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Yea, oil is down 15$ a barrel in 2 weeks, yet the price at the pumps is still the same. Now they issue a press release about it tonight. Why does it only take 12 hrs to jack the price at the pump up, yet it takes a month to drop the price one penny? Only in America folks. Crooked, greedy, and unethical American businesses at their finest.
They are quick to jack up the price because the exisitng inventory in the tanks must be sold for enough so it can be replaced at the new higher price. No such condition exists on the way down, only competitive pressure to turn over inventory faster would drive the price down.
Lets try an example. I have gas in the tank, I payed 3.55/gal and I am selling it for 3.60. Now my price goes up to 3.65. Do you think will continue to sell at 3.60 when I must pay 3.65 to restock! No, I will keep my margin and sell for 3.70, restock at 3.65 and keep the .05. On the way down, only competition or a need for quick inventory turn will drop the price.
Gasoline and other fuels should be priced at whatever the market will bear. The problem is, the taxes on top of the fuels have caused a massive distortion in the market's ability to price these items. The slow declines are a major profit-taking opportunity for fuel companies as well as the government.
I watch the oil futes like a hawk. There is a close correlation between rises in oil prices and rises in prices at the pump. As already noted, the corresponding fall in prices does not lead to an equal correspondence in pump prices, at least, not as immediate. I have always wondered why gas station prices would reflect any short term moves in oil whatsoever.
A free market in fuels would not have these huge spikes and slow declines.
My Dear Friend,
Gasoline and other fuels are priced at whatever the market will bear. Station A selling premium unleaded @ 3.69/gal will have more business than Station B selling @ 3.79/gal, all things being equal and if they are in close proximity.
I too watch the crude futures like a hawk. I trade them for a living. I am a speculator. As for your curiosity as to why priced do not fall as fast as they rise, your answer is eloquently explained above. Re-stocking costs vs. cost in the ground.
And we do have a free market in fuel. You are free to drive 20 miles to save a dime if you choose.
Regards,
H.
There is a major potential in this country to produce retail market of fuel on a national level & that is coming hopefully very soon. When done, the key to gaining market share will be to respond to oil wholesale prices as they happen to capture and retain national market share.
My best guess is this can be done with a budget that is at this point very possible with the ideal partners.
The key is to provide all alternative fuels as well as current fueling options. This will happen and prices will come down because they MUST.
The SAD truth is it is long overdue. As for TAXES on fuel. They go to build the roads which we need to drive on, the last time I looked.
"As for TAXES on fuel. They go to build the roads which we need to drive on, the last time I looked."
Now THAT is funny.
This takes oil priced in Dollars off the market -
http://www.forexyard.com/en/news/China-looking-to-make-more-loan-for-oil...
http://en.wikipedia.org/wiki/Tiananmen_Square_protests_of_1989
http://www.freetibet.org/
The last partner I would want on any energy play. Once upon a time, this nation stood for all that was right in this world.
Look how far the mighty have fallen.
And Yet, United We Stand. There now is the People's Party & the Banksters Party, Which side is your elected bunch on?
talking of oil, is there any way out for the oil out of GOM other than the Keys ?
one way or the other LA, MS, AL, FL, parts of Texas and Mexico shorelines are in deep trouble?
EURUSD / EURJPY continues to show buying support on intra day chart.
EURGBP daily chart gives mild bullish warnings.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1