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The wholesale price closed today at $2.56/gallon and retail gasoline prices tend to be at a $0.75 to $1.25/gallon premium to the wholesale gasoline price as traded on the New York Mercantile Exchange, which would indicate a retail price of $3.31 to $3.81/gallon, depending on where in the U.S. the retail pump might be located.
Could you please give a link so I can follow that wholesale gasoline price?
I'm not blind Walter. It's been going on for years.
What you see is a function of what is reported, which is not what actually occurs:
Step 1: the wholesale price of gasoline increases, but this is almost never reported by the MSM and often not reported by the financial media.
Step 2: very quickly this is followed by an increase in the price of crude oil, more or less proportionate to the increase in the price of gasoline. This is reported by the MSM.
Step 3: the retail price of gasoline is marked up to reflect a higher wholesale price of gasoline. Most people know this because they see it when they pull into a gas station for a fill-up.
So, for most folks, they see Step 2 as Step 1, when it isn't, and then they see Step 3 as Step 2, which it, too, isn't, and it appears to them, because they are unaware of the real Step 1, that an increase in the price of crude oil led to an increase in the retail price of gasoline, which is the optical illusion.
What you see is a function of what is reported, which is not what actually occurs:
Step 1: the wholesale price of gasoline increases, but this is almost never reported by the MSM and often not reported by the financial media.
Step 2: very quickly this is followed by an increase in the price of crude oil, more or less proportionate to the increase in the price of gasoline. This is reported by the MSM.
Step 3: the retail price of gasoline is marked up to reflect a higher wholesale price of gasoline. Most people know this because they see it when they pull into a gas station for a fill-up.
So, for most folks, they see Step 2 as Step 1, when it isn't, and then they see Step 3 as Step 2, which it, too, isn't, and it appears to them, because they are unaware of the real Step 1, that an increase in the price of crude oil led to an increase in the retail price of gasoline, which is the optical illusion.
If what you say is true, that crude oil prices are more or less a direct function of gasoline prices, then how does one explain this price action below?
I can tell you how - blatant price-fixing by refiners.
If what you say is true, that crude oil prices are more or less a direct function of gasoline prices, then how does one explain this price action below?
I can tell you how - blatant price fixing by refiners.
Besides comparing a wholesale price with a lagging retail price, you also have to be aware that over the past year, the crack spread -- the difference between prices received for gasoline, heating oil and other distillates versus the price paid for buying crude oil -- has widened because of the high price of wholesale gasoline in Europe, and because the U.S. has to import 20% or so of domestic gasoline requirements, the U.S. importers have to match the price being bid by the Europeans for European produced gasoline and even for Caribbean produced gasoline.
A year ago, the crack spread was $8.53 a barrel. Friday it was $30.90 a barrel (in mid-August, it was more than $38 a barrel).
Besides comparing a wholesale price with a lagging retail price, you also have to be aware that over the past year, the crack spread -- the difference between prices received for gasoline, heating oil and other distillates versus the price paid for buying crude oil -- has widened because of the high price of wholesale gasoline in Europe, and because the U.S. has to import 20% or so of domestic gasoline requirements, the U.S. importers have to match the price being bid by the Europeans for European produced gasoline and even for Caribbean produced gasoline.
A year ago, the crack spread was $8.53 a barrel. Friday it was $30.90 a barrel (in mid-August, it was more than $38 a barrel).
Walter, I believe in capitalism and free markets in most instances. But sometimes you gotta speak in layman's terms to avoid confusing people. I may understand what you're saying, but I'm certain you are just clouding the issue for suzook, fashion girl and anyone else reading this.
The crack spread is created as a result of the crude oil products, ie, gasoline + heating oil + distillates create the crack spread, not the other way around. Meaning refiners and oil companies can alter this to their advantage. So that has no bearing on why gasoline is so artificially inflated the past 6 months. It's not demand either ... demand for gasoline did drop and has been weak all year - what do the refiners do to prevent gas prices from dropping? They cut refinery run rates (for everyone else reading, they simply stopped making as much gasoline by about 10% [89% to 82% run rate]) which was the main cause for us paying close to $4 a gallon all year. So much for the demand-drives-price theory.. not with big oil it doesn't always work that way... if they left supply where it was (run rates at 89%), gas prices would have tumbled and it would have saved anyone that drives hundreds of dollars over the last 6 months. Sure it would have cost them a few billion in profits, but it ended up costing drivers that money instead.
There's really no way around it, they fixed prices. I appreciate capitalism, but at some point someone needs to stand up and punch a few of these oil execs in the nose. Or maybe we need to create US-owned refineries. I consider this an essential service and you know, as I do, gasoline demand is essentially inelastic (meaning no matter where gas prices go, demand changes very little as a result, ie, they got us by the ba11s).
But gas demand actually did drop...The reason gas demand was down is because people are hurting in this economy. So instead of letting prices come in, big oil/refiners wanted to maximize profits even at a time when we're on the cusp of another major recession. That's not capitalism, that's crony capitalism. Call me a socialist or whatever you want, people should wake up to this and we should tax the living daylights out of these companies for their actions. People aren't stupid either - I mean, everyone knows big oil's crooked. And to think we are still dishing out billions a year in tax subsidies to these cretins.
The guy in the business district of Rocky Point is now 3.68
Is that the citgo or bp...im thinking you are referring to citgo. The bp guy is always expensive but he does a great business...probably because he is full service and people dont want to pump their own.
I have noticed that the gas stations on 347 are higher priced up in northern suffdump but along 25 in the finer areas like coram are much lower..
Walter, I believe in capitalism and free markets in most instances. But sometimes you gotta speak in layman's terms to avoid confusing people.
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The crack spread is a refinery's gross operating margin, and it is the gasoline price situation in Europe that has led to a sharp increase in the crack spread.
Is that the citgo or bp...im thinking you are referring to citgo. The bp guy is always expensive but he does a great business...probably because he is full service and people dont want to pump their own.
I have noticed that the gas stations on 347 are higher priced up in northern suffdump but along 25 in the finer areas like coram are much lower..
The station by Broadway. In Coram the millenium station by the home depot and the one next to it usually are on the lower end but I haven't been over there in a few weeks so i'm not sure of their current prices.
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