price per barrel Vs. Price per gallon

[Zimme83]

since I posted I have come back home...on the way the same service stations have all upped their prices by 10c.... as I say...over here there is no rhyme or reason to the fuel prices... over the next couple of days they will change again... they will lower the price a couple of days prior to Christmas eve and then up it again on Christmas eve to catch out those who are waiting to fill up before traveling.... totally greed driven.

Prob right, If people now think that the gas is really cheap, why lower the price even more?

[CAP1]

Even adjusted for inflation it would put the price at the pump at about 1.30, not 2.50. 

i think that the drop in price per gallon is lagging behind the price per barrel. it seems to be dropping between 2 and 4 cents a gallon per day around here. i fully agree though, that gas should be well under 2 bucks a gallon right now though.

[Meatwad]

I wish it was under $1 a gallon, but then again I wish I could actually win something when I play the lotto too

[Chalenge]

The price is determined by the international market, so your local issues have a delayed effect upon the price at the pump. Also, it takes 3-6 months for the price per barrel to influence the market. Even that assumes that the refineries are waiting for new oil, and if the price goes lower or higher that will change it too. A dip in the price per barrel over a short period will not have a large influence, so hope the price of a barrel stays low. Talking about fuel prices on the news is just a way to get the publics attention so you watch their advertising. There is almost no desire to inform you about news that will make any difference, but television/radio/newspaper is there to market goods to you.

[RotBaron]

See Rule #12

[guncrasher]

Yes, that's the ticket it's the steel! Glad you can sum up complex forces of economics, buying on the margin, speculation and multi-national treaties regarding trading the commodity.

Steel cost    really?

that's one.


semp

[RotBaron]

See Rules #2, #4, #5

[guncrasher]

See Rules #2, #4, #5

[Rob52240]

Even when the price of a raw material goes down, the price of processing it into a finished product and transporting it to the end user will always go up.

Putting crude oil in a barrel is the easy part.  Refining it and sending it all over the world requires a lot more effort.

[MiloMorai]

The price is determined by the international market, so your local issues have a delayed effect upon the price at the pump. Also, it takes 3-6 months for the price per barrel to influence the market. Even that assumes that the refineries are waiting for new oil, and if the price goes lower or higher that will change it too. A dip in the price per barrel over a short period will not have a large influence, so hope the price of a barrel stays low. Talking about fuel prices on the news is just a way to get the publics attention so you watch their advertising. There is almost no desire to inform you about news that will make any difference, but television/radio/newspaper is there to market goods to you.

Maybe where you live but here if the price/barrel went up the price at the pump went up immediately.

[Traveler]

See Rule #12

[SIM]

One of the grocery chains in this area has a "rewards" program whereby you build up cash towrds a 20 gallon fuel purchase. Used mine yesterday and the per gallon price came out to being .36 cents per gallon. I know its a gimmick, but still was nice to get 20 gallons for roughly 7.50....

[Mickey1992]

but if it makes you feel better, I'll tell you that our mill just sold a lot of pipe used to move oil between refineries.  and the price of pipe has gone up 20 times from back in the day.  btw so has the salaries of the workers working at the refineries and the price of electricity and gas and water.  so while the price of one barrel of oil is the same as 20 years ago, all the other stuff that goes into making it has gone up in price.  so no, the price wont go down to 1 dollar per gallon.  well it might but then again, you can also buy a lottery ticket.

Exactly.  Oil is the raw material.  Even if the cost of the raw material goes down, the cost of processing and transporting does not change.  The cost of oil makes of about 60% of the cost of gas.  The rest is distribution, refining, taxes, and markup.

[Traveler]

Exactly.  Oil is the raw material.  Even if the cost of the raw material goes down, the cost of processing and transporting does not change.  The cost of oil makes of about 60% of the cost of gas.  The rest is distribution, refining, taxes, and markup.

Yes and in 2014 Exxon/Mobil's markup was 40 Billion dollars, that 40 Billion after all the expense to find, drill, transport , refine and distribution. 

[guncrasher]

That would be true if they actually put it in steel barrels , as I stated they do their accounting in barrels, but most crude is transported via pipeline and held is huge storage tanks, they just do there accounting in barrels.

traveler  my comment about barrels was a joke.


semp