Gas has come down, but fractionally compared to what oil has come down.Considering the price of crude oil is now lower than it was 1 year ago, why isn't gas lower than it was 1 year ago?
Today's Edison, NJ gas price is $2.71. That is 32% below $4.00. With NYMEX price at $1.69 the retail price has more to go on the downside.
1) Higher gas taxes? 2) RFG guidelines? 3) Higher sales taxes? 4) Higher candy bar taxes? 5) Fewer gas stations, less competition? 6) Prices rise quickly, fall slowly! 7) Take your pick.
Gas came off 33 cents last week. twice the national record. there is a 3 week lag time via the refineries, and it is possible that they don't produce flat out when prices are dropping. They break down all the time as it is. they are old. There is enough competition where the margins are pretty standard. The gas stations themselves have razor thin margins. the big money is made getting the oil out of the ground. When it costs $20 per barrel, and Exxon gets paid $100 per barrel, THAT is cash! Contrary to public opinion, oil companies do not set prices, the global market does, and its reflected via the NY Merc.
gas companies are shit holes......when crude oil jumps.....the prices immediately reflects. when crude gets hammered down, the price adjusts very very slowly.....so called lag. Bush grew up surrounded by these guys, and he did them a favor by watching their backs.........Obama should step up and kill these guys..... I don't care what effect it'll have on the market....probably bad for my trading....they cheat people's money and they should die
Obama should step up and kill these guys..... ================================= That's one thing I've never seen in the news. The black man rallying about high oil prices. There's going to be a lot of new ground covered if he becomes president. The black man helping the white man. I am looking forward to it. I'm sure there are plenty of white schools that need a kiln or an ice hockey rink.
$140 oil would equate to a roughly $3.45 gasoline futures price (assuming just a $5/barrel gasoline crack). The gasoline crack is now negative, at $72.20 a barrel for Nov crude, the gasoline crack is a negative -$1.094 using $1.6930 Nov RBOB). Don't use % moves in crude to try to dictate what gasoline prices should be. Get educated on crack. The all time high for crude futures AND gasoline futures was on 7/11/08, $147.27 and $3.630 respectively. That gas crack equated to $5.19/barrel for the reefer. You might think that is big, but is is just marginal. The price of futures you see is for New York Harbor delivered gasoline, BEFORE taxes and station profit markup are added. New York taxes are $0.629 per gallon, then they add a station profit and there is a transportation cost to the trucking company. So, at the current NOV futures price of $$1.682, add .629 for taxes equals $2.311. charge a nickle for transport = $2.361. now add station markup (to cover the cost of credit cards alone would be another nickle) plus station profit of say a dime would be $2.511 a gallon for reg unleaded. I am not sure the cost of ethanol, but that may even ratchet it up a bit more. These are NOVEMBER prices so far, not what to expect next week. They may change alot more before we get there. Here is a list of state by state taxes on gasoline. http://www.commonsensejunction.com/notes/gas-tax-rate.html
Although I'm no expert on CRACK (I guess you need to be to understand the crude oil/gas relationship arguments vs. reality), one study I have done was to look at XOM profits and their relationship to gas prices. One thing is for certain-- regardless of any kind of hidden costs one can come up with, as the price of gas skyrocketed to its peak (practically doubling), so too did XOM profits. If all these margins I hear about are razor thin, then why did the profit of XOM track gas prices (on their meteor ride up) so nicely?