gas price manipulation, truely amazing

[solo1]

Evidently a refinery here in Indiana broke down this week..  Instant price increase.  This AM premium is 3.21/ gal.

Does anyone know how this works, what with crude being at a low price.   Yeah, I know. crude  processing.

One refinery, gas price increase over .70 cents instantly!.  i'll bet when the refinery is fixed, prices will be very reluctant to come DOWN as quickly.

[Rams]

The price of fuel went up immediately because the distributors and gas station owners can make a sizeable profit on what fuel they already have in their tanks and what they have contractually purchased.    They are betting the price will be higher for future fuel after the refinery is back in operation.    

Why do they do it, because they can.    The only thing that sets the price of fuel, food or anything else is supply and demand.  

[solo1]

Why do they do it, because they can.    The only thing that sets the price of fuel, food or anything else is supply and demand.   Quote by Rams.

You're absolutely right, because they can.  However,  it is not directly due to supply and demand tho, in this case.

i can think of only two places that are the exception to the Law of supply and demand: gasoline and medical services.

Probably I'm wrong just to save an argument. 

[Rams]

My Dad worked in the refinery business for over forty years,  I also worked in it for about five years.     What I'm about to say is based on that experience.

It's amazing what the engineers and maintenance can do to keep a refinery up and running when the price of fuel is up.    I've seen things that scared me just walking through the alky unit, the cat and other areas but, they will do what they need to do when the price of fuel is high.   There are exceptions to that if they think there is a chance of fire or injury but, I've seen some things I thought were crazy but, they kept the refinery up and producing.   

But, when the price of fuel drops, then, smaller things will cause a refinery management to shut it down.    At that point, all kinds of things that had been deferred will be fixed, replaced or repaired.    The price of fuel is relatively low now so, I'm thinking this was the justification or decision was made to bring the unit(s) down.   

I have no inside information on this particular refinery but, I do have friends that still work the "turn arounds" in refinery.    Mostly inspectors who have to sign off on most repairs done in refineries.   I'll ask and see what I can learn.   

[Robert]

The gas companies complained that they were hurting at the rise of price per barrel of crude but their profits were up. Now that crude has fallen their profits are down, so who really benefited from high crude prices  ???

 They should be brought up on price fixing charges, just like people who charged more for water during the hurricane.

Some had posted about the California gas prices and I found this article its kind of interesting and talks about refining and special gas.

http://www.thehoopsnews.com/2015/07/13/6762/california-gas-prices-exceed-4-50-months/

[BF]

Why do they do it, because they can.    The only thing that sets the price of fuel, food or anything else is supply and demand.   Quote by Rams.

You're absolutely right, because they can.  However,  it is not directly due to supply and demand tho, in this case.

i can think of only two places that are the exception to the Law of supply and demand: gasoline and medical services.

Probably I'm wrong just to save an argument. 

Supply and demand....not so much. 

What causes price spikes is speculators in the futures market. 

[fudgie]

One thing I noticed in all my yrs of going to Sturgis, is that gas is never raised. It surprises me.

[solo1]

Rams, what you said makes sense.  Plus they have an incentive: To artificially raise gas prices when crude is low by less supply, ie shutdown.

Would speculators be involved if this is only a small geographical area like Indiana where the prices went up?  Not sure if this is the case.

[Rams]

Rams, what you said makes sense.  Plus they have an incentive: To artificially raise gas prices when crude is low by less supply, ie shutdown.

Would speculators be involved if this is only a small geographical area like Indiana where the prices went up?  Not sure if this is the case.

Solo,
One thing I know for sure, I worked at three different refineries during my short stint of refinery work and if you've ever driven by one, you know that they always have large tank farms close by.    As I said, the one thing I do know is there was never a shut down or as they call it, a turn around when those tank farms weren't at full capacity so the refinery kept shipping and selling product the whole time it was down but, at a higher price.    Could the situation in Indiana be different?    Well heck yes it could be but, I highly doubt it.

Speculators are also betting on supply and demand and hoping to own the rights to oil when the price goes up.    Basic Capitalism.  If the price goes down, they hold on to their investment as long as they can or take a loss if it doesn't go up.

[BigMac (SoCal)]

Welcome to the world of Southern California. Gas prices will be 80 cents a gallon higher here than in central Calif. Any time they have to shut down for any reason our gas goes up. They have to change the formula twice a year and you can bet it always goes up. Now they are looking into charging a tax per mile because of the cars being more efficient and all the electric cars out here. Not enough taxes to take care of our roads which used to be some of the best in the country. Now we have some of the worst.

[Rams]

Welcome to the world of Southern California. Gas prices will be 80 cents a gallon higher here than in central Calif. Any time they have to shut down for any reason our gas goes up. They have to change the formula twice a year and you can bet it always goes up. Now they are looking into charging a tax per mile because of the cars being more efficient and all the electric cars out here. Not enough taxes to take care of our roads which used to be some of the best in the country. Now we have some of the worst.

Remember that every time you go to the ballot box.   It only takes one pebble to start a land slide.

[dreamaker]

I always thought the gov regulated  a max amount you could raise at a time. Not an overnight, blind sided, price hikes. In my opinion, it is a head game, testing the water to see how much the consumer will tolerate before the get pissed and what they can get away with. This happens over and over and the results is not in our favor, never is. Here in Mich. they said the price hiked $.80 overnight. Its just a game!!

[Willow]

If supply stays, for the time being, unchanged, but speculation or panic guarantees the seller that he can sell all he has in stock at a much higher price, that is still the law of supply and demand controlling the price.  Remember there are two parts to supply and demand and either part can change dramatically in a short order.

We do have some laws in place that protect the public from being unreasonably gouged as a result of the panicked or real change in the supply side or the demand side but they're not really absolute, are they? 

[John Schmidt]

My wife has family in Ohio and I noticed something all the dealers do there. Prices automatically go up every weekend and holidays. After it passes, they tend to drop down to the former price. Good thing I don't live there, I'd raise a huge stink over that practice to get it banned. They do it like clockwork.

[..]

http://www.marketwatch.com/story/why-gas-prices-are-rising-as-oil-falls-to-6-year-lows-2015-08-15

[cookiedough]

40 cent price increase overnight is B.S. plain and simple.
Am sure others have more than a 40 cent price increase overnight.

There is a surplus of crude oil all over the world, so why increase it over 1 single shutdown that much?   

And here I thought gas prices would continue to fall all of this fall into winter as well, I thought wrong.   

[BF]

What I don't understand is why are gas futures allowed to be bought and sold in the first place. 

Gas is a necessity and the price of which shouldn't be subjected to wild price swings. 

Gas/fuel is as much of a life necessity as lights, heat and water......and the price of which should be just as controlled as your light, heat and water bills are. 

Maybe I'm wrong, and I probably am, but that's JMO. 

[J.Mencalice]

Heard a blurb on the national news report yesterday evening that we may be selling oil to Mexico.
Anyone else hear that?
If so, what the heck is that all about?

[The emperor has no clothes]

What I don't understand is why are gas futures allowed to be bought and sold in the first place. 

Gas is a necessity and the price of which shouldn't be subjected to wild price swings. 

Gas/fuel is as much of a life necessity as lights, heat and water......and the price of which should be just as controlled as your light, heat and water bills are. 

Maybe I'm wrong, and I probably am, but that's JMO. 

BF, you are sounding a little Socialistic. You feeling ok my friend ? 

[MP]

My Dad worked in the refinery business for over forty years,  I also worked in it for about five years.     What I'm about to say is based on that experience.

It's amazing what the engineers and maintenance can do to keep a refinery up and running when the price of fuel is up.    I've seen things that scared me just walking through the alky unit, the cat and other areas but, they will do what they need to do when the price of fuel is high.   There are exceptions to that if they think there is a chance of fire or injury but, I've seen some things I thought were crazy but, they kept the refinery up and producing.   

But, when the price of fuel drops, then, smaller things will cause a refinery management to shut it down.    At that point, all kinds of things that had been deferred will be fixed, replaced or repaired.    The price of fuel is relatively low now so, I'm thinking this was the justification or decision was made to bring the unit(s) down.   

I have no inside information on this particular refinery but, I do have friends that still work the "turn arounds" in refinery.    Mostly inspectors who have to sign off on most repairs done in refineries.   I'll ask and see what I can learn.   

But, that does not make "price manipulation".

That makes good economic sense!  EVERY producer of anything will, and does, the same.

[Robert]

Heard a blurb on the national news report yesterday evening that we may be selling oil to Mexico.
Anyone else hear that?
If so, what the heck is that all about?

Since we have become a major player or #1 in the oil production dept ahead of Saudi Arabia Im sure it will be a battle to allow major selling of US natural resources to satisfy the pocket book of the greedy. 2 articles will explain. On the first Money article its a bit confusing at first but hit the button for the timeline and it will show over the years the production output of the US. What is amazing the US has in fact for quite a few years only been slightly behind Saudi Arabia in production.
 

http://money.cnn.com/interactive/news/economy/worlds-biggest-oil-producers/

http://www.wsj.com/articles/u-s-approves-limited-crude-oil-trade-to-mexico-1439570613

[MP]

Heard a blurb on the national news report yesterday evening that we may be selling oil to Mexico.
Anyone else hear that?
If so, what the heck is that all about?

Since we have become a major player or #1 in the oil production dept ahead of Saudi Arabia Im sure it will be a battle to allow major selling of US natural resources to satisfy the pocket book of the greedy. 2 articles will explain. On the first Money article its a bit confusing at first but hit the button for the timeline and it will show over the years the production output of the US. What is amazing the US has in fact for quite a few years only been slightly behind Saudi Arabia in production.
 

http://money.cnn.com/interactive/news/economy/worlds-biggest-oil-producers/

http://www.wsj.com/articles/u-s-approves-limited-crude-oil-trade-to-mexico-1439570613

Is the selling of ANY/ALL of our resources, just to "satisfy the greedy"?

I farm, and raise wheat.  The US sells close to 1/2 of the wheat raised here overseas.  Should we stop selling wheat overseas?  Do we sell it overseas just to "satisfy the greedy"?  Guess I am one of the "greedy".

Trade is what makes the economies of the world work.  Why should we NOT sell overseas?  When you answer, please apply that same answer to at least some of the other products we sell overseas, and why we should stop their sale overseas.

MP

[Robert]

Heard a blurb on the national news report yesterday evening that we may be selling oil to Mexico.
Anyone else hear that?
If so, what the heck is that all about?

Since we have become a major player or #1 in the oil production dept ahead of Saudi Arabia Im sure it will be a battle to allow major selling of US natural resources to satisfy the pocket book of the greedy. 2 articles will explain. On the first Money article its a bit confusing at first but hit the button for the timeline and it will show over the years the production output of the US. What is amazing the US has in fact for quite a few years only been slightly behind Saudi Arabia in production.
 

http://money.cnn.com/interactive/news/economy/worlds-biggest-oil-producers/

http://www.wsj.com/articles/u-s-approves-limited-crude-oil-trade-to-mexico-1439570613

Is the selling of ANY/ALL of our resources, just to "satisfy the greedy"?

I farm, and raise wheat.  The US sells close to 1/2 of the wheat raised here overseas.  Should we stop selling wheat overseas?  Do we sell it overseas just to "satisfy the greedy"?  Guess I am one of the "greedy".

Trade is what makes the economies of the world work.  Why should we NOT sell overseas?  When you answer, please apply that same answer to at least some of the other products we sell overseas, and why we should stop their sale overseas.

MP

If we were importing wheat and people were going hungry here, I would have to say yes. But with gas and oil products we should be paying 2$ at the pump maybe even less and we still import oil. So its not done with the needs of the country in mind its done for profit since other countries pay more for oil artificially inflating prices here. Even speculation is raising the price for a commodity for everyone just to make a profit. We take the natural resources of this country, one is oil and send them to other countries that to me is rape. Oil is a natural resource drilled and reclaimed by using the limited resources deposited here a long time ago. We use oil in the production of wheat one is grown in a year, one in a millennium, one there is an abundance of in the US, one we import so now why don't you tell me why not?
 I also personally want to say I respect and thank you for the fact that you raise wheat. I don't think the farmers are getting paid what they deserve because the middle man again is making the money. Its takes alot of time effort and planning in making a working farm and I would have to say that the farmers should be labeled a natural resource.

[MP]

13 protein wheat is $3.27 at our local elevator.  At times in the 1950's, wheat was that high!

I wonder how many would like to try to survive getting the wages they were getting in the 50's, while still paying for everything at todays prices?  Really sucks.

We will agree to disagree on exports!  LOL

MP

[solo1]

Since I started this post I guess that I can hijack it.  Another question.

Locally, the Indiana farmers, raising corn,  evidently do NOT want to see the production of ethanol lowered or dropped.   They say that corn sold for ethanol production is their 'bread and butter'.

I thought raising corn was for human and livestock consumption. why, now, is it so important to push ethanol when it can cause so many problems plus has a lower energy content than gasoline.  All this in the time when cars are more energy efficient AND crude is plentiful.

Politicians and profiteers, maybe?   

[Rams]

Since I started this post I guess that I can hijack it.  Another question.

Locally, the Indiana farmers, raising corn,  evidently do NOT want to see the production of ethanol lowered or dropped.   They say that corn sold for ethanol production is their 'bread and butter'.

I thought raising corn was for human and livestock consumption. why, now, is it so important to push ethanol when it can cause so many problems plus has a lower energy content than gasoline.  All this in the time when cars are more energy efficient AND crude is plentiful.

Politicians and profiteers, maybe?  

A whole new industry was created with the introduction of ethanol.   It is subsidized by the Federal Government.    I don't blame the farmers for jumping on that band wagon.    This industry was created during the time when the Saudis and others had us by the throat.    That is no longer the case.   The ethanol industry takes a lot of corn out of the consumers grocery stores and feed lots.    But, it's pretty profitable to those who grow it due to the subsidies.    With the world wide glut of petroleum now available, the subsidies should go away but, that will not happen easily.    The industry who was develop to bring forth this fuel doesn't want those subsidies to die off and will let their politicians know that by way of campaign contributions.    IOWs, the taxpayer is screwed.     In a generally free trade country, the glut of oil should cause those who produce alternative fuels to look else where for sales but, the politics of this will not die off easily.

I'm not advocating anything pro or con ethanol, I don't use it but, that's my choice.   The farmers who grow the corn have choice also.   They could grow something else.    No, I am not anti-farmer.

[cookiedough]

farmers sell corn for ethanol to make some money, why not if the price is right for them?  Am sure most would rather see it go towards food consumption, but if it makes them more money,  they have to make a living as well.  

Most V8 vehicles are not really that much more fuel efficient than the 80's trucks/SUV's if you ask me.  Maybe 3-4 more mpg tops, but that is about it.  Technology though making more mpg in most 4 cylinder and 6 cylinder engines has improved more so, plus the days of most modern vehicles burning or leaking 1 qt. of oil every month or so are few and far between.  My old 1978 Buick Skylark 3.8L V6 I drove to college with 150K+ miles on it had to add 1 qt. of oil every month (about every 1000 miles) which at that rate,  I wonder why I ever changed oil in the first place ever.   

The best part of modern oil and vehicle technology for me is the days are long gone as was in the 1980's and prior to change vehicle oil every 3 months/3000 miles for regular conventional oil.  Almost all mfgs. state in today's modern vehicles to change with regular conventional oil (not synthetic) every 6 months or 5000 miles which I have followed now for well over 10 years now but NEVER go over 5000 miles but always is pretty close to that 5K miles. 

As far as shipping oil to Mexico,  Mexico must have finally got some vehicles down there?  

[Rams]

farmers sell corn for ethanol to make some money, why not if the price is right for them?

As I said, I'm not anti-farmer, I don't blame them for selling their product for the best price (or growing the crop that provides the greatest profit margin).

(Maybe I didn't explain my position well enough.)

But, that price is artificially inflated due to the subsidies that we, the taxpayer are being billed for.
I'm not against the farmer, I'm against the subsidy.    What the farmer grows is his business, I'm all for the farmer making a good living but, I am not for the American taxpayer paying for an industry we don't need.

BTW, ethanol is not as an efficient fuel as petroleum based gasoline.    Check it out, ethanol is not a bad back up fuel if, we don't have another option but, we do have that option.

[solo1]

Rams, i knew it was subsidized, that's why I mentioned politicians.  It makes no sense from the energy standpoint but they created a whole new industry and just like the Unaffordable Health Care Act, it's not going away soon.

[Rams]

My Dad worked in the refinery business for over forty years,  I also worked in it for about five years.     What I'm about to say is based on that experience.

It's amazing what the engineers and maintenance can do to keep a refinery up and running when the price of fuel is up.    I've seen things that scared me just walking through the alky unit, the cat and other areas but, they will do what they need to do when the price of fuel is high.   There are exceptions to that if they think there is a chance of fire or injury but, I've seen some things I thought were crazy but, they kept the refinery up and producing.   

But, when the price of fuel drops, then, smaller things will cause a refinery management to shut it down.    At that point, all kinds of things that had been deferred will be fixed, replaced or repaired.    The price of fuel is relatively low now so, I'm thinking this was the justification or decision was made to bring the unit(s) down.   

I have no inside information on this particular refinery but, I do have friends that still work the "turn arounds" in refinery.    Mostly inspectors who have to sign off on most repairs done in refineries.   I'll ask and see what I can learn.   

But, that does not make "price manipulation".

That makes good economic sense!  EVERY producer of anything will, and does, the same.

I agree.   Was just explaining what I had witnessed.

[Skinhead]

What I don't understand is why are gas futures allowed to be bought and sold in the first place. 

Gas is a necessity and the price of which shouldn't be subjected to wild price swings. 

Gas/fuel is as much of a life necessity as lights, heat and water......and the price of which should be just as controlled as your light, heat and water bills are. 

Maybe I'm wrong, and I probably am, but that's JMO. 

Careful, if the lefties find out gas is a necessity, there will be Obama gas that the working man pays for and the FSA people get for free, and then sell at half price to get cash because they don't have a car to burn it in. (or they just need to buy more crack)

[Rams]

Rams, i knew it was subsidized, that's why I mentioned politicians.  It makes no sense from the energy standpoint but they created a whole new industry and just like the Unaffordable Health Care Act, it's not going away soon.

solo,
I whole heartedly agree.      Didn't mean to insinuate you didn't know about the subsidy but, others may not know.   BTW, that's a beautiful Valkyrie you have there. 

Ron

[MP]

I am not going to quote any one post, because so many of you are WRONG!

Ethanol is not subsidized any more.  It was in the beginning, but the subsidies ENDED 1/1/12!  They have been gone for over 3 years!

http://www.npr.org/2012/01/03/144605485/congress-ends-era-of-ethanol-subsidies

This from NPR, hardly a conservative bastion!

Ethanol is used as an oxigenator, to meet Federal emissions standards.  Can't remember the name of what used to be used, but it was found to cause cancer, and I believe is not used anymore, or at least in very small quantities.  Ethanol is used for that.  Adds oxygen to the mix, causing the fuel mixture to burn cleaner.

I raise wheat, too dry here to raise much corn.  So, I have no personal ax to grind in this matter, other than wanting the truth out there, and not Urban Legends!

"Don't criticize a farmer, with your mouth full"!

MP

[scooperhsd]

The chemical prior to Ethanol (which does most small gas motors no good) was MTBE - which isn't good for humans..

If there was a practical way to remove ethanol from the gas that goes into my older vehicles (the Valk and my 1988 Acura Integra) - I'd seriously consider the idea. ethanol does bad things to the hoses and seals of older vehicles.

BTW - my VW diesels say 10,000 miles between oil changes on sythetic oil . There are some oils I would go further than that.

And yes - I grew up on the plains of Kansas - winter wheat is still the big crop out there.

[Willow]

Is the selling of ANY/ALL of our resources, just to "satisfy the greedy"?

MP, I think the rule of thumb for setting a price at what the buyer will pay is good business sense if the speaker (typer) is on the selling end of the transaction.  It's only to  "satisfy the greedy" if the speaker (typer) is on the buying end.

We are an international community.  I wonder what our friends across the pond think of us Americans whining about the price of gasoline.  Don't misunderstand me, I do tend to buy fuel at the lowest cost I can find from a quality distributor, but then I would do that whether the price were thirty cents or five dollars per gallon.

Just to keep us safe don't anyone post the conversion table for euros to dollars.    

[solo1]

solo,
I whole heartedly agree.    cooldude  Didn't mean to insinuate you didn't know about the subsidy but, others may not know.   BTW, that's a beautiful Valkyrie you have there.   Quote by

Ron 

Ron, I phrased that wrong. I knew that you probably knew that I knew   (convoluted sentence).

BTW, I sold my Valk quite some time ago to L'ill D in New York.  Is that the one you were mentioning?