  Fight the trend at your own risk, and prepare to be vaporized in short order. 

LRC Fan's picture

Agreed, in the short term (possibly up to November 2012) this is the trend.  They will continue to beat the hell out of gold/silver/oil to try and beat down inflation that the people will notice.  It will end horribly, with mass chaos, but it will "work" enough to probably keep Obama in the White House for 4 more terrible years. 

Anyone who junks your post is a fucking idiot. 

Look out below in any and all least on paper.  I wouldn't be surprised to see crude at $80 in a week or two.  However, and this is important, continue loading up on physical silver/gold the entire time.  That is all. 

SheepDog-One's picture

Keep all the plates and chainsaws juggling for 18 more months in the face of world economic meltdown? They can hardly do it one day to the next now without disaster flash crashes and such. Never happen, everyones idea this is all about a far-off 'election' is ridiculous.

DaveyJones's picture

we can juggle plates, but we cant juggle china

Long-John-Silver's picture

Obama in the White House for 4 more terrible years.


He will complete the destruction of this 50 (or was it 57) state nation.His promise of "fundamentally changing" America will happen.

This is Soviet Union disintegration II. Texas will go first followed immediately by the old Confederate States because they never officially rejoined the Union after the signing of the cease fire. Other States will break off following internal rebellions.

lizzy36's picture

And with that bashing, comes a flight out of equities, and the $1T spent for #wealtheffect........and its gone.

LRC Fan's picture

Obama needs prices at the pump to fall before Memorial Day.  The closer to $3.50, the better.  It will help keep him "on a roll" after the birth certificate and catching Osama.  People don't give a fuck about crude, they want to pay less at the pump.  Obviously it will end in disaster, but as long as they can kick the can a bit more, hopefully for them past 2012, all will be well. 

So, I think more margin hikes are coming this week and next week.  I think crude will take another leg down.  They have basically telegraphed this.  Obama is openly waging "war on speculators."  The limits on crude doubled yesterday.  You think that was just for fun?  It's sort of like the SLV $25 July put.  That should have been a huge fucking red flag for all the paper longs.  I think it's the same here...oil is going to plunge, soon, so prices at the pump fall just in time for Memorial Day.  Obama even mentioned it yesterday, saying Americans don't need to pay higher prices at the pump around Memorial Day driving season.  He's putting it all out there in the open, yet no one listens.  They keep trying to catch a falling knife. 

So, I'm buying some out of the money May puts on USO.  Counting on Obama and the CME to manipulate this shit asap and make me some money. 

SoNH80's picture

You are quarterbacking a football game, but the stands are on fire.

DaveyJones's picture

and the hotdogs are poison

gratefultraveller's picture

Same story in silver. Over here in Europe spot prices plunged from over 33 € to 22.70 €, yet silver Philharmonics on ebay hardly budged from their price around 33 €. Obviously people are not buying the market/government BS.

Evidence of people waking up can also be found in the (heavily censored, btw) forum of Der Spiegel, where the ratio of "conform" vs. "non-conform" postings used to be 95% to 5%, whereas now it is the inverse.

Today a columnist in der Spiegel indicated that a recent poll showed that:
- 70% (!) of the interviewed think Germany gives to much money to the rest of Europe
- approx. 50% want immigration to be reduced drastically
- 38% think Islam is not part of german lifestyle and that it menaces german values
- 30% want an "independent Germany without the Euro, and without EU interference"

Yet, face to the growing and ever more transparent and sometimes even desperate globalist propaganda spewed forth by the MSM, the awareness of the people in the street is growing, as the PTB/PTW smokescreen does not resist the impact of real life experiences at the cashier and the pump.

To say it with Bertold Brecht "Would it not be easier in that case for the government to dissolve the people and elect another?"

speedy's picture

"yet silver Philharmonics on ebay"


Ebay is a poor source for spot prices.



Long-John-Silver's picture

So is the Comex. Physical spot has decoupled from paper spot.

mtomato2's picture

Those are definitely real.

speedy's picture

More real than the price of silver on the comex.


kaiserhoff's picture

Great avatar.  Women's lib to believe in;)

The Count's picture

I lived in Austria and speak German fluently. The Germans are still suffering mentally from decades of Socialist mindfuck. But people like Theo Sarazin show that the folks are awakening much faster than the power elite would have ever imagined.

Bob Sacamano's picture

Just read the financial statements of any c-store operator.  Their gas margins shrink as prices go up (maybe as low a 5 cents per gallon) and margins widen when prices go down (maybe as high as 20 cents per gallon), but over any intermediate term (3-4 quarters) gas margins average 12+/- cents per gallon over the very long run. 

This is not some big oil company conspiracy (understanding conspiracies lurk in every corner and riddle every sector of our economy). Most gas stations are not operated by big oil despite whatever gas flag they may fly.  And oil prices are only part of the equation since cars prefer oil that has been refined.

For those who think the profits are "obscene" I would suggest getting in the gas station business.  You'll see.

SoNH80's picture

No one here is blaming Apu's Convenience Store.  The blame is squarely on (1) the Federal Reserve, and their friends, the money-center banks, for debauching the currency; (2) the corn-ethanol lobby, and their moron Congressional and Iowan cadres (NOTE:  poor corn harvest this year, especially in light of Mid-American floods--- higher prices already, more hikes to come-- and 10% of our gasoline is Ethanol, aka corn); (3) our idiot foreign policy establishment, for its constant whacking of the ME-NA hornets' nest; (4- infinity), I could go on and on.  The lunatics are running the asylum now, and we get to be screwed every time we go to the pump.

SoCalBusted's picture

The corn part is a big deal, look for food prices to go up even higher.