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(Forbes)   Hey guys, it's been a while since we were able to hike gas prices. We couldn't possibly let a good crisis like this go to waste   (forbes.com) divider line 40
    More: Obvious, gas prices, Valero, Hurricane Ike, oil spills, Texas City, Southeastern United States, Baytown, refuses  
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1620 clicks; posted to Business » on 24 Mar 2014 at 2:19 PM (25 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-03-24 12:44:28 PM
i.imgur.com
 
2014-03-24 01:04:48 PM
Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.
 
2014-03-24 01:45:04 PM
Because f*ck you, that's why
 
2014-03-24 01:54:15 PM

Tigger: Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.


Odd, according to the companies, they need to continue raising prices and receiving subsidies because it costs them a lot of money to drill and explore.
 
2014-03-24 01:58:50 PM

timujin: Tigger: Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.

Odd, according to the companies, they need to continue raising prices and receiving subsidies because it costs them a lot of money to drill and explore.


They are asking for subsidies for those things so they can do more of them because that is where they make the money. It's why they aren't asking for subsidies to build gas stations because gasoline has a tiny margin.

It wasn't a defence of the oil companies and they absolutely don't need those subsidies period. But it's just important to understand where they make their money before people start going on about gasoline prices. At the pump gasoline sales are pretty close to perfect competition and it is frequently a franchise model.
 
2014-03-24 02:00:52 PM

Tigger: But it's just important to understand where they make their money before people start going on about gasoline prices. At the pump gasoline sales are pretty close to perfect competition and it is frequently a franchise model.


The price collusion happens higher up the chain. Say, I dunno, at oil and gas lobby events.
 
2014-03-24 02:01:49 PM

Tigger: Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.


Refining is a lousy, low-margin business.  In East coast markets, the margin can get as low as 2%.
 
2014-03-24 02:11:37 PM

Tigger: timujin: Tigger: Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.

Odd, according to the companies, they need to continue raising prices and receiving subsidies because it costs them a lot of money to drill and explore.

They are asking for subsidies for those things so they can do more of them because that is where they make the money. It's why they aren't asking for subsidies to build gas stations because gasoline has a tiny margin.

It wasn't a defence of the oil companies and they absolutely don't need those subsidies period. But it's just important to understand where they make their money before people start going on about gasoline prices. At the pump gasoline sales are pretty close to perfect competition and it is frequently a franchise model.


My point was that drilling and exploration are an expense, not a profit.  Drilling itself doesn't make money.  It's only what they do with what they drill that does.
 
2014-03-24 02:30:01 PM
When are we going to learn and just outlaw the sale of oil and its distilled products.  We have the green technology to do this.  We just need the force of the gun to make people change.
 
2014-03-24 02:41:01 PM
Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.
 
2014-03-24 02:47:08 PM

Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.


If you do a GIS for Obama gas prices you see some pretty ridiculous stuff, but I have no idea what the creator of this one thinks he's arguing.

conservativehideout.com
 
2014-03-24 02:55:18 PM

Rapmaster2000: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

If you do a GIS for Obama gas prices you see some pretty ridiculous stuff, but I have no idea what the creator of this one thinks he's arguing.

[conservativehideout.com image 363x480]


Wow, that IS pretty bad. You see that a lot lately, though. Shiat they just pulled out of their ass on multiple occasions and stitched into a single narrative somehow. Political cartoons at least used to be related to things actually going on.
 
2014-03-24 02:56:29 PM

Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.


Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?
 
2014-03-24 02:56:59 PM
The oil futures market is feeling a lot like Summer 2007 these days, a lot of price increases while the financial markets are hovering in a lull.
 
2014-03-24 02:59:59 PM

Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?


Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.
 
2014-03-24 03:07:48 PM

timujin: Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?

Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.


The thing that annoys me is that it stayed in that range pretty much the entire 90's, stayed in the neighborhood of $1.25 to $1.35. That's back when a 2 cent increase in a day was alot. Now, I've seen it jump 19 cents in a day, and then follow with 3 or 4 cents a day for the rest of the week.
 
2014-03-24 03:08:40 PM
We need to have a yearly tradition of skinning alive a CEO of an oil company that pulls this happy horseshiat every year.

Just kick off the summer driving season with, "Hey, We're all going to buy a lot more of your product, and you're going to over charge us, so we're going to FLAY YOUR ASS ALIVE. NOW
On NATIONAL TV.
 
2014-03-24 03:10:36 PM

bdub77: Tigger: But it's just important to understand where they make their money before people start going on about gasoline prices. At the pump gasoline sales are pretty close to perfect competition and it is frequently a franchise model.

The price collusion happens higher up the chain. Say, I dunno, at oil and gas lobby events.


And as such would be impossible to enforce at the pump because these are frequently franchisees who only make their money off sodas and smokes in the store.

Rapmaster2000: Tigger: Are there actually still people who think that selling gasoline is a high margin business where the oil companies make their money? It's just a place to offload the stuff. The money is in drilling, exploration and skilful manipulation of futures.

Refining is a lousy, low-margin business.  In East coast markets, the margin can get as low as 2%.


It is. That's why I specifically didn't mention it.
 
2014-03-24 03:11:09 PM
BENGASSY!!!11!!!!
 
2014-03-24 03:14:17 PM

timujin: Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?

Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.


That is still about 10 years ago.  I just ball parked it.  I just think it is sad how quickly we have adapted and a doubling of the price over a decade doesn't seem all that bad to us.
 
2014-03-24 03:21:00 PM

Tricky Chicken: I just think it is sad how quickly we have adapted and a doubling of the price over a decade doesn't seem all that bad to us.


It isn't that it doesn't seem all that bad, it's that we don't exactly have a choice.
 
2014-03-24 03:24:00 PM

Pokey.Clyde: Tricky Chicken: I just think it is sad how quickly we have adapted and a doubling of the price over a decade doesn't seem all that bad to us.

It isn't that it doesn't seem all that bad, it's that we don't exactly have a choice.


You don't generally see an uproar or hear much grumbling about it. People have just sort of bought into the idea that this is how much gas will cost now.

 I really don't know how the working poor were able to absorb a doubling of their fuel costs.  It has really strained me.
 
2014-03-24 03:25:20 PM

Mikey1969: timujin: Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?

Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.

The thing that annoys me is that it stayed in that range pretty much the entire 90's, stayed in the neighborhood of $1.25 to $1.35. That's back when a 2 cent increase in a day was alot. Now, I've seen it jump 19 cents in a day, and then follow with 3 or 4 cents a day for the rest of the week.


You could always ask the Chinese to stop driving and go back to bicycles.
 
2014-03-24 03:28:18 PM

Tricky Chicken: Pokey.Clyde: Tricky Chicken: I just think it is sad how quickly we have adapted and a doubling of the price over a decade doesn't seem all that bad to us.

It isn't that it doesn't seem all that bad, it's that we don't exactly have a choice.

You don't generally see an uproar or hear much grumbling about it. People have just sort of bought into the idea that this is how much gas will cost now.

 I really don't know how the working poor were able to absorb a doubling of their fuel costs.  It has really strained me.


By staying home and drinking...a lot.
 
2014-03-24 03:32:27 PM

Tricky Chicken: timujin: Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?

Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.

That is still about 10 years ago.  I just ball parked it.  I just think it is sad how quickly we have adapted and a doubling of the price over a decade doesn't seem all that bad to us.


I don't think you will find many people who think that is the case.  I'm fairly sure almost anyone would agree that $1.50/gallon gas would be nice to have again.
 
2014-03-24 03:33:04 PM

LarryDan43: Mikey1969: timujin: Tricky Chicken: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

Or like the old days when gas was about $1.50 a gallon. That was forever ago. It must be like ten years ago. Who can remember that far back amiright?

Close, the last time it was at $1.50 was a brief dip at the end of 2001/beginning of 2002.

The thing that annoys me is that it stayed in that range pretty much the entire 90's, stayed in the neighborhood of $1.25 to $1.35. That's back when a 2 cent increase in a day was alot. Now, I've seen it jump 19 cents in a day, and then follow with 3 or 4 cents a day for the rest of the week.

You could always ask the Chinese to stop driving and go back to bicycles.


Oh, they're driving all of the way to the US to fuel up? How stupid. They have to be out of gas by the time they get home.
 
2014-03-24 03:44:00 PM
I love all the Facebook posts that think the President has control of gas prices.
 
2014-03-24 04:23:12 PM
growlersoftware.com
 
2014-03-24 04:49:48 PM

Rapmaster2000: Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.

If you do a GIS for Obama gas prices you see some pretty ridiculous stuff, but I have no idea what the creator of this one thinks he's arguing.

[conservativehideout.com image 363x480]


Obama did say something like "Low gas prices are bad" during campaign 2008 (IIRC), but more because low gas prices mean more people drive more often, meaning more pollution. He might have phrased it closer to "High gas prices can be good", since they force us to use less or to look at using cleaner sources for cars.

The same way the McCain campaign handed out tire gauges in response to the fuel economy discussion, whoever made that comic completely missed the point of the statement.
 
2014-03-24 04:54:38 PM
Every year, right about this time, something happens to inflate gas prices. If there's no bad weather or natural disaster to blame it on, then there's a refinery explosion, or they just shut down refineries for "maintenance". One way or the other though, they are gonna jack up gas prices during the prime driving season. The only variation is the excuse for the price increase that happens EVERY FARKING SPRING.
 
2014-03-24 06:02:33 PM
Yet electric vehicles have lackluster adoption...

Really outraged?  Go buy a plug in electric.
 
2014-03-24 06:19:08 PM
Not to mention Marathon Oil (MugU-thon) loves to ram a 20+cent price increase, sometimes, on a weekly basis because they have a monopoly in the Midwest.
 
2014-03-24 06:28:01 PM

Saiga410: When are we going to learn and just outlaw the sale of oil and its distilled products.  We have the green technology to do this.  We just need the force of the gun to make people change.


Why do you hate America?
 
2014-03-24 07:16:17 PM

Shirley Ujest: Saiga410: When are we going to learn and just outlaw the sale of oil and its distilled products.  We have the green technology to do this.  We just need the force of the gun to make people change.

Why do you hate America?


Fat people.
 
2014-03-24 09:58:24 PM

Sin_City_Superhero: Every year, right about this time, something happens to inflate gas prices. If there's no bad weather or natural disaster to blame it on, then there's a refinery explosion, or they just shut down refineries for "maintenance". One way or the other though, they are gonna jack up gas prices during the prime driving season. The only variation is the excuse for the price increase that happens EVERY FARKING SPRING.


Huh. I heard it was because the summer formulation was more expensive to make.

Wait a minute. Didn't I hear that about the winter formulation?

Why not both?
 
2014-03-25 06:15:13 AM
What's odd here in SC is that the off brands (I'm lookin' at you, RaceWay) jumped 19  cents a gallon yesterday, but the big names - Shell, ExxonMobil - haven't moved a penny.
 
2014-03-25 07:02:26 AM
It's been a while? Maybe where you live, subby.
 
2014-03-25 08:06:18 AM

Mikey1969: Great, now I'll get all those FB posts about how cheap gas was when Obama took office. Those people never remember that it lasted all of about a week and a half, and we still haven't seen as high of prices as we did with Bush, they just remember those few days where it was like $2.50/gallon.


Plus there are all those posts about how Bush is an "oil man," and he made all that money when prices were high, and how he can control the stock market.

Oh, and all those posts about "Bush lied" - those were funny.
 
2014-03-25 03:14:08 PM
I've been convinced for a while that refiners are colluding to keep gas prices inflated.  The price of refined product doesn't track the price of oil as you would expect.  In fact, the price of gas now is close to what they were charging before the collapse when the price for a barrel of oil traded for around $140.  Now the price for a barrel is in the 90-$100.  Price for oil has dropped.  Price for gas hasn't followed suit.
 
2014-03-25 11:37:00 PM

Pumpernickel bread: I've been convinced for a while that refiners are colluding to keep gas prices inflated.  The price of refined product doesn't track the price of oil as you would expect.  In fact, the price of gas now is close to what they were charging before the collapse when the price for a barrel of oil traded for around $140.  Now the price for a barrel is in the 90-$100.  Price for oil has dropped.  Price for gas hasn't followed suit.


Gasoline prices are what's considered "sticky" meaning they rise sharply and then fall slowly.

This happens because the individual stations (which have been state numerous times, operates independently from the "banner" from which they license i.e. the Exxon station isn't actually owned by Exxon) have to buy their gasoline from terminals in bulk and weeks to months ahead of time in order to secure certain prices. If these owners see the price of oil increasing they know that their next round of purchasing will likely be higher. Thus to have enough cash to buy new gas AND meet their existing commitments they raise their prices now. Then as they see their actual bills come in or the price of oil stabilizes (thus stabilizing their cost) they slowly come back down.

I work in the industry. Trust me the Feds would love to bust the big companies for collusion. If they thought there was any of that goin on they wouldn't hesitate to prosecute.

Remember oil (and her derivatives) are fungible.
 
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