Gas Pump Prices No Cause For Complaint as Oil Prices Fall

Not logged in [Log In] [Sign Up] [Points Leaders] [My Profile]

Friday, November 21, 2008 2:14:42 PM

Featured Sponsor


Add gas prices to your web site. Click here to find out how!

GasBuddy News Article

Gas Pump Prices No Cause For Complaint as Oil Prices Fall Tuesday, August 19, 2008
ForexTV -- (CEP News) Ottawa - If it feels like gas pump prices haven't fallen in lockstep with world oil prices and you believe filling up your car should be cheaper, think again, says a Canadian oil industry analyst. Pump prices didn't rise in lockstep with oil futures, so they won't be falling with them either, said Catherine Hay, senior associate with the consulting firm M.J. Ervin and Associates. "Pump prices never rose to reflect the highest point in oil prices," said Hay, who noted the now infamous WTI rise to $147 US per barrel on July 11 was fleeting and was only a futures price, and not what a refiner would have paid for oil being refined into gasoline in July. "If it didn't rise as much, it can't be expected to go down as much either." Hay said gas pump price increases have actually lagged oil futures increases heading into the summer. Refiner margins have been squeezed, as a result, although retailer margins have increased marginally.
Visit ForexTV for full article

Message Forum - Read Message

Category: Daily News Article Discussions > Topics		Add to favorite topics Post New Topic
Rate this topic: Low 1 - 2 - 3 - 4 - 5 High Avg rating: 0.0 (0 votes)

Author	Topic: Gas Pump Prices No Cause For Complaint as Oil Prices Fall	Post a Reply Back to Topics

JT Moderator	Message Posted: 8/19/2008 12:43:28 PM	Ignore JT Report Abuse
	Tuesday, August 19, 2008 ForexTV -- (CEP News) Ottawa - If it feels like gas pump prices haven't fallen in lockstep with world oil prices and you believe filling up your car should be cheaper, think again, says a Canadian oil industry analyst. Pump prices didn't rise in lockstep with oil futures, so they won't be falling with them either, said Catherine Hay, senior associate with the consulting firm M.J. Ervin and Associates. "Pump prices never rose to reflect the highest point in oil prices," said Hay, who noted the now infamous WTI rise to $147 US per barrel on July 11 was fleeting and was only a futures price, and not what a refiner would have paid for oil being refined into gasoline in July. "If it didn't rise as much, it can't be expected to go down as much either." Hay said gas pump price increases have actually lagged oil futures increases heading into the summer. Refiner margins have been squeezed, as a result, although retailer margins have increased marginally. Visit ForexTV for full article

REPLIES (newest first)

First

Next Last

Bill313 Champion Author Kansas City Posts:5,363 Points:746,465 Joined:Sep 2006	Message Posted: 8/24/2008 1:33:50 PM	Ignore Bill313 Report Abuse
	agree
PatAZ All-Star Author Tucson Posts:861 Points:8,600 Joined:May 2008	Message Posted: 8/24/2008 11:39:58 AM	Ignore PatAZ Report Abuse
	Just because someone is an oil industry analyst doesn't mean he or she won't lie to us.
eaglev All-Star Author Oklahoma City Posts:983 Points:333,120 Joined:Jul 2005	Message Posted: 8/23/2008 5:00:57 PM	Ignore eaglev Report Abuse
	Dems want the high price in oil to make you mad and vote for change. I agree vote them out of power and allow us to start drilling for our own oil.
POLELANE Champion Author Ohio Posts:2,253 Points:239,175 Joined:Mar 2008	Message Posted: 8/20/2008 3:57:52 PM	Ignore POLELANE Report Abuse
	no many alternate choices
Rajah Champion Author Illinois Posts:2,160 Points:914,015 Joined:Jul 2005	Message Posted: 8/20/2008 12:41:25 PM	Ignore Rajah Report Abuse
	I agree, mckellyb, we always see a spike up and a trickle down... How about a step-function decrease in price and a trickle back up for a change?
jb47 All-Star Author Shreveport Posts:512 Points:289,850 Joined:Aug 2007	Message Posted: 8/20/2008 12:04:45 PM	Ignore jb47 Report Abuse
	Instead of seeing gasoline price comparisons from today, 30 days ago, and a year ago, I would rather see what a barrel of oil is selling for today and the price of a gallon of gas is today. Then what was the price of a gallon of gas back when a barrel of oil was selling at todays price. then we will see just how much they lockstep. I'll bet we are paying more for a gallon of gas at todays oil price then what we were paying when oil was at todays price back several months ago
mckellyb Champion Author Las Vegas Posts:3,386 Points:642,680 Joined:Sep 2005	Message Posted: 8/20/2008 11:16:53 AM	Ignore mckellyb Report Abuse
	Directly proportional, no, but correlated, yes. When oil goes up $5, you see a 15 cent rise in gasoline that SAME DAY. "We have to pay for the oil on the tanker..." is one rationale I've heard. However, when the price drops...well... If you look at spot market commodity pricing, you'll see gasoline is still a solid 30-40 cents higher than it should be, based on the retail/commodity price paid by consumers not but 2 months ago. $4.10 gasoline at the pump = $3.80 in spot markets. Right now, I mean this very-freakin'-minute, spot gasoline is $2.845... retail gasoline, here in inexpensive central TX, is still at least $3.55. It should be $3.15, or so.
Don20 Champion Author Oklahoma City Posts:1,530 Points:1,014,745 Joined:Mar 2005	Message Posted: 8/20/2008 10:58:54 AM	Ignore Don20 Report Abuse
	It needs to go much lower..
rusty_armor Sophomore Author Texas Posts:106 Points:41,840 Joined:Jul 2008	Message Posted: 8/20/2008 10:58:31 AM	Ignore rusty_armor Report Abuse
	One of the few insightful articles saying that the price of gas at the pump is not directly connected to the price of crude. The spot market is only a percentage of crude costs, and is mostly paper driven. It is not necessarily the cost to refiners.
techieBC Rookie Author Vancouver Posts:27 Points:98,740 Joined:May 2008	Message Posted: 8/20/2008 10:58:01 AM	Ignore techieBC Report Abuse
	We seem to see a rise in prices at the pump every time oil prices go up...
Bannack All-Star Author Florida Posts:750 Points:134,445 Joined:May 2008	Message Posted: 8/20/2008 10:54:56 AM	Ignore Bannack Report Abuse
	they should fall.
scrounger Champion Author Vancouver Posts:6,271 Points:1,683,595 Joined:Mar 2003	Message Posted: 8/20/2008 10:52:56 AM	Ignore scrounger Report Abuse
	gas prices should fall in step with falling oil prices.......that is how they raise them!
techque All-Star Author St. Louis Posts:671 Points:954,000 Joined:Apr 2005	Message Posted: 8/20/2008 10:50:26 AM	Ignore techque Report Abuse
	gas prices are still a full DOLLAR higher than same time last year, so don't be celebrating just yet. and keep your gas guzzlers parked !!
AuburnTim Champion Author Indiana Posts:1,348 Points:370,830 Joined:May 2005	Message Posted: 8/20/2008 10:48:18 AM	Ignore AuburnTim Report Abuse
	bullpuckie I'll complain as long as they are way to high and big oil makes huge profits its wrong wrong wrong
mfeldstein All-Star Author Ontario Posts:558 Points:430,110 Joined:Feb 2007	Message Posted: 8/20/2008 10:47:53 AM	Ignore mfeldstein Report Abuse
	For all the complainers, there's a crucial point made in this article -- gas prices are not and have never been directly proportional to oil prices. Oil prices deal with future contracts, not with the cost today. And there are other variables involved also. If we want to have an intelligent debate on the issue, we should educate ourselves and understand all the factors involved.
MG_Sputnik All-Star Author Philadelphia Posts:640 Points:443,505 Joined:Apr 2006	Message Posted: 8/20/2008 10:46:19 AM	Ignore MG_Sputnik Report Abuse
	Prices are still way too high.
DarthDadJr Veteran Author Virginia Posts:457 Points:95,310 Joined:Jul 2008	Message Posted: 8/20/2008 10:45:03 AM	Ignore DarthDadJr Report Abuse
	If you haven't noticed...gas always rises fast and falls slowly.
copperhead8 Champion Author Boston Posts:5,493 Points:1,207,120 Joined:Dec 2004	Message Posted: 8/20/2008 10:44:47 AM	Ignore copperhead8 Report Abuse
	Just keep dropping at the pump.
RochBear Champion Author Minnesota Posts:1,758 Points:505,580 Joined:May 2006	Message Posted: 8/20/2008 10:44:17 AM	Ignore RochBear Report Abuse
	RE-Read the artical. Refiners were not paying $147/bl, that was a futures market. The artical is saying that the actual price paid by refiners is not what the current futures price is. So before you go and say this is "a load of crap", learn how the market works! Now, if you want to do something about it (besides getting educated), push for alternatives to oil for transportation. Then it won't matter to you what the price of gas is.
Laser917 Champion Author Minnesota Posts:2,388 Points:798,055 Joined:Oct 2005	Message Posted: 8/20/2008 10:38:40 AM	Ignore Laser917 Report Abuse
	Just say NO to the idiots in congress - Vote them out.
NissanGirl Veteran Author Oregon Posts:302 Points:167,490 Joined:Jan 2008	Message Posted: 8/20/2008 10:37:28 AM	Ignore NissanGirl Report Abuse
	That's a load of crap! She must be in on the oil profits.
acknot All-Star Author Seattle Posts:877 Points:643,550 Joined:Sep 2003	Message Posted: 8/20/2008 10:31:51 AM	Ignore acknot Report Abuse
	Percentage wise, gas is not falling the same as oil.
NavyEOD Champion Author Los Angeles Posts:1,966 Points:432,365 Joined:Jul 2007	Message Posted: 8/20/2008 10:31:14 AM	Ignore NavyEOD Report Abuse
	This happens all the time. It's price gouging.
r651981 All-Star Author Columbus Posts:502 Points:424,975 Joined:May 2006	Message Posted: 8/20/2008 10:30:47 AM	Ignore r651981 Report Abuse
	Reduced pump prices cannot be bad, unless they spawn a return to a culture of fuel consumption abuse. A 30 cent drop in pump prices should not be an opportunity to drive your 4 wheel drive truck up the interstate at 75 M. P. H. so you can waste fuel.
Pede Champion Author New Jersey Posts:1,099 Points:147,605 Joined:Apr 2007	Message Posted: 8/20/2008 10:30:35 AM	Ignore Pede Report Abuse
	The gas prices have a way lot more to fall before people will spend there money on vvacations. Now that the vacation season is almost over I do not think it will ever catch up and the business will be hurting.
spartangas Sophomore Author Lansing Posts:146 Points:62,950 Joined:Dec 2006	Message Posted: 8/20/2008 10:30:14 AM	Ignore spartangas Report Abuse
	Oh yeah, gas prices hardly went up since last year, so there is no room for them to fall. According to gas buddy, gas prices one year ago were $2.78 a gallon, today they are $3.71 a gallon nationally. (USA) That is obviously the same number, so there is no room for the price to come down....
Mooseman1 Champion Author Manitoba Posts:2,037 Points:310,855 Joined:Jul 2007	Message Posted: 8/20/2008 10:27:45 AM	Ignore Mooseman1 Report Abuse
	Prices will have to fall allot before complaining becomes unjustified.
Netscaper113 Champion Author New York City Posts:5,606 Points:1,097,095 Joined:Aug 2005	Message Posted: 8/20/2008 10:25:26 AM	Ignore Netscaper113 Report Abuse
	Keep on falling
Brockvillian Veteran Author Ontario Posts:437 Points:277,245 Joined:May 2007	Message Posted: 8/20/2008 10:24:51 AM	Ignore Brockvillian Report Abuse
	Really! I think the prices of fuel in Canada definitely went up based on the futures market and it certainly felt like it.
hwnguy All-Star Author Honolulu Posts:625 Points:142,655 Joined:Apr 2008	Message Posted: 8/20/2008 10:24:47 AM	Ignore hwnguy Report Abuse
	Exactly what I said in the other thread. Oil prices and gold on the rise again.
Gerund1 Champion Author Toronto Posts:1,147 Points:828,105 Joined:Apr 2003	Message Posted: 8/20/2008 10:23:53 AM	Ignore Gerund1 Report Abuse
	This news feed must be at least two days old. The price of oil has been increasing over the last two days.
gas1prospector Champion Author Toronto Posts:2,003 Points:428,570 Joined:Aug 2007	Message Posted: 8/20/2008 10:21:55 AM	Ignore gas1prospector Report Abuse
	Isn't that just great, they can make money while losing money. This miracle has now attracted the attention of two of the richest men in the World. See - Shopping Trip? Yes folks Warren Buffet and Bill Gates visited the Tar Sands and liked what they saw. Will they grab a piece of the pie, like so many other foreign interests? Are they planning to develop US Oil Shale? See - 5 times Saudis reserves Or maybe, they just like our beer? Stay tuned for future episodes of 'Days of Oil Gripes'. [Edited by: gas1prospector at 8/20/2008 10:26:17 AM EST]
gasman50 Champion Author Portland Posts:1,315 Points:820,515 Joined:Nov 2005	Message Posted: 8/20/2008 10:21:32 AM	Ignore gasman50 Report Abuse
	Down baby, down
laddyboy62 Champion Author Riverside Posts:1,586 Points:995,310 Joined:Mar 2005	Message Posted: 8/20/2008 10:20:56 AM	Ignore laddyboy62 Report Abuse
	what ever the heck it is...fallen 60cents a gallon since a month ago today
katkAL Sophomore Author Alabama Posts:227 Points:80,435 Joined:May 2008	Message Posted: 8/20/2008 10:20:42 AM	Ignore katkAL Report Abuse
	The pump prices sure aren't falling as fast as they rose!
KopterDoctor Veteran Author Alabama Posts:318 Points:54,045 Joined:May 2008	Message Posted: 8/20/2008 10:20:26 AM	Ignore KopterDoctor Report Abuse
	No cause for complaint!?! Someone is smoking crack!
eaglev All-Star Author Oklahoma City Posts:983 Points:333,120 Joined:Jul 2005	Message Posted: 8/20/2008 10:19:12 AM	Ignore eaglev Report Abuse
	The real cost at the pump takes 2 months, so they go up on news and go down when their cost goes down.
SeerLV All-Star Author Las Vegas Posts:537 Points:132,765 Joined:Jun 2008	Message Posted: 8/20/2008 10:18:34 AM	Ignore SeerLV Report Abuse
	Bull
justjosey Rookie Author North Carolina Posts:23 Points:13,210 Joined:Aug 2008	Message Posted: 8/20/2008 10:17:14 AM	Ignore justjosey Report Abuse
	Wonder why gas prices rise the same day futures rise. But takes days or weeks to fall when futures fall?
no1doc All-Star Author Milwaukee Posts:932 Points:166,925 Joined:Oct 2007	Message Posted: 8/20/2008 10:12:59 AM	Ignore no1doc Report Abuse
	You are correct tbybee
tbybee Veteran Author Omaha Posts:302 Points:109,575 Joined:Apr 2008	Message Posted: 8/20/2008 10:10:11 AM	Ignore tbybee Report Abuse
	Maybe there isn't a direct correlation, but I know they always jump in larger increments than they fall.
docwilly All-Star Author Scranton Posts:524 Points:101,435 Joined:Feb 2008	Message Posted: 8/20/2008 10:09:48 AM	Ignore docwilly Report Abuse
	Uh Huh!!! SURE
Dennis783 Champion Author Wisconsin Posts:5,608 Points:1,123,920 Joined:Sep 2005	Message Posted: 8/20/2008 10:08:55 AM	Ignore Dennis783 Report Abuse
	Oh come on, oil prices rise, gas prices rose... demand dropped gas prices rose... now this bull
bluebird1 Champion Author Toronto Posts:7,357 Points:1,499,600 Joined:May 2004	Message Posted: 8/20/2008 10:08:53 AM	Ignore bluebird1 Report Abuse
	Heard this argument so many times & it doesn't float the windfall profits big Oil has posted. The holes in this are cavernous, like why does it take so long for gas prices to go down but go up immediately...here it states the WTI cost of Oil actually squeezed their margins, but most refineries are also in the oil production side - hence they are on the other side as well raking in more margin as well. Also, the gas prices over the yr up to oil's peak actually increased within 1% of that of Oil...so where is the squeeze - I'd say on the public. The refiner margin is not the only revenue for most of the co's involved, hence not even relevant, except for one or two co's.
flatcoatfun All-Star Author Orlando Posts:655 Points:196,655 Joined:Nov 2007	Message Posted: 8/20/2008 10:08:18 AM	Ignore flatcoatfun Report Abuse
	yea they jump up faster and fall slower.....
tomok Champion Author Portland Posts:9,640 Points:720,085 Joined:Aug 2006	Message Posted: 8/20/2008 10:06:22 AM	Ignore tomok Report Abuse
	Fuel prices go up fast - when the crude oil prices increase. When crude oil prices falls - the fuel prices should do the same. But, fuel prices do not go down in the same proportion as crude oil. Thats been proven on this site all the time.
ledoy Champion Author Dayton Posts:5,100 Points:1,034,425 Joined:Aug 2005	Message Posted: 8/20/2008 10:05:22 AM	Ignore ledoy Report Abuse
	te pump prices just dont seem to fall fast enough and theres always a delay
rbdesigns Veteran Author Modesto Posts:492 Points:170,690 Joined:May 2008	Message Posted: 8/20/2008 10:04:14 AM	Ignore rbdesigns Report Abuse
	Of course they have an excuse for not lowering prices!
GasholeMI Champion Author Lansing Posts:1,495 Points:114,740 Joined:Jul 2008	Message Posted: 8/20/2008 10:03:32 AM	Ignore GasholeMI Report Abuse
	Oil back over $116 today. Second day of slight rises. Hope we can reverse this trend.
thedennis64 All-Star Author Dallas Posts:731 Points:726,295 Joined:Aug 2003	Message Posted: 8/20/2008 10:01:13 AM	Ignore thedennis64 Report Abuse
	Really...prices are still too high!