Gas prices are down and I am wondering why

DosEquis · 08-28-2006, 10:44 AM

We still have the busted pipe up north. We still have a considerable amount of instability in the middle east. The price has gone down 30 or more cents in the last few weeks and oil has gone down. One with blind faith in a free market economy would just assume that demand is significantly less. Everything I have seen does not indicate a significant decline in demand.

I am thinking it is rather convenient for the price decline right before november, in effort to have republicans keep their job because the oil company knows it will actually have to pay taxes if democrats get control.

Big oil =

Thorgrim · 08-28-2006, 10:50 AM

The last news was that Jet travel would be down because of the bombing...it didn't pan out, but there are have been no big middle east stories the past week...or civil wars in nigeria or anything else etc

Give the oil markets another reason to spook and theyll start running away again

WickedLou9 · 08-28-2006, 10:58 AM

Summer driving season is winding down so demand is lower. They are also trying to use up all of the "summer fuel" before they switch over to the special winter blends that contain extra oxidizing agents like MTBE. prices will probably go back up a little towards the middle of winter and then go down a bit before the summer.. it's a cycle.

Publius · 08-28-2006, 10:59 AM

Thorgrim is actually making sense.

Things are fairly stable in the middle east right now, as stable as one can ever call that area these days, so prices are slowly easing

ballz2wallz · 08-28-2006, 10:59 AM

or...

Gas prices dropping sharply, hit 5-month low

The August decline follows a month of increases. Barring unexpected events, further price decreases are likely because stocks of gasoline are high and consumer demand is likely to decrease as the summer driving season ends, Lundberg said.

it has nothing to do with the middle east.

Publius · 08-28-2006, 11:04 AM

Originally Posted by ballz2wallz

or...

Gas prices dropping sharply, hit 5-month low

it has nothing to do with the middle east.

Oil markets ALWAYS have something to do with the middle east.

ballz2wallz · 08-28-2006, 11:05 AM

Originally Posted by Publius

Oil markets ALWAYS have something to do with the middle east.

given the situation in the middle east, i doubt they're dropping because of it!!! if anything, they'd rise...iran's nuclear ambitions cause a lot of tension...

thomez · 08-28-2006, 11:05 AM

and Ernesto is going to FL and missing the Gulf (supposedly) so that helps oil price speculation

ballz2wallz · 08-28-2006, 11:06 AM

Originally Posted by thomez

and Ernesto is going to FL and missing the Gulf (supposedly) so that helps oil price speculation

and it's been downgraded to a tropical storm, so that does help, but they didn't know that 2 weeks ago when it started dropping.

DosEquis · 08-28-2006, 11:10 AM

Even so the situation in the middle east they used to justify the price increase has still not improved. We still have Iran acting funny, we still have Iraq all screwed up and not pumping any oil...etc. The middle east has not stabilized.

If their disruptions in supply didnt turn out, where is my rebate for them over charging me 30 cents a gallon to much for gasoline?

ballz2wallz · 08-28-2006, 11:12 AM

Originally Posted by DosEquis

Even so the situation in the middle east they used to justify the price increase has still not improved. We still have Iran acting funny, we still have Iraq all screwed up and not pumping any oil...etc. The middle east has not stabilized.

If their disruptions in supply didnt turn out, where is my rebate for them over charging me 30 cents a gallon to much for gasoline?

most of the things they 'fear' that result in price increases never pan out.

DosEquis · 08-28-2006, 11:18 AM

Originally Posted by ballz2wallz

most of the things they 'fear' that result in price increases never pan out.

Thus it is screwed up and should not be allowed. It should be on actual supply and demand and not "omg omg

iran is acting funny this week"

WickedLou9 · 08-28-2006, 11:21 AM

Originally Posted by DosEquis

Thus it is screwed up and should not be allowed. It should be on actual supply and demand and not "omg omg iran is acting funny this week"

yeah it's the speculators. it will bite them in the ass though when the high prices cause demand to drop and with it oil prices.

Ardentfrost · 08-28-2006, 11:22 AM

They'll spike again for Sept 4th.

thomez · 08-28-2006, 11:22 AM

Originally Posted by ballz2wallz

and it's been downgraded to a tropical storm, so that does help, but they didn't know that 2 weeks ago when it started dropping.

they would be going up a bunch today if that baby went west of Cuba

Publius · 08-28-2006, 11:25 AM

Originally Posted by DosEquis

Thus it is screwed up and should not be allowed. It should be on actual supply and demand and not "omg omg iran is acting funny this week"

What else would you have them base it on? Current oil prices? What happens when something DOES happen and prices shoot up, and they can't afford to buy the amount of oil they need? You must remember: when you pay for gas at the pump you aren't buying the oil that made that gas, you're buying the oil that will make the gas you buy weeks or even months from now. Prices fluctuate, and to make sure an uninterrupted supply of oil is available they have to base their prices off of what-ifs and could-bes.

DosEquis · 08-28-2006, 12:30 PM

I get your point but instead of speculating and raising the price, how about when there is an actual disruption in supply.

The pipe thing happened, and it was an actual disruption, so prices went up. Iran farts and it smells funny and prices go up. Two completely different scenerios, one warrants a price increase and the other does not.

08-28-2006, 12:34 PM

Gas prices are down because the ethanol production is finally catching up with current demands. Also the blend specifications are going to be heading to the winter blends by the end of september and demand has been slightly lower than forcasted. I'd expect prices to go up slightly for next weekend and continue to slowly decline.

08-28-2006, 12:34 PM

Originally Posted by DosEquis

I get your point but instead of speculating and raising the price, how about when there is an actual disruption in supply.

The pipe thing happened, and it was an actual disruption, so prices went up. Iran farts and it smells funny and prices go up. Two completely different scenerios, one warrants a price increase and the other does not.

Thats a pretty good point something for the most part I agree with. But the point of commodities is to head off problems before theyr'e problems and that means anticipating.

motivez · 08-28-2006, 04:06 PM

Prices are down because

a) Jet crashing wasn't terrorism
b) Ernesto isn't going into the gulf
c) Summer driving season is over
d) There's nothing big happening in the middle east

Since price is based off futures instead of supply and demand (

), and there's no reason to be "concerned" atm, price is going down.

Prices are still around 2.75-2.80 here, but I filled up for 2.61 at Costco (one of the main benefits of being a member is cheaper gas prices

)