OK, yesterday the Shell station had regular gas for $1.49 and at noon today, it's $1.79. Why?

[sinkingfeeling]

[Skink]

1. Obama arrived on Capitol hill.

and there's a new congress in town.

[NashVegas]

2. I Assume the Gaza Situation

Has some people speculating.

[ipfilter]

3. Gasoline futures are up today.

The gas station must charge for what it will cost to replenish its supply at future prices and not what they paid yesterday.

Actually, gas futures have been on a slight upward trend for the past week.

[w4rma]

12. The speculators are speculating. (nt)

[sandnsea]

31. Exactly

And yet look at the thread and everybody buying into the bullshit that allows them to get away with $100+ oil.

*sigh*

Politicians can't fix people buying into the same lines, over and over and over.

[ipfilter]

35. What "line" am I buying into?

Gas prices are discovered by market forces, i.e. supply/demand and are traded on the NYMEX. You can see the futures right here.

http://finance.yahoo.com/q?s=RBG09.NYM

Add in the federal, state, and local taxes, some markup, and you can track gas prices every day. If RBOB goes up $0.10 you can bet the price at the pump will follow almost to the penny. I have never seen the price of gas at the pump go up without a corresponding increase in the RBOB futures and I track this every day. The futures price is up ~$0.27 from before Christmas and so is the price of gas.

Back in the summer when gas prices peaked the RBOB future price was around $3.80.

[sandnsea]

45. "market forces" = speculation

If pure market forces, without any speculation, were at play, prices would barely fluctuate at all.

[spanone]

4. israel attacks gaza...instability in the middle-east

[soulcore]

5. Greed. n/t

[endarkenment]

6. Your station had a new delivery and the price went up.

Energy prices are going to continue to fluctuate wildly. Any increase in demand is likely to resume the upward spiral.

[sandnsea]

14. That should be investigated

I've seen this happen when I know damn well there were no deliveries, this is a small town. We need to have investigations to make these gas stations be honest.

[endarkenment]

21. I suspect that they are allowed to charge whatever they want.

There are no price controls in effect that I know of.

[sandnsea]

29. They are not allowed to gouge

I think all states have some kind of regulation in place to prevent gouging.

[Selatius]

40. They do. Even here in the ultra-conservative state of Mississippi, there are anti-gouging laws.

These laws really showed their teeth in the aftermath of Katrina. A lot of gas stations were marking up their prices several hundred percent to take advantage of desperate people. Those were some dark and terrible days.

[RB TexLa]

30. There are controls in most states, 30 or so states have a minimum mark up per gallon of gas

Louisiana it is 4 cents over cost. I know a guy who got a $5,000 fine for violating it last year.

[Statistical]

41. Not exactly

Gas stations charge based on REPLACEMENT PRICE.

They update their prices daily (sometimes 2-3 times per day in fast moving markets) to be REPLACEMENT COST + PROFIT MARGIN (usually less than $0.10).

Oil Futures are up.
Spot price of oil is up.
Gasoline Futures for Feb delivery are up ($0.18 today)

Gas station isn't going to sell you a gallon of gas for say $1.49 when their cost to buy a replacement gallon from their supplier is now $1.62.
Why would they?

Prices are totally unrelated to delivery schedule.

[TheCowsCameHome]

7. Screw the consumer Monday special.

You won.

[leftofthedial]

8. it will be as high as they can make it until Jan 20th.

the big-oil gravy train has derailed near Chicago.

[pampango]

20. I think the opposite will happen. Since gas prices traditionally rise in the spring,

peak in summer, fall in the fall, and bottom in winter, gas prices should start to rise soon after Obama takes over. At least that is much more likely than the speculation that gas prices were being kept low prior to the election to help repubs and would skyrocket right after the election so that the oil companies would recoup their losses and then some.

Rather than see gas prices fall after Obama takes over, they will probably rise and we'll see speculation here that it is the oil companies trying to make Obama look bad (which they would, indeed, enjoy). :)

[Rebubula]

32. I doubt

That Big Oil's gravy train has fully derailed.

There may be some limits or restrictions put into place, but Washington is still ruled by the almighty $$$$.

President Obama can only do so much...

[PVnRT]

9. Random number generator

[SammyWinstonJack]

10. .

:spray:

[rurallib]

17. why does the random nuber generator have 9/10s on every number?

I still get a kick out of that .9 cents. Gas isn't $1.79 it is $1.799.

[pl259]

33. It was invented years ago by the CEO's wife...Millicent Shell

;-)

[Terry in Austin]

37. Also inventor of a famous game

:toast:

[pl259]

38. LOL...yeah, that nobody can win!

:hi:

[The_Casual_Observer]

11. Notice the ground swell/ talking points about the economy improving?

They are seeing what they can get away with.

[sandnsea]

13. That is likely gouging

Call your state SOS. Unless they got a new shipment this morning, there is no reason for that gas to go up today. Get them investigated.

[BB1]

15. Queen Beatrix needed a new hat.

Royal Dutch Shell, remember?

[snooper2]

16. Well, I imagine somebody went out there with a pole

and changed the 4 for a 7 :rofl: :rofl: :rofl: :rofl: :rofl:

[oldnslo]

18. $5 by Memorial Day. Cheap gas will be but a memory....n/t

[KillCapitalism]

22. You might be right. n/t

[backscatter712]

23. It'll probably go up some, but not up to $5.

Remember, Carl Levin pushed into the Farm Bill legislation to close the Enron Loophole, and it got pushed into law over Bush's veto. (one of the few real victories for Congress last year.)

[Statistical]

42. Funny when people say things like that....

You do know there are futures contracts for gasoline right?

RB is the chain
RBM9 is ticker for gasoline delivery in June.
RBG9 is ticker for gasoline delivery in Feb.

Feb contract is $1.17
June contract is $1.40

So the market is prediction a $0.23 rise in price of gasoline between now & June.

Now gasoline contracts don't include transportation (they are delivered to port of NY), taxes, and retail markup.

Current price of gallon of gas in NY runs $1.89 and contract runs $1.17 so we can estimate that transportation, taxes, & retail markup is about $0.72. Let's just say $0.80 to be safe.

IF gasoline was $5.00 per gallon in NY in June the RBM9 would close around $4.20 ($5.00-$4.20).

IF you are so sure gasoline will hit $5.00 why not buy RBM9 contracts. Currently selling for $1.40 you close them at $4.20 = 340% profit in 5 months.
Actually with margin fully leverage you could make around 2000% profit in 5 months IF gasoline hits $5.00

However it is not.
Gasoline likely will rise $0.23 between now & Memorial Day not $3.20.

So why does all this matter in the real world. IF gasoline was going to be $5.00 in June EVERYONE and their MOTHER buing RBM9 contracts right this second.
If you owned a gas station wouldn't you want to lock in guaranteed delivery @ <$2.00 gallon and then be able to sell it at $5.00 gallon? You could with future contracts.
The fact that demand for RBM9 is nowhere NEAR $4.20 indicates nobody believes gasoline will even be in the $5.00 ballpark come June.

[BB1]

46. Thanx for the explanation!

I didn't realise it worked that way. In essence, what you're saying is: we can know in advance (up to sex months) what the gas-prices will be.

So how come everybody acts so surprised when prices go up?

[WeDidIt]

19. One word

Gaza

That word explains it all. Speculation drives up the price whenever Israel goes to war. This has been true as long as Israel has existed.

[Buzz Clik]

24. The official answer from Shell: "Fuck you."

But, that's always the official answer.

[yodoobo]

25. The price on the sign relfects the NEXT delivery of fuel

Not the one that is in the ground.

Essentially, as part of a gas station's initial capitalization is the purchase of fuel in the ground. Just like they had to buy a building, land, pumps etc.

The price on the pump is the gas stations operators estimate of how much next the fuel load will cost+payments on the initial capitalization+plus profit.

In other words, you are paying for the replacement cost of fuel.


Hence this is why when the gas futures go up, why the price on the pump rises.

That's just good business, accounting 101 and prudent cash flow management.

The real crime, is when gas futures go down, and they don't immediately run out to lower pump prices. The lowering of pump prices is more controlled by what the station next door, or down the street is doing.

I had an interesting chat with an old friend who is a gas station operator awhile back. Flat fuel prices are great and easy to manage. Rising prices are difficult to manage - one slipup and you lose money, but lowering prices are where he makes the most buck.

[Earth Bound Misfit]

26. Gaza and a dispute between Ukraine and Russia over gas imports

Gasoline futures are up today, speculators are again speculating (IMHO), talk of an "improving" economy (BWAHAHA). Then there's this:

http://money.cnn.com/2009/01/05/news/economy/gas/index.htm?section=money_latest

Gas prices jump again

The price of regular gasoline rises as oil companies prepare for a return in demand later this year.

NEW YORK (CNNMoney.com) -- Gasoline prices rose for the sixth straight day Monday, according to a nationwide survey of gas station credit card swipes - a sign that oil companies expect higher demand later this year.

The price of regular unleaded rose 1.4 cents to a national average of $1.672 a gallon, motorist group AAA reported.

Rising prices at this time of year are a sign that oil companies are preparing for an increase in demand in the spring and summer, according to Jason Toews, co-founder of GasBuddy.com, a service that lets motorists post local fuel prices online.

Oil companies "don't like to shock us," said Toews. "They like to ease us in to higher prices."

If prices rise too quickly, it could cause a dramatic drop in demand, he added.

--snip--

Economy: Fuel consumption remains low compared to a year ago, but that could change if the economy turns around, said Chris Lafakis, associate economist with Moody's Economy.com.

There is a lot of hope the economy will start to stabilize after the next presidential administration takes office, according to Lafakis.

There are "expectations that the new administration will be able to revive the economy with a large stimulus package," said Lafakis.

President-elect Barack Obama, who takes the oath of office on Jan. 20, is expected to push Congress for an economic stimulus package that could cost between $675 billion and $775 billion.

Oil companies "don't like to shock us,"
Uhmm, Yeah, I'm sure :sarcasm:

Lastly, as DUer snooper2 noted, somebody went out there with a pole and changed the 4 for a 7 :evilgrin:

[leftstreet]

28. Well, Putin said gas was going up

December 23, 2008 MOSCOW, Russia (CNN) -- The era of cheap natural gas is coming to an end, Russian Prime Minister Vladimir Putin said Tuesday at a meeting in Moscow of the world's major gas-exporting countries.

That dire-sounding prediction is exactly what his audience wanted to hear.

Iran, Libya and Venezuela are among the countries attending the Gas Exporting Countries Forum, which observers say is fast emerging as an OPEC-style gas-producers' cartel. The gas group, commonly called GECF, would control the vast bulk of global supplies and could fix prices for the rest of the world.

And because of rising global production costs, Putin said, prices will only get higher.

"Costs, which are necessary to develop the sphere, are rising sharply," Putin said. "It means that despite the global financial crisis and price drop for energy resources, the era of cheap energy, including cheap gas, is coming to an end."

http://edition.cnn.com/2008/BUSINESS/12/23/russia.putin.gas/?iref=mpstoryview

[SoCalDem]

27. Gaza

the speculators are baaaaaaaack:grr:

[madrchsod]

34. opec cut back on production

and of course the bad news has everyone betting on the rise.

[Terry in Austin]

36. They didn't get the memo

TO: The world
FROM: God
SUBJECT: Gasoline prices

Americans have a Me-given right to cheap gas.

Don't screw it up!

[Selatius]

39. I saw it jump from 1.49 to 1.68 in a couple days' time. Them speculators at work again???

Are they using the bail-out money to play the oil futures contracts market?

[JNelson6563]

43. Trouble in the holy land.

And what's more holy than petro???

[Blue_In_AK]

44. Our gas is still $2.33

We'd be thrilled if it was $1.79.