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Old 09-05-2011, 04:26 PM
Status: "Enjoying the winter" (set 5 days ago)
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,885 posts, read 61,653,883 times
Reputation: 37765

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Gas always goes up on a holiday weekend that's traditional for a last minute trip before school starts. Don't expect it to go back down soon, because now people will be driving kids to school and college student will be driving so they will be taking advantage of the increased use. The oil companies will make their profits, regardless of how much people cut down on their driving
or buy more economical cars. I get 32 mpg in my little beater and even so I take the bus now, drive 2 miles to the park & ride. It's actually relaxing as I can read, check news or e-mail on the Android. I still have a 4x4 truck but it's
getting a lot of rest.
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Old 09-07-2011, 09:59 PM
 
Location: Ohio
22,798 posts, read 15,925,757 times
Reputation: 19273
Quote:
Originally Posted by jm31828 View Post
Ok, so oil has been pretty steady for the last month or more around $85 per barrel, even dipping as low as $80 for a while. Gas prices in my area came down to around $3.75 per gallon back when oil was at $90 or so and have stayed there ever since. Until about a week and a half ago- they begain rising a few cents every few days- now up 10 to even 15 cents per gallon- some stations are even back up to $3.95 again. Have any of you seen this kind of a rise lately? And if so, what is the reason? Oil hasn't gone up, and the hurricane didn't damage any refineries as we were told might happen. Is this steep rise all just because of the upcoming Labor Day travel holiday?
The price of a barrel of oil isn't really relevant at this stage of the game.

Your gasoline supply is flat; it's fixed. You can only produce X gallons of gasoline per month and no more. Your refinery system was set up to handle a population of 270 Million Americans up through mid-1990. Your population is now 308 Million and it is the start of the second decade of the 21st Century.

It's a simple matter of supply versus demand of gasoline, not oil.

Also, Summer is over. Time to shut down reformulated and switch back to regular, (except for the handful of States that require reformulated year round). You cannot mix the two, so you have drain whatever reformulated you have before loading up with regular.

There's also the issue of corn, which is up in price. That drives up the price of ethanol, which drives up the price of gasoline.

If you had a major drought in the US, you'd basically be screwed.

A lot of people, myself included, believe the USDA will report lower corn yields in August -- and they will do that tomorrow/today (Thursday September 8). Corn is at historic highs and is now higher than wheat. Some ethanol plants are using wheat with corn, because wheat is $0.19/bushel cheaper. Tyson reported a 21% drop in earnings because of corn prices.

If the USDA reports low corn crop yields, I'd expect corn to get close to $7/bushel (it's $6.75+ right now).

Anyway, the price of gasoline has more to do with the switch from reformulated to conventional, and the price of corn which affects the price of ethanol.
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Old 09-08-2011, 12:07 PM
 
Location: Ohio
22,798 posts, read 15,925,757 times
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Update:

Quote:
International Grains Council has lowered U.S. corn exports forecast for 2011-12 by 8.2% to 44.5 million tons and output by 4% to 325 million tons.Around 0626 GMT, the most active CBOT December corn and wheat futures contracts were trading at $7.5075/bushel and $7.5050/bushel, respectively.
Corn, Market Analysis, Agricultural Markets | Agriculture.com

There you go.
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Old 09-08-2011, 04:25 PM
 
Location: Embarrassing, WA
2,280 posts, read 1,601,837 times
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Quote:
Originally Posted by Mircea View Post
Nice call, hope you had some money down on that one.
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Old 09-08-2011, 06:04 PM
 
Location: Ohio
22,798 posts, read 15,925,757 times
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Quote:
Originally Posted by rkcarguy View Post
Nice call, hope you had some money down on that one.
I don't do stocks or futures. Other people can, I don't have a problem with that.

Cost Inflation will continue to drive food prices up, and maintain pressure on gasoline prices. I also read where some ethanol plants are using wheat with corn, because corn is so much more expensive, and that of course will put undo pressure on wheat prices and keep them high, which will keep food prices high.

Little things like that will negate things like the temporary reduction in Social Security payroll taxes. Assuming one is earning $50,000 per year, then they're saving about $20/week due to the temporary tax reduction, but that $20 is ate up by food, fuel, clothing and other commodities experiencing Cost Inflation due to shortages.
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