Oil- Unleaded Gas?

Discussion in 'Economics' started by EqtTrdr, Jan 11, 2007.

  1. Why is oil crashing yet they refuse to lower gas prices at service stations??

    please school me here..

    thanks !!
  2. price effects lag...


  3. I agree, and so therefore, oil companies like XOM should be reporting record smashing profits next quarter because they are charging the same price for gas that they were when it cost them $65 a barrel. But now they are getting it for $51 (as of today) so their margins are now enormous.
  4. Allen3


    I read that they make thier money when the price drops, as they lag behind the price going down. They do that because we are so grateful for any easing. On the way up they don't want to scare, anger, and frustrate the consumer so they take less margin at the pumps. Seemed to make sense with how my gas station works it. I got pissed tonight with how long they have lagged this time though.


  5. Why would they care if they upset us? Its not like there's any way to avoid using their product in our cars. I don't think they really care about our feelings at all. :(
  6. Allen3


    I think it was more like not changing your driving habits and therefore causing you to buy less gas. Kind of the old turn up the heat on the frog till it cooks idea. Could be hogwash. But I know first hand about some cooked frogs. I don't think the gas companies think much more of us.

  7. S2007S


    I was going to start the same post yesterday. I filled up again just yesterday and paid $2.49. Now please dont say its lagging because I can clearly remember some months ago when oil would jump 3-4 bucks a barrel in 2 days and right there you would see the guy changing the price. Sometimes you would see a .10-.20 difference in a matter of 2 days, however with Oil dropping nearly 15% I have seen only .10 drop in prices in the last 3 weeks. They actually raised the prices around Chirstmas time by .05-.08 at some gas stations.

    They are always quick to raise it when oil is skyrocketing, but when Oil is selling off they could care less about dropping the prices.
  8. I don't mean to upset anyone but let's be real here. They run a business. They charge what the market will bear. Of course it is going to drop slower than it rises. When it starts rising they have no idea how long it will continue to rise and before they know it their margin could be eliminated. It makes no sense for them to wait and see if prices come back down.

    Conversely, once the prices have jumped they've proven to themselves that people will pay the higher price. If sales volume didn't slow dramatically when prices went up, then they won't come back down quickly. OTOH, if volume dropped dramatically when prices rose, any drop in oil will be very quickly realized at the pump in the form of cheaper prices. They still have to make money but they want to keep sales volume up too.
  9. Allen3


    They don't want to kill the golden goose, but they do want to bleed it just right.