Gas Prices should start droping soon....

[Drew Dowdell]

Link

Situation

1. US refiners set to dramatically increase fuel production over next few weeks

2. At least 6 oil refineries restarting major processing units, 3% of US capacity

3. Should cause gasoline prices to drop as supply increases

4. Crude demand will increase now that refineries coming back on line

5. But July 4th peak driving season increases demand

6. Crude already up $1/bbl on anticipation of stronger demand

Significant Points

1. Stretch of refinery maintenance, unplanned outages plagued industry since winter

2. Resulting in gasoline stockpile crunch in middle of summer driving season

3. Raw crude inventories climbed to highest level since 1998

4. Oil refineries running at 89.4% of capacity in week ended June 22, norm 95%

Link 2

Among the biggest refinery restarts, Exxon Mobil is planning to fully restart a 240,000-barrel-per-day crude oil processing unit at its refinery in Beaumont, Texas, by early July.

BP is also in the process of restarting a 75,000 bpd crude unit at its refinery in Whiting, Indiana -- the fourth largest oil refinery in the United States -- a source familiar with the plant said.

The unit is one of two that has been shut at the plant since a fire in early April.

[bowtie_dude]

Gas was down in Lexington to 2.68 for 87 until yesterday, when it jumped back UP to 2.92 for who knows what reason.

But this is very welcome news if gas prices will indeed drop due to these reasons.

[the_yellow_dart]

Gas was down in Lexington to 2.68 for 87 until yesterday, when it jumped back UP to 2.92 for who knows what reason.

But this is very welcome news if gas prices will indeed drop due to these reasons.

I doubt they'll drop much. The gas companies all found out how much we were willing to pay during Katrina with basically no drop in demand. Why lower prices?

[AxelTheRed]

Yeah, I sure hope big oil cuts us a break soon. $45 every week to fill up my tank is getting pretty damn expensive for me.

[CSpec]

I doubt they'll drop much. The gas companies all found out how much we were willing to pay during Katrina with basically no drop in demand. Why lower prices?

Since there is more than one supplier, one company will say "hey i can make a lower price than that guy and get a ton more of the market" and the other guy will respond, and they will go back and forth until the prices go down to the equilibrium again.

[mustang84]

Right as election season is beginning, how quaint.

[Cory Wolfe]

Yeah... gas totally reached $4/gal... Not.

[CARBIZ]

Since there is more than one supplier, one company will say "hey i can make a lower price than that guy and get a ton more of the market" and the other guy will respond, and they will go back and forth until the prices go down to the equilibrium again.

Sorry, I don't buy that. Gas prices here (and we EXPORT to you guys!) have remained steady at $4 a gallon since February. They had dropped down to $3.50 or so, but as Yellow Dart said, we have reached at new "comfortable" plateau. The oil companies are now behaving like OPEC: a slow, steady rise that will not wreck the economy. OPEC learned from their reckless ways in the '80s. Don't kill the Golden Goose, just leave it maimed and breathing badly.

[Drew Dowdell]

This isn't OPEC. This is because there has been too much consolidation in the gasoline market. Too few companies control too few refineries.

[Sixty8panther]

I'll be happy when gas prices are $0.88 for regular and Sunoco 93 is $1.03

[CARBIZ]

This isn't OPEC. This is because there has been too much consolidation in the gasoline market. Too few companies control too few refineries.

Exactly. The shortage of 30 years ago was artifical, caused by OPEC curbing production. The shortage today is also artificial, squeezed by oil companies that, for once, are on the side of environmentalists when it comes to blocking any new refineries or expansions.

[FUTURE_OF_GM]

Since there is more than one supplier, one company will say "hey i can make a lower price than that guy and get a ton more of the market" and the other guy will respond, and they will go back and forth until the prices go down to the equilibrium again.

That would be all well and good in regular capitalism. However, now that the companies have consolidated they have formed an oligopoly and will not hesitate to CONTROL prices (Just as they have not hesitated to do so for 2 years now)

Gas is still hovering around $2.85 here in NC (Which I'm fine with) but I do remember when I was 16, In 1998, regular unleaded (87 Octane) being $0.99.

Edited July 9, 2007 by FUTURE_OF_GM

[haypops]

That would be all well and good in regular capitalism. However, now that the companies have consolidated they have formed an oligopoly and will not hesitate to CONTROL prices (Just as they have not hesitated to do so for 2 years now)

Come on now FOG if that were true the oil companies would be reporting record high profits even with the cost of regulatory requirements and uncertain times like Russia canceling their deals, etc. ... Hey wait a minute isn't that just what is happening?

Gas is still hovering around $2.85 here in NC (Which I'm fine with) but I do remember when I was 16, In 1998, regular unleaded (87 Octane) being $0.99.

When I was just a little older than that the price of gasoline dipped to $0.19. I was commuting 31 miles each way to college and it cost $2.00 to fill up.

[bowtie_dude]

Riiight. If gas prices were suppose to go DOWN, why did they jump 20 cents in Lexington today? From 2.95 to 3.15 for 87.

[NOS2006]

I'm sorry, drop? Gas around here is $3.39 for 87. Yeah.

[Drew Dowdell]

Gosh the refineries just came online give it a moment

[bowtie_dude]

Gosh the refineries just came online give it a moment

Guess they're going to squeeze as much money out of the lower capacity before they run out of excuses.

[daves87rs]

I'd be willing to bet that there will be no drop...

Why would Exxon Mobil and Wall Street be willing to give up all that profit now?

2 good reasons:

1. Fear-fear that the middle east will stop sending us oil, or charge us for oil up the a**...

Iraq, Iran, and terrorists run the prices now....

2. NYSE-Oil futures, natural gas...all that stuff is going up. I don't see investors giving up this gravy train anytime soon.

Where else is there to make money this easy? Heck, I would invest if I could afford it...

Normally when you cut production-you lose money-not make record profits....Hmmm...

Sorry boys and girls, these are the normal prices now....4 bucks is just a matter of how soon....

If there is a slight drop-it would only be a few months....

[daves87rs]

Gosh the refineries just came online give it a moment

Like Labor Day? :AH-HA_wink:

[daves87rs]

Guess they're going to squeeze as much money out of the lower capacity before they run out of excuses.

Yep.

[Intrepidation]

Don't you love how every year gas prices quickly rise but always fall much slower. Same cycle, different year, slightly more each year.

[Delta Force79]

I'm still waiting for the prices to drop....

I paid 3.25 for regular a few days ago....the same it's been for about a month. It was close to 3.40 before, so while yes the price has come down somewhat.....it's nothing to be excited about.

[Cory Wolfe]

What are you guys rambling about... Gas here is still below $3.20/gal. For premium.

[RJB]

Gas is still around $3.26 to $3.39 for unleaded here in the great economy state of Michigan.

[CARBIZ]

www.notgonnahappen.com Gas prices are holding steady at $4 an American gallon here. NO way they will drop the prices during the summer driving season. We've not budged off the $4-4.25 since January when it had dipped to about $3.75.

Thank God the Canadian $ is at .95 U.S., or we would be paying about $6 a gallon, compared to our dollar 4 years ago, since oil to the barrel is pegged in U.S. dollars.

[Sixty8panther]

I dropped $40.00 on Gulf-87 in the B-59 & got just over 13 gallons, you do the math.

[Oracle of Delphi]

$2.99 for 92 octane. God bless you WAWA!

[Satty]

$3.04/gallon for 87 octane. Anyone who thinks gas is going to fall back down to $2.50/gal or less anytime soon is delusional and probably mildly retarded. People are willing to pay and unwilling to change driving habits, there is no need, from the oil companies perspective, to lower prices.

[Intrepidation]

$3.04/gallon for 87 octane. Anyone who thinks gas is going to fall back down to $2.50/gal or less anytime soon is delusional and probably mildly retarded. People are willing to pay and unwilling to change driving habits, there is no need, from the oil companies perspective, to lower prices.

Have to partially disagree with that. It depends on where you live. Some places are close to $2.50 already. In my area it's currently $2.79 at the place I gas up from...but in Salem NH it's usually .05-.10 cheaper.

But yeah, gas won't go back down as low it did last year...like I said...same cycle every year. It goes bottoms out a little higher every year, but we think it's a bargain since gas topped out even higher.

[FAPTurbo]

Gas on this continent is incredibly cheap.

I still can't believe how easy we have it. Sure, it can be a pain for those who NEED to drive. But in my area... people don't need to do a lot of the driving that they do.

Edited July 14, 2007 by Captainbooyah

[Satty]

I was talking national average, which is about $3 right now. Went up to $3.19 overnight here.

[deftonesfan867]

$2.79 for 87 Octane is the lowest I've seen in my area and thats at the Fina pumps down my street.

[A Horse With No Name]

Honestly I think it needs to go to about $5.00 to $6.00 per gallon so we start to conserve and develop other sources of fuel.

But I am in a minority of one.

Chris