Ain't this chart pretty? (Gas prices)

[Gilligan]

Why do a lot of businesses lean towards hiring 2-3 part-time people to fill the positions of 1 full-time person?

Its cheaper to run 1 refinery at 120% production than to run 3 at 90%

You get to save money on the costs of the other refineries (by not operating/closing them) AND... you get to reap the benefits of the price increases due to the pseudo-shortages in production!

Problem with your incorrect theory is that the refineries in question are (or, in many cases, were) operated by multiple competing entities. Yr just spitballing here.

 

[SG_Player1974]

Problem with your incorrect theory is that the refineries in question are (or, in many cases, were) operated by multiple competing entities. Yr just spitballing here.

What does the fact that they were competing have to do with them closing and/or not maintaining refineries? Your statement makes no sense in rebuttal to my argument.

Are you saying that these companies did NOT streamline the amount of production refineries and benefit from the profits of low output to drive higher prices/demand because they were competing?!

Sony and Microsoft compete too. Doesn't change the fact that they limit production on their latest Gizmo game so it drives up prices and revenue when they are released.

Bottom line is that numbers don't lie. There STILL has been no plausable explanation for why the price at the pump has increased so dramatically in such a short time!

 

[Gilligan]

What does the fact that they were competing have to do with them closing and/or not maintaining refineries? Your statement makes no sense in rebuttal to my argument.

!

Your previous supposition assumed either collusion (illegal) or an operational monopoly. Neither is the case. You simply don't understand basic supply-demand economics. I guarantee you the companies that closed and/or divested themselves of refineries didn't do so to help their competitors or anyone else out. They did so for the most fundamental of reasons driving every business; it was not adequately profitable.

So, given that the refining business sucks rocks at current pricing levels, how, specifically, do you think they can significantly reduce what they sell it for and survive? I'm sure they'd love to hear from you.

As you can easily see from the chart in the link..the "elephant in the room" is the cost of the oil. The rest of what adds up to the pump price is little bits and pieces...including refining costs.

http://energyalmanac.ca.gov/gasoline/margins/

 

[Gilligan]

If someone could explain to me why the price of gas at the pump increased a total of $1.20 in 25 years (mid-70's to 2000) yet... it has increased almost twice that amount in half the time. !

Hmm. A barrel of crude was selling for less than $30 on 9/11/2001....and only recently dropped back below $100 a barrel. Lemme go grab a calculator and....

 

[SG_Player1974]

Hmm. A barrel of crude was selling for less than $30 on 9/11/2001....and only recently dropped back below $100 a barrel. Lemme go grab a calculator and....

Funny that the charts I am looking at say that the price of crude oil per barrel went down from $98 to about $58 between 2007 and 2009.

Also funny that I really do not remember any drastic decline in the price of gas at the pump during that 2 year period.

http://www.wtrg.com/prices.htm

I guess we can chalk that up to those "special understandings about basic supply and demand" huh?

 

[Gilligan]

Funny that the charts I am looking at say that the price of crude oil per barrel went down from $98 to about $58 between 2007 and 2009.

Also funny that I really do not remember any drastic decline in the price of gas at the pump during that 2 year period.

http://www.wtrg.com/prices.htm


I guess we can chalk that up to those "special understandings about basic supply and demand" huh?

I remember worrying gas was going to hit $5.

Funny how many refineries closed after that period you refer too. But you just go on and decide what's a fair price and just offer that. I'm sure someone will sell.

On a related note..I just drove past three different stations on my way to Lex Park that are posting under $3 bucks for regular now...

 

[Gilligan]

Holy crap!...

http://finance.yahoo.com/news/oil-prices-firm-weekly-us-inventories-114655471.html

 

[SG_Player1974]

Funny how many refineries closed after that period you refer too. But you just go on and decide what's a fair price and just offer that. I'm sure someone will sell.

I didn't say anything about AFTER. I want to know your reasoning for why the price of gas, at the pump, did NOT change or changed very, very little during that timeframe when the price of crude went down by 40%

Im not trying to get into a debate here... I would just like someone to explain it with facts and reasoning that makes sense instead of BS.

 

[Gilligan]

I didn't say anything about AFTER. I want to know your reasoning for why the price of gas, at the pump, did NOT change or changed very, very little during that timeframe when the price of crude went down by 40%

I'm not trying to get into a debate here... I would just like someone to explain it with facts and reasoning that makes sense instead of BS.

Because market activity could and did push it there. Why is that so hard to understand? What are the root causes of unexpected fluctuations in soy beans..pork bellies....lithium....any fungible commodity, which refined petroleum products are. The market forces are global. Most of the "players" in any market are always going to push prices up as much as they can....of course.

You are focused on a very short period of time; the refineries that are now closed required huge investments and took a long to build. I wonder how many of those would still be operating if they had been able to maintain the margins they could during the period you seem so fixated on. Water under the bridge now; it's a good thing that demand for gasoline in the US has stopped rising so much in recent years.

 

[SG_Player1974]

Because market activity could and did push it there. Why is that so hard to understand? What are the root causes of unexpected fluctuations in soy beans..pork bellies....lithium....any fungible commodity, which refined petroleum products are. The market forces are global. Most of the "players" in any market are always going to push prices up as much as they can....of course.

You are focused on a very short period of time; the refineries that are now closed required huge investments and took a long to build. I wonder how many of those would still be operating if they had been able to maintain the margins they could during the period you seem so fixated on. Water under the bridge now; it's a good thing that demand for gasoline in the US has stopped rising so much in recent years.

I see your point however... this still does not answer my original question or maybe it does not provide enough of an answer.

How did the price of gas at the pump manage to almost double in price in 5-6 years when compared to the previous 30? Is your explanation that the "demand" went up this drastically and refineries went under at such a fast rate? So you are saying that the use of crude oil in our country AND countries all over the world had a 200% increase in usage in the last 5 years compared to the previous 30!?

I am focusing on such a short period (from my initial postings) because that is where the price differences are so drastic!

I believe the REAL reason for the pricing is what I highlighted above.... PERIOD!

 

[Gilligan]

I see your point however... this still does not answer my original question or maybe it does not provide enough of an answer.

How did the price of gas at the pump manage to almost double in price in 5-6 years when compared to the previous 30?!

You must have skipped over that post... The price of a barrel of oil more than TRIPLED from where it was in 2001. In a separate link I provided, you can find that the oil cost is by far the primary constituent of the cost of a gallon of gasoline. Oil prices are established by the world market to an ever greater extent than gasoline prices are. What part of that are you missing?

 

[SG_Player1974]

You must have skipped over that post... The price of a barrel of oil more than TRIPLED from where it was in 2001. In a separate link I provided, you can find that the oil cost is by far the primary constituent of the cost of a gallon of gasoline. Oil prices are established by the world market to an ever greater extent than gasoline prices are. What part of that are you missing?

The part that explains WHY the price at the gas pump has nearly doubled since 2009... not 2001! So far you have mention refineries closing however, that did not cause the price to double in the past... not even close!

Could it simply be that the price has skyrocketed merely because of speculators? Or, are you saying that the world market has seen demand increase almost 200% in the last half-decade?

 

[Gilligan]

LOL...compare the change to 2008 instead of 2009 then. Barely changed..or down a bit actually...

http://www.GasBuddy.com/gb_retail_price_chart.aspx?city1=USA%20Average&city2=&city3=&crude=n&tme=120&units=us

 

[SG_Player1974]

LOL...compare the change to 2008 instead of 2009 then. Barely changed..or down a bit actually...

http://www.GasBuddy.com/gb_retail_price_chart.aspx?city1=USA%20Average&city2=&city3=&crude=n&tme=120&units=us

The part that explains WHY the price at the gas pump has nearly doubled since 2009... not 2001! So far you have mention refineries closing however, that did not cause the price to double in the past... not even close!

Could it simply be that the price has skyrocketed merely because of speculators? Or, are you saying that the world market has seen demand increase almost 200% in the last half-decade?

I'll still patiently wait for your response to the question I asked.

 

[Gilligan]

I'll still patiently wait for your response to the question I asked.

You must be kidding. I'll ignore your silly implication that prices are connected to demand in a simple linear and unity scale relationship; they most certainly are not.

OK..first, explain why the price of gasoline tumbled precipitously in the last quarter of 2008. Then explain why you are hopelessly fixated on "why" it then rose back to sustainable levels again...and keep insisting on comparing current prices to that anomalous low point at end of 2008 instead of the overall historical trends?

BTW..it all still goes back to oil prices. In July 2008, the price of a barrel of oil hovered near $150(!!). Only a few short months later, it had crashed to the remarkable low of only $43 per barrel - a decline of nearly 70%.

So, the price of gasoline refined from $43/barrel oil bottomed out in 2009...and has steadily increased every since. Now we're seeing the price of oil slide back again, but not from the kind of high it saw in 2008 and probably not to low it reached in early 2009. My money is on a relatively long period of $2.60/gallon gasoline....

 

[SG_Player1974]

You must be kidding. OK..first, explain why the price of gasoline tumbled precipitously in the last quarter of 2008. Then explain why you are hopelessly fixated on "why" it then rose back to sustainable levels again...and keep insisting on comparing current prices to that anomalous low point at end of 2008 instead of the overall historical trends?

Ummm... I believe it was ME that posted a link to "historical trends" that showed the averages of gasoline at the pump for the last 40-50 years! I also pointed out that, according to that link, the price of gas at the pump had gone up almost 200% in the last 5 years.

YOU were the one whom singled out the years 2008 and 2009 in the post above.

For someone who constantly shames people about linking their proof and proving their argument.... you certainly have a short memory when someone does.

 

[Gilligan]

Ummm... I believe it was ME that posted a link to "historical trends" that showed the averages of gasoline at the pump for the last 40-50 years! I also pointed out that, according to that link, the price of gas at the pump had gone up almost 200% in the last 5 years.

YOU were the one whom singled out the years 2008 and 2009 in the post above.

For someone who constantly shames people about linking their proof and proving their argument.... you certainly have a short memory when someone does.

I figured anyone..including you...would never try to draw any meaningful conclusions from such an incredibly short-lived dip. Yet you just repeated it again..."200% in just 5 years". Fine..lets both be stupid. Using your unusual form of "two-point peak-trough" trend analysis...I maintain it's dropped 15% in 6 years.

How do you explain that?

 

[SG_Player1974]

I think we went WAY off from the original topic.... Let me re-state my question.

Gas prices are directly "reflected" apparently by the price of crude oil... which is a tradable commodity. So...

What is the root cause of said recent instability when compared to the previous decades? What are we currently pointing to to blame for it? Refineries? Wars? Demand? What???

 

[Gilligan]

Refineries have little of nothing to do with the price of anything..not the end product and not the raw product. They've squeezed about every dime of process efficiency they possibly can out of that. (Look at the trend of the refining cost over time..as a percentage of total cost of a gallon of gas).

I've seen the rather dramatic gyration that occurred in 2008/2009 explained by a bunch of reasons by a bunch of pundits...but none of that matters as far as today's situation. Smooth the historical price plot to eliminate that aberration (the remarkable peak and trough both) and you have a relationship between oil prices and demand that pretty much makes sense otherwise. I see nothing in the recent drop in oil prices that is driven by anything other than supply versus demand (supply, in this case, factors in known reserves to some extent...and the extent of known reserves is reaching astronomical proportions.)

 

[SG_Player1974]

I just cannot grasp how a some-what regulated commodity can be allowed to fluxuate so much! How can the demand for such an essential product get so much lower, so fast as to cause such a dip in pricing? I would expect it to steadily and evenly go up as manufacturing and oil-based needs steadily increase but HOW does it turn on a dime like it did recently?