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Desert Detroiter, gas prices work off supply and demand....just not US supply and demand but GLOBAL.
There have been instances of speculation in the markets (futures etc.) but I think the major disconnect that occurs is that todays oil being sold is the gas that is sold months from now. Once at the gas station, it takes time to sell as well.
This creates lag in the pricing chain. There can also be a variety of other issues that cause regional prices to hiccup but for the most part....it is indeed supply and demand.
Gas prices have been pretty dang low for about 3 years now so of course no one says a peep. The minute they start to ramp up everyone comes out of the wordwork about how it's some sort of price gouging conspiracy.
Heck, we've had posts on this very forum where they started mocking budget shortfalls in oil producing states which were driven by declining industry as oil prices fell.
It's a topic driven heavily by perception bias.
Sorry to not agree . The speculators are pushing the price. The 30-60 day lag between RBOB and consumer price increases has gone away. I saw RBOB at $2.07 yesterday and prices are now at $2.729.
In the United States, I’ve never seen any correlation between gas price spikes and demand...at least not since the 70’s.
One example was gas prices spiking during the housing bubble.
You had a major surge of cash flooding into the economy via mortgage loans, all sorts of construction activity, economic activity was off the charts for a brief period. I remember we saw a major spike in gasoline prices then -- I believe it was summer of 05 or 06.
At the time people were searching for all sorts of explanations, but in hindsight it is now obvious that it was just a spike in economic activity that caused a spike in gasoline prices.
In particular, it was a spike that no one predicted. The mortgage bubble and its related growth were an anomaly that refiners would've had no way of predicting ahead of time. Which is another contributing factor.
Quote:
Originally Posted by desertdetroiter
Gas supplies are bountiful right now. And demand isn’t up appreciably.
What data are you relying on to make these two conclusions, that gas supplies are 'bountiful' and demand isn't up appreciably?
I'm not aware of any dataset that you and I would have access to that would tell us 'total global gasoline supply'
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
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Quote:
Originally Posted by le roi
One example was gas prices spiking during the housing bubble.
You had a major surge of cash flooding into the economy via mortgage loans, all sorts of construction activity, economic activity was off the charts for a brief period. I remember we saw a major spike in gasoline prices then -- I believe it was summer of 05 or 06.
What data are you relying on to make these two conclusions, that gas supplies are 'bountiful' and demand isn't up appreciably?
I'm not aware of any dataset that you and I would have access to that would tell us 'total global gasoline supply'
The worst gas prices I've seen in my life were in 2008 and in 2011, gas here hit $4.40/gallon in the summer of 2008, while in April of 2011, gas hit about $3.95/gallon
In the United States, I’ve never seen any correlation between gas price spikes and demand...at least not since the 70’s.
Also, check out a chart of what gasoline prices did during the 3Q08 / 4Q08 during the beginning of the financial crisis. Economic activity ground to a halt, causing gasoline demand to collapse, and gasoline prices collapsed right along with it.
The worst gas prices I've seen in my life were in 2008 and in 2011, gas here hit $4.40/gallon in the summer of 2008, while in April of 2011, gas hit about $3.95/gallon
One example was gas prices spiking during the housing bubble.
You had a major surge of cash flooding into the economy via mortgage loans, all sorts of construction activity, economic activity was off the charts for a brief period. I remember we saw a major spike in gasoline prices then -- I believe it was summer of 05 or 06.
At the time people were searching for all sorts of explanations, but in hindsight it is now obvious that it was just a spike in economic activity that caused a spike in gasoline prices.
In particular, it was a spike that no one predicted. The mortgage bubble and its related growth were an anomaly that refiners would've had no way of predicting ahead of time. Which is another contributing factor.
What data are you relying on to make these two conclusions, that gas supplies are 'bountiful' and demand isn't up appreciably?
I'm not aware of any dataset that you and I would have access to that would tell us 'total global gasoline supply'
I posted links to demand and production numbers earlier, one of which stated that March demand set a record, but apparently they were ignored.
Re getting gas, I usually stick to the area bound by FM 1488, FM 2978, Huffsmith-Kohrville, Boudreaux, SH 249, FM 1960, Aldine Westfield, E Louetta, and I-45.
I usually do a GasBuddy.com search.
My last fill up was late last week, and I paid $2.33 at the Walmart Neighborhood Store at Cypresswood and Aldine Westfield.
The cheapest I saw yesterday (Thursday) in The Woodlands was $2.45, and driving elsewhere...$2.39 at an independent station on Kuykendahl.
We generally use Costco. Their price runs around a nickle a gallon less. Add in the 3% discount on their Visa and the price is hard to beat.
Trump has thrown all the right under the bus, tweeting about oil prices going to high.
You just cant make this stuff up, POTUS will now claim to lower the cost after his actions and policies have helped lead the speculative rise.
Good for him! I don't know what he is going to do about it, but OPEC manipulation and now OPEC/Russian manipulation of the oil supply has been going on for decades. It is not all bad. Without, artificially inflated prices we would never have developed shale oil to the extent it has. But, I am sick of paying through the nose to build guilded palaces for middle eastern sheiks and fabulous wealth for Russian oligarchs. IF Trump can figure how to break the back of the oil cartel, I will give him his due.
No one seems to acknowledge the correlation, but every time gas prices go North of 3 bucks a gallon and stays there for a while the economy craps out. You'd almost think our entire system was built on fossil fuel energy and isn't very resilient to high energy prices or something.
Guess we'll see if it happens again...
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