01-20-2009, 04:48 AM
Sigh[V]
The price of gasoline is a reflection of the price the distributor charges the retail seller. The price of crude is the price the supplier charges the refinery. All along the line prices can be adjusted like any other commodity.
If someone wanted the cost of their finished product to rise even when there is a glut of the raw material, they simply hold back availability. If they want the price to fall when the raw material is high, flood the market with stored inventory.
Gasoline is a retail commodity, just like orange juice, X-Box, cabbage, or underwear. The fact the we placed so much need on it is our fault.
As the current situation stands, the price of crude oil is low because the refineries and speculators have little need for it. The refineries are buying the low price oil but holding much in reserve while cutting production. The distributors are no longer keeping the tanks half full but instead only keeping an as needed supply on hand. The result is the refined product isn't in storage but purchased as available. That means higher gasoline prices at the pumps. Even the service station operators believe the bottom end of usage has arrived so they can halt price reductions knowing the consumption will remain at the current level and price by pure necessity. They even tack on a penny or two and still saw no decrease in sales. They will continue raising rates a penny here and there until consumption decreases, that will be their price point
There is no great secret conspiracy. I believe it’s a greater conspiracy that I can’t get the latest I-Phone at a lower price.
The price of gasoline is a reflection of the price the distributor charges the retail seller. The price of crude is the price the supplier charges the refinery. All along the line prices can be adjusted like any other commodity.
If someone wanted the cost of their finished product to rise even when there is a glut of the raw material, they simply hold back availability. If they want the price to fall when the raw material is high, flood the market with stored inventory.
Gasoline is a retail commodity, just like orange juice, X-Box, cabbage, or underwear. The fact the we placed so much need on it is our fault.
As the current situation stands, the price of crude oil is low because the refineries and speculators have little need for it. The refineries are buying the low price oil but holding much in reserve while cutting production. The distributors are no longer keeping the tanks half full but instead only keeping an as needed supply on hand. The result is the refined product isn't in storage but purchased as available. That means higher gasoline prices at the pumps. Even the service station operators believe the bottom end of usage has arrived so they can halt price reductions knowing the consumption will remain at the current level and price by pure necessity. They even tack on a penny or two and still saw no decrease in sales. They will continue raising rates a penny here and there until consumption decreases, that will be their price point
There is no great secret conspiracy. I believe it’s a greater conspiracy that I can’t get the latest I-Phone at a lower price.