Why Are Gasoline & Home Heating Fuels So Expensive?

Sorry Devil. You'll have to decide about paranoid but you are wrong. Gas and heating fuel have dropped because of the price of crude oil on the world market has plummeted. If you think the US can control that then maybe you are paranoid. Prices spiked which triggered less usage. Decreased demand caused prices to start to fall. Changes in the rules for commodity traders also contributed. There isn't some vast storage of gas and heating oil in the world. The products are pumped, refined, shipped and used. If there is a hiccup in the stream, such as a big drop in demand, it's like the line of traffic that has to suddenly stop. It snakes back through the line. This may be over simplified but the bottom line is, the republicans cannot control the economy or world oil prices. If they could, they would have caused tham to fall long before this. McCain has taken a huge hit on the economy.

coalkirk wrote:Sorry Devil. You'll have to decide about paranoid but you are wrong. Gas and heating fuel have dropped because of the price of crude oil on the world market has plummeted

I see that Terry but you & I both know that the oil companies control the refining of crude into gasoline & that, whatever the fairy tale is going to be this year, there will be a steep price increase in gasoline prices in the U.S. starting right after the election.....Wanna bet some coal on it?

OK Dick, you're on. Define right after the election. Prices will eventually go up as they always flucuate. I'll wager my prize lump of Superior stove coal that's sittng on the shelf over my desk. (See John, you arn't the only one who decorates with coal). What are you betting?

coalkirk wrote:OK Dick, you're on. Define right after the election. Prices will eventually go up as they always flucuate. I'll wager my prize lump of Superior stove coal that's sittng on the shelf over my desk. (See John, you arn't the only one who decorates with coal). What are you betting?

I'll say that gasoline prices will start to rise again by mid to late November & will continue to rise until we are at or above the $4.00 per gallon mark again, probably as early as X-mass but certainly by mid January.

As far as what I'm betting....I don't have a huge "Family Heirloom" like the lump of coal you have but I can offer you a nice 40 lb polyethylene bag of Blaschak nut coal?

Dick, by your reasoning then the Financial Crash came at just the right time to drive a stake thru McCains campaign....who, by way of your conspiracy would the have the Democrats in leadership of the Banking Industry throwing our counrty into a tailspin just to win this election. Lemme guess, the Democrats would never be so nefarious, only Rebuplicans would hurt citizens right? Don't bother, I already know.

Ed.A wrote:Lemme guess, the Democrats would never be so nefarious, only Rebuplicans would hurt citizens right? Don't bother, I already know.

I insist on answering Ed! .......Let me think minute....OK..I've thought...The answer is YES!

(they actually enjoy it Ed)

I really hope that was with tongue firmly in cheek.

Ed.A wrote:I really hope that was with tongue firmly in cheek.

As we used to say in 4th grade: 'That's for me to know & you to find out!"

Devil505 wrote: I see that Terry but you & I both know that the oil companies control the refining of crude into gasoline & that, whatever the fairy tale is going to be this year, there will be a steep price increase in gasoline prices in the U.S. starting right after the election.....Wanna bet some coal on it?

The world economy is in the tank. Copper has tanked. Silver went from $20 to less than $10. Gold went from $1000+ to the seven hundered's, Scrap steel went from the $.22 per pound to something like a nickel. I owned a "Natural Resources" fund that went from $48 to $19 a share in about 2 months. I could go on. The Republicans did and want all that too?? That's just plain silly.

In sight of all these forum brothers (& sister), I bet you one ton of coal that gas will not be $4 a gallon by Christmas, even in Taxachusetts.. You've told us this over and over, put your money where your mouth is. A 40# bag does not show commensurate confidence for all the Republican conspiracy blathering crap we have to put up with from you. Put up or shut up as they say. Are we on? :box: :box:

What I believe is that the old rules of supply & demand don't apply when oil company czars (with a wink & nod from an administration with "one of the boys" at the top) have every reason to believe that their illegal conspiring to fix pricing will go unpunished (worse uninvestigated) by a Justice Dept run by & totaly politicized by the White House.
We all know what happens to US Attys who go after the wrong targets....don't we?

Oil is traded on the futures market, so if XYZ heating oil company is looking to buy 200,000 barrels for a December delivery, they go to the market and buy a 200 contracts at the current market price or place a limited bid at a price they are willing to pay. If oil drops, their contract may be fulfilled, if the price does not drop, they don't get a contract and instead have to buy at market price if they want to stay in business. Lots of times smaller companies buy from a larger supplier who takes the risk on the futures market and the smaller company is pretty much subject to whatever the larger supplier charges. In a crisis, like a hurricane that hits the Gulf, company owned gas stations like Herb's Gas Stations Inc. (non producers) may be making a bundle because they purchased at a lower price, or they may later be losing their arse if they bought a later contract at an inflated cost but have to meet current retail market prices. It is all pretty complicated because you also have midlevel traders and speculators buyers going short, long, as well as buying puts & calls, which also have an impact on the long term price of oil, but that is more or less how it works. It is a blast to trade futures, but it will raise your blood pressure in a heart beat, especially if you do it on pure speculation. I traded commodities on my own many years ago and did pretty well until I got a major hammering on sugar. After that I had to stop because I have employees that I have to pay and taking a large hammering on commodities is not the same as losing the cash you have in stocks. The potential loss is much greater than the amount of money you have in the actual market. Scariest words I have ever heard are "margin call"!!

So, supply and demand does come into play but at the local level market correction seldom reflects the actual price of oil today.

Here is a pretty good site describing how the futures market works and what part all the parties play in the futures market. At first you may think speculators are bad for the market, but they actually have an integral role in regulating prices as well. Take a look, it is quite interesting.

http://tfc-charts.w2d.com/tafm/

coalmeister wrote:You've told us this over and over, put your money where your mouth is. A 40# bag does not show commensurate confidence for all the Republican conspiracy blathering crap we have to put up with from you. Put up or shut up as they say. Are we on? :box: :box:

I already accepted your bet (can't find which thread it was on) but I said "around" $4.00 per gallon by X-mass & that I couldn't live with myself if I took 1 ton of coal from you in mid-winter!
Lets keep the bet to a "friendly" bag of coal.

My obvious point is that as soon as the election is over on Tuesday, we all know that those 'Legitimate Market Forces" will cause gasoline prices to start their inexorable climb back up the ladder.

(PS...If you need fuel assistance that badly this winter, I understand former Massachusetts Congressman Joe kennedy offers a free service to those in need!....I think the tel # is 1-800-CALL JOE )

Edit: I'll make sure to re-open this thread X-mass week & we can check gas prices then.

Devil: It all depends on what equities are doing. If the economy is perceived to be slowing down then oil will continue to sell off or flatten out. If equities rise oil will rise. I think we will continue a short term rally and then get another dip. Credit card deliquencies will be the next big problem. Wait and see. My crystal ball doesn't lie.

coalmeister wrote:You've told us this over and over, put your money where your mouth is. A 40# bag does not show commensurate confidence for all the Republican conspiracy blathering crap we have to put up with from you. Put up or shut up as they say.

If you are bothered so much by my "Republican conspiracy blathering crap", perhaps you are not emotionally suited to take part in these off topic discussions & would be better off sticking with coal related subjects.(you know....Something you actually know something about)

(I don't remember it being a forum requirement to venture in here, can you point that requirement out to me?)

traderfjp wrote:Devil: It all depends on what equities are doing. If the economy is perceived to be slowing down that oil will continue to sell off or flatten out. If equities rise oil will rise. I think we will continue a short term rally and then get another dip. Credit card deliquencies will be the next big problem. Wait and see. My crystal ball doesn't lie.

So we are all agreed then I take it.....As long as crude oil & the stock markets remain low, there is no legitimate reason for gasoline prices to start to rise again right after the election.....Right?
(I'm betting they do! )
Can't wait to hear the oil company stories...attempting to explain the unexplainable! (they are always so creative!)

Edit:

BTW..if you'll look back over this entire thread, you'll see that I predicted this incredible/precipitous drop in gasoline prices (ust b4 the election).......a full year ago!! ...Do I attribute that to having a "Crystal Ball?"...."Clairvoyance" .........No....I attribute that prediction to having a lifetime of understanding & predicting the criminal mind, & make no mistake......Price Fixing & Restraint of Trade are federal crimes...Felonies in fact!

all it takes is for one refinery to *censored* the bed...