Gas Prices part Deux | FerrariChat

Gas Prices part Deux

Discussion in 'Other Off Topic Forum' started by racerx3317, Sep 12, 2005.

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  1. racerx3317

    racerx3317 F1 Veteran

    Oct 17, 2004
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    Luis
    Can anyone explain why the **** gas prices haven't come down at least a little? Crude oil is down to about 63 bucks and dropping about 70 cents a day. The price at the pump is not reflecting this at all yet. WTF?
     
  2. Dan Ciezniewzky

    Dan Ciezniewzky Formula 3
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    Sep 6, 2004
    1,351
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    cause they're gready b@stards!!! nothing more

    fill up and drive off, you'll feal better and it'll equal out just a tad bit....oh and cover your plate and wear a hat ;)
     
  3. RacerX_GTO

    RacerX_GTO F1 World Champ
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    What is this "blame the oil companies" ?

    Two things coming up, the gasoline supply problem and winter blend. If the USA had constructed enough refineries to meet growing demand, the gasoline supply would be plentiful, however, the extremely tight environmental policies of this country have demanded that the environment come first, over gasoline energy supply and therefore, we do not have enough refineries to process oil into gasoline.
     
  4. racerx3317

    racerx3317 F1 Veteran

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    While that may be so it doesn't explain why crude oil has gotten cheaper and we are still charged the same as when crude oil was at almost 70 a barrel
     
  5. RacerX_GTO

    RacerX_GTO F1 World Champ
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    Ok, let me see if I can explain this another way... Oil supply is not the problem, it's there no doubt about it. We are not filling our cars up with crude oil. Turning it into gasoline... the gasoline supply... having enough gasoline to go around is the problem.
     
  6. SrfCity

    SrfCity F1 World Champ

    No heat from the Feds = status quo and rising

    Cost to produce has not gone up but the price at the pump sure has.
     
  7. SrfCity

    SrfCity F1 World Champ

    The oil companies closely control supply and thus the price. Why? Cuz they can. There hasn't been a new refinery built for 30 years.

    It'll probably take teetering into a recession for the Feds to act on prices.
     
  8. MS250

    MS250 Two Time F1 World Champ
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    Dec 10, 2003
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    I would say depression...for them it would be a recession. You know the old saying.

    "If your neighbour loses his job its a recession, if its you, its a depression "
     
  9. Horsefly

    Horsefly F1 Veteran

    May 14, 2002
    6,929
    A depression is when you tighten your belt. A depression is when you eat your belt. (Hey, it's leather. Sautee in butter with a little pepper sauce.)
     
  10. Mario Gonzalez

    Mario Gonzalez Formula 3

    Apr 13, 2004
    1,333
    Out of my mind
    because it's a monopoly plain and simple...
     
  11. Eric5273

    Eric5273 Formula 3

    Dec 6, 2004
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    All the oil companies are posting record profits. They are increasing their markup on gasoline.
     
  12. PeterS

    PeterS Five Time F1 World Champ
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    Jan 24, 2003
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    There is one silver lining on the high gas prices. The IRS just bumped the business mile deduction to $.485! I drive about 45K miles per year on business. That's a $21,825 deduct off my taxes Vs $18,225 at the old rate (Which is still a deal!). My 4Runner gets 18 MPG. That's 2500 gallons. At $3/Gallon, that's $7500. In my tax bracket, my gas expense is almost free!


    IRS Increases Mileage Rate Until Dec. 31, 2005


    IR-2005-99, Sept. 9, 2005

    WASHINGTON – The Internal Revenue Service and Treasury Department announced today an increase to the optional standard mileage rates for the final four months of 2005.

    The rate will increase to 48.5 cents a mile for all business miles driven between Sept. 1 and Dec. 31, 2005. This is an increase of 8 cents from the 40.5 cent rate in effect for the first eight months of 2005, as set forth in Rev. Proc. 2004-64.

    “This is about fairness for taxpayers,” said IRS Commissioner Mark W. Everson. “People are entitled to deduct the real cost of operating a vehicle. We’ve responded to the recent gas price increases by making this special adjustment so taxpayers get the tax benefit they deserve.”

    In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2005. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

    “With many predicting a decline in gas prices over coming months, we will hold off on setting the 2006 rate until closer to January,” Everson said. Next year’s rate could be lower than 48.5 cents.

    While gasoline is a major factor in the mileage figure, other items enter into the calculation of mileage rates, such as the price of new vehicles and insurance.
     
  13. PassionIsFerrari

    PassionIsFerrari Formula 3

    Aug 15, 2004
    2,454
    Nice find...Gotta love a silver lining...

    too bad the rest of us 99.9% are getting clobbered over the heads. Next round of drinks is on Peter.
     
  14. PeterS

    PeterS Five Time F1 World Champ
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    Don't think I don't feel $3 a gallon. I would rather have the extra $250 a month in my pocket than wait until I get my tax return to recoup it! For anyone in field sales or is in a position to justify the taking the writeoff, this is a good thing. I'll buy a round of drinks for you in March of '06!
     
  15. ross

    ross Three Time F1 World Champ
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    Mar 25, 2002
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    once again the lack of knowledge on this part of the economy is staggering.

    the oil companies take crude and make it into gasoline. the gasoline is priced to go to the stations at a formula which is roughly nymex+logistic and handling cost+small margin (3-10cts). the gas station owner then tacks on his own costs and another small margin like 3-8cts. none of this is price gouging or manipulation.
    the price on the nymex is set by the market, and in this case the market means traders, banks, hedgers, and to a small extent oil companies but they are far less of the volume than the others.

    the reason the oil companies are posting huge profits is from 2 sources: from the ground to the market, and from crude into products. so lets focus on the refineing margin - it is massive. but once again it is due to the delta between nymex crude and nymex mogas prices (roughly of course since there are spec and location variations). at the root of this massive delta is the fact that no refinery has been built for 30+ years because of nimby. all of these oil companies have built refineries elsewhere, just not enough and not in the usa.

    why have the prices not fallen at the pump at the same rate as they went up? there could be many explanations for this. it could be plain old greed by the independent gas station owners. the price of nymex mogas has plummetted in the last 5 days so the price at the pump should have dropped considerably, but maybe lagging the futures slightly.
    however it depends on the formula at which the retailer buys his supplies form the refiner. you will notice that my rough formula above does not say over what time the nymex price is evaluated - so it could be the previous month average, the present month average, next months average, or a combo fo all these time periods, which has a tendency to make for steeper up moves than down moves.

    in general the energy woes in our country have been our own doing - not the refiners. and by our own i mean the environmentalists who won't allow refinery construction, the senate who doesn't increase CAFE standards, our population's desire to drive SUV's without the need to do so.
     
  16. racerx3317

    racerx3317 F1 Veteran

    Oct 17, 2004
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    While i do agree with all that you said, the question i have has nothing really to do with that. The gas prices spiked while all the standards which you so eloquently described were in place. The soaring cost of crude oil was blamed for the spike. Now that crude oil has dropped, the prices have not come down as well. While the oil companies will blame hurricane Katrina, it doesn't detract from the fact that they are pissing in our faces and saying it's raining. Highway robbery is what it is.
     
  17. PeterS

    PeterS Five Time F1 World Champ
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    Are you the President of a large oil corporation?
     
  18. Ashman

    Ashman Three Time F1 World Champ
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    Interesting: crude oil supplies were down, but gasoline supplies were up according to Bloomberg. I snipped the first part about crude but you can see the entire article here:

    http://quote.bloomberg.com/apps/news?pid=10000006&sid=aC1J_RvI8jb4&refer=home

    Crude Oil Futures Rise After Report of Falling U.S. Inventories
    Sept. 14 (Bloomberg) –
    <snip>

    Unexpected Gasoline Gain

    Gasoline supplies climbed 1.9 million barrels to 192 million, the first rise in 12 weeks, according to the report. A decline of 2.2 million barrels was expected. Consumption fell for a third week, the report showed. The period covered by the report included Labor Day, the end of the peak-demand driving season.

    ``Gasoline demand dried up over the Labor Day holiday,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. ``Americans were shocked by $3 gasoline and were glued to their television sets watching the devastation in New Orleans, cutting consumption. In the South there were tight supplies and shortages, which may have also played a part.''
    Gasoline for October delivery rose 4.34 cents, or 2.3 percent, to $1.935 a gallon. Prices jumped to $1.945 before the release of the report. Gasoline reached $2.92 a gallon on Aug. 31, the highest since trading began in 1984. Futures are up 56 percent from a year ago.

    Pump Prices

    Regular-grade gasoline, averaged nationwide, fell 2.1 cents to $2.935 a gallon yesterday, according to data released today by the AAA, the nation's largest motoring organization. Prices have declined 4 percent since touching a record $3.057 on Sept. 2. Pump prices are 61 percent higher than a year ago.
    The state with the most expensive gasoline is Hawaii, where a gallon averages $3.457, according to the AAA. Prices in Hawaii and California are usually the highest in the U.S. because they are isolated markets and in the case of California have strict environmental regulations. Last week the highest prices were in the mid-Atlantic states because of storm-related disruptions.
    The lowest pump prices are found in Mississippi, where a gallon averages $2.637. Prices are usually lowest in the Gulf Coast and in the Lower Atlantic states because of the proximity of supplies and low taxes.


    John
     
  19. ross

    ross Three Time F1 World Champ
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    i tried to answer your question. this goes back to something i wrote in the old p/r section about the talking heads not really telling you the right story - it is not the price of crude on the nymex that will affect your pump prices directly - it is the price of mogas.
    btw, most gas stations are franchised, in other words, they do not belong to the oil companies that you hate so much, they simply have a branding agreement with them. many times, depending on the location, the gasoline that every station in town has comes from the same depot along a pipeline - ie its all the same and doesn't even come from the oil company's own refinery.

    no peter, although that would be nice. i am a lowly trader but i know how the systems work because i am in the industry. much like you probably know the real way that your industry works.

    ashman, yes the apis showed a build, and a bigger one than the doe's. my guess is that it shows a demand reduction in the 3 states that were affected, and perhaps beyond that due to the higher prices.....finally some price elasticity of demand showing through ! if you follow these stats, expect to see quite a bit of stock building over the next few weeks as euro imports pick up - this should also lead to significantly lower prices at the pump.
     
  20. PeterS

    PeterS Five Time F1 World Champ
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    This thread is so full of crude remarks.........
     
  21. Ashman

    Ashman Three Time F1 World Champ
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    That's to be expected when you get up oily every morning!

    John
     
  22. coolestkidever

    coolestkidever F1 Veteran

    Feb 28, 2004
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    SWEET! Filled up for 2.90 today and no line
     

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