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Old 09-05-08, 05:09 PM   #1
daredevil
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oil down 27%, you coulda fooled me!

We're still paying $4 a gallon where I live. Why do the prices at the pump never come down to previous levels? We should be paying the same as we paid last April. I don't recall how much that was but it sure as hell wasn't $4 a gallon. Can anybody explain in a "gas prices for dummies" kind of way?
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Old 09-05-08, 05:30 PM   #2
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If the price of a barrel of oil changes, you wont see an immediate change of price at the pump.
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Old 09-05-08, 05:32 PM   #3
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The oil that was bought at that price still has to be processed.

Give it a few weeks.
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Old 09-05-08, 05:37 PM   #4
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If the price of a barrel of oil changes, you wont see an immediate change of price at the pump.
right...I think that point was made already. They go up immediately with the rise in the price of a barrel of oil and come back down slowly regardless of how fast the price drops.

So let's say this current price remains consistent. How long before we would return to April prices at the pump? Ever? I'm thinking no.
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Old 09-05-08, 05:48 PM   #5
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No, we're never going to go back to the earlier prices. Ever. The price at the pump may come down a few cents and stabilize for a few months, but it won't go down far, and it WILL go up again. But people only see the "it's going down right now" part and don't really notice that it didn't go down much.

Just keep riding...
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Old 09-05-08, 05:52 PM   #6
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... wouldn't have noticed, I don't think I've bought gas for at least 3 weeks now. No longer bugs me that gas costs so much because I just stopped buying it
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Old 09-05-08, 09:08 PM   #7
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... wouldn't have noticed, I don't think I've bought gas for at least 3 weeks now. No longer bugs me that gas costs so much because I just stopped buying it
I live on campus in a fairly rural college, there is no gas station within walking distance; I have no idea what the price of a gallon is now. Still, you and I are both still affected because higher energy costs has contributed to inflation.
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Old 09-05-08, 09:24 PM   #8
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If the price of a barrel of oil changes, you wont see an immediate change of price at the pump.
Depends on where you live. We shouldn't see an immediate change, but that isn't how it necessarily works. We have regular ranging from $3.29 to $3.55 per gallon around here. I expect it will be another week or so before it goes down any more due to rigs and refineries being shut down for a couple days when Gustov blew through.
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Old 09-05-08, 09:29 PM   #9
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Still, you and I are both still affected
Exactly. If I don't drive a mile this year, gas prices still matter.
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Old 09-05-08, 11:06 PM   #10
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The price of oil only accounts for about half of the price of a gallon of gas. State, Federal, and Local Taxes, transportation, local supply and demand, regional supply and demand, national supply and demand, weather along shipping routes from Europe, and so on, also play a factor.

You may not know this, but we consume nearly 400 million gallons per day of gasoline, but only have enough refinery capacity for about 75 million of those gallons. We import the rest from other countries, so prolonged weather along shipping routes, particularly from Europe, can drive down supply very quickly.

If you don't live near a refinery (The Delaware River Basin, The Mid Atlantic Coast, Gulf Coast, Mississippi river feeder areas in the midwest, Prudhoe Bay Alaska, etc), you will be paying more for gas as well, and for a longer period of time after oil drops.
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Old 09-06-08, 08:17 AM   #11
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The price of oil only accounts for about half of the price of a gallon of gas. State, Federal, and Local Taxes, transportation, local supply and demand, regional supply and demand, national supply and demand, weather along shipping routes from Europe, and so on, also play a factor.

You may not know this, but we consume nearly 400 million gallons per day of gasoline, but only have enough refinery capacity for about 75 million of those gallons. We import the rest from other countries, so prolonged weather along shipping routes, particularly from Europe, can drive down supply very quickly.

If you don't live near a refinery (The Delaware River Basin, The Mid Atlantic Coast, Gulf Coast, Mississippi river feeder areas in the midwest, Prudhoe Bay Alaska, etc), you will be paying more for gas as well, and for a longer period of time after oil drops.
Now there is the kind of information we've come to expect from BF.
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Old 09-06-08, 10:06 AM   #12
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The price of oil only accounts for about half of the price of a gallon of gas. State, Federal, and Local Taxes, transportation, local supply and demand, regional supply and demand, national supply and demand, weather along shipping routes from Europe, and so on, also play a factor.
As a trader, I keep track of the {commodity market price/ pump retail price** which "usually" hangs at about a .60 cent spread.

Back around March, gas was 2.40/gal on futures, and 2.60/gal at the pump, a .20 spread, which was real unusual. By August it went to about 1.20, and is currently about 1.00, so they (middle men) seem to making up for the former .20 spread, rapidly.
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