Gas Prices Part Deux

#76
#76
The summer season always puts upward pressure on prices for several reasons:

1. Demand (within year) is higher and is always expected to be higher than other parts of the year.

2. There are changeovers from winter blends to summer blends which have changeover costs including shutdowns/short-term capacity reductions. Further there may be more Summer blends than Winter blends in total which reduces production economies of scale and creates more inventory uncertainty.

In short, there are real cost differences and real demand differences that drive gas prices higher in absolute terms for Summer months. Likewise we see a drop in absolute annual gas prices in the Fall as demand drops pre-changeovers.
 
#77
#77
I'm also not arguing that refiners are holding up high margins unless you can show me evidence of price fixing. Competitive behavior without price fixing would take care of excessive margins.
 
#78
#78
volinbham said:
The summer season always puts upward pressure on prices for several reasons:

1. Demand (within year) is higher and is always expected to be higher than other parts of the year.

2. There are changeovers from winter blends to summer blends which have changeover costs including shutdowns/short-term capacity reductions. Further there may be more Summer blends than Winter blends in total which reduces production economies of scale and creates more inventory uncertainty.

In short, there are real cost differences and real demand differences that drive gas prices higher in absolute terms for Summer months. Likewise we see a drop in absolute annual gas prices in the Fall as demand drops pre-changeovers.
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i haven't seen anybody saying demand is high right now. listening to cnbc today they said actually demand is low.
 
#80
#80
volinbham said:
I'm also not arguing that refiners are holding up high margins unless you can show me evidence of price fixing. Competitive behavior without price fixing would take care of excessive margins.
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What do you mean by competition? As far as I see, oil based transportation is the only viable economic option we have at the moment.
 
#82
#82
rjd970 said:
What do you mean by competition? As far as I see, oil based transportation is the only viable economic option we have at the moment.
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Competition among refiners. If they are all making really high margins, one is likely to drop margin a bit to gain market share.
 
#83
#83
Is everywhere else going up quickly? I filled up a week ago and it was around $2.17 or somewhere in the late teens, I need to fill up today/tomorrow and was noticing prices this week are $2.55ish. :bad:
 
#84
#84
volwindy said:
Is everywhere else going up quickly? I filled up a week ago and it was around $2.17 or somewhere in the late teens, I need to fill up today/tomorrow and was noticing prices this week are $2.55ish. :bad:
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I am in Middle Tennessee and it has went up gradually here. We are at about $2.55 or so also. The good news is it has probably leveled off. Oil per barrel is at about $78 per barrel and has been in the area for a couple of weeks so you should not see much if any more of an increase in the near future.
 
#85
#85
volwindy said:
Is everywhere else going up quickly? I filled up a week ago and it was around $2.17 or somewhere in the late teens, I need to fill up today/tomorrow and was noticing prices this week are $2.55ish. :bad:
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we got a .10 jump over night this week, now it is going up a couple of cents every other day.......Damn you George Bush!!!!......oh, wait.....
 
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