What's wrong with this picture?

[no_hypocrisy]

Yesterday it was reported that the Saudis would make the case for more production of oil at the next OPEC meeting. Consequently the price of crude fell below $40.00. Today, the price at the corner gas station increased 9 cents per gallon.

Is there some theory in economics that I missed when I went to the bathroom? To borrow from A Might Wind, "Whahuppened?"

[trof]

1. Considerable lag

I read somewhere their is quite a lag between increased oil flow and gasoline production.

[no_hypocrisy]

2. Okay. I'll buy that, so to speak. What about the price of crude going

down yesterday? Wouldn't that effect the price at the pumps today? Or is the standard of value based solely on inventory? I thought speculation had SOME influence.

[trof]

3. We just hit an area I know little about.

I think the lag in price adjustments was something like weeks.
If you want to really scare your ass off, google "peak oil".

[no_hypocrisy]

4. Putting on my Depends as you read this . . .

[PDX Bara]

7. Depends...

This is so funny and so very apropos. This is a big reason why I'm addicted to DU - the level of intelligence combined with a sense of humor is absolutely addictive.

[rfranklin]

5. The oil companies are always ahead of the curve...

They do not base their pricing solely on what a barrel of crude was yesterday. They factor in supplies on hand, refinery capacity, etc.
They have no obligation to lower the price because there is a blip in the bids on a particular day.

[whistle]

6. Sum it up in one word, "Greed"....

...other words or phrases might include: rip-off; price gouging; cartel back room price fixing; anti-trust violations; profiteering; just to name a few. The BushCo people and reThuglicans will say it free market forces taking their course.

I suppose we could fight this by just putting our cars up on blocks and walking or taking the bus. Now let me see, the next bus in my neighborhood that runs to the destination I have to go to today will come by at 3:40PM today. I have to walk 1/2 mile to the nearest bus stop, I have to transfer twice and will make by destination by 5:36PM just in time for it to close. Oh, my auto insurance went up $200.00 this year for no reason what-so-ever and guess what, the other companies rates went up too! Fancy that. My raise this year....zero. Economy is doing just fine, for someone.

[WVhill]

8. Do some research on refinery capacity in the US.

Compare the number of refineries that have closed since 1970 to the number that have been expanded or built. The higher insurance rates are due to a big extent to the stock market losses the insurance companies incurred following the dot-com implosion and 9/11. Guess who gets to make up the losses? I hope you enjoy bending over and grabbing your ankles.