Oil up....gas down?

Demand is down because the summer driving season is over. Also, the U.S. is importing gasoline from Europe while opening up strategic reserves as the refineries slowly come back online.

Oil companies feeling guilty or ashamed? Is that even possible?

I wouldn't be surprised if the auto industry has had an effect on the price of gasoline - - they don't want everyone to buy a Prius. A few phone calls to lawmakers or lobbyists suggesting the price better come down or else someone might start investigating the huge profit windfalls recently brought to light. That's my guess.

Even with crude at around $65 a barrel, the cost of the crude oil needed to make a gallon of gasoline is only about $1.85. The rest of the cost of the gasoline is distributed among taxes, transportation, refining, profit etc.

Because the recent strong demand (mostly driven by news media induced panic), the oil companies could raise the price of gasoline (and their profits). As demand falls, the price will fall back towards the minimum prices at which oil companies are willing to sell the gasoline. My guess is that crude oil will slowly drop back to somewhere in the $40-$50 range and gasoline will fall back to the area of $2.25 by next spring. I would expect the oil companies to try to hold the line on prices through next November's election in an attempt to keep the Republicans in control of Congress.

See

Do a bit of research. The so called gouging by the oil industry has been investigated several time over the years. The result has been the same every time. The price swings, up and down, have been the result of market conditions brought on by supply and demand. Oil, and it products, are the most regulated commodity in the US. When you drive down the street and see a station where the price has gone up 2C more than an other, which station will get your business? Same is true when the price goes down even 1C, get real.

mike hunt

Oil companies do not control the price of crude. Crude prices are determined by what ever price commodities speculators are willing to buy that commodity. Not too long ago they were betting near $70 a barrel, now the must sell off their futures at a loss of near $10. Several years ago I purchased 50,000 gallons of heating oil for some of my properties at $1.50 a gallon. Shortly thereafter the price dropped to $1.20 and stayed there throughout the heating season. This year I paid $1.89 and the current price is around $2.17. Sometimes you win and other times you lose when you buy a commodity. ;)

mike hunt

Ah, yes, the old supply and demand excuse - - never because someone has decided to up the price and has made a bunch of phone calls. You are right, supply and demand determine the price of oil. But gas prices - - on their way up, increase daily, even though the tanks are only replenished weekly or more - - doesn't that suggest something to you? How about the price of diesel keeping track with gasoline or even exceeding gasoline even though it's much cheaper to produce - - what huge demand is causing that? I've never seen a big-rig pull into a local gas station to load up on diesel. Just phone calls - - never mind the station paid a low price two months ago when the diesel tank was topped off - - "Raise your price to $X.XX now, if you ever want to sell a drop of gasoline again". Still a guess, and also a suspicion, but who will ever be able to prove any of it? I think the guy who makes the phone calls is now receiving phone calls - - that's all I'm saying.

Chuck

Then try looking at the basis of your opinion logically, rather than conspiratorially. If what you believe to be true were true, the price would never go down. Thereof what you believe to be true can not possible be true. ;)

mike hunt

No, gas prices have been stuck high. The refiners are making about 40 cents extra profit a gallon. . . .

Charles of Kankakee

They've fallen 25 cents per gallon here. That's $10 per barrel whereas oil has fallen maybe $1 or $2.

Oil prices are set by world wide demand. Gas prices are set by more local demand and fears.