Will someone explain this aspect of gas prices to me?

#1
thunder5

thunder5

Cause I like to party
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#1
What I'm about to ask doesn't include recent spikes in gas prices...I understand that(at least on the surface) those prices were do too suppliers holding on to their supply in fear of the recent hurricane...

Here's my question...if the price of a barrel of oil is dropping so much and the price of a barrel of oil was cited as the main reason gas prices went over $4 earlier in the summer then why doesn't said drop in the price of a barrel of oil constitute a similar drop in the price of a gallon of gas?

Now I understand their isn't a linear relationship between the price of a barrel of oil and the price of a gallon of gas....so the 40% drop in the price of a barrel of oil ($149 a barrel to $92 a barrel) wouldn't mean a $4 gallon of gas would go to $2.40 a gallon(40% decrease)....but shouldn't a 40% drop in the price of a barrel of oil result in more than 10% drop for a gallon of gas($4 to roughly $3.60 a gallon..before the recent spike)?

Someone please explain to me why a huge drop in the price of a barrel of oil has resulted in a relatively small decrease in the price of a gallon of gas...especially when said price was cited as the reason the price was so high in the first place
 
#6
#6
volinbham said:
Look for close to $3 gallon soon if oil doesn't spike again.
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The funny thing about that is this time a year ago I was bitching about $2.60 a gallon(give or take) here in Knoxville....now I would absolutely love to see $3
 
#7
#7
when the oil price went from $100 to $140 the gas price didn't rise by 40%. That is why it hasn't dropped by 40%.
 
#8
#8
The price of oil INDIRECTLY affects the price of fuel. The reason that fuel has gone up a little and oil has been dropping like a rock is the major shutdown or slowdown of refineries in Texas due to Ike.

When refineries slow production or shutdown completely, they drop the demand for crude oil. By the same token they drop the SUPPLY of gasoline. With that break in the chain the consequences are as you see... lower oil prices, but higher gasoline prices.

I expected refineries to be back to normal very quickly, as the storm didn't have very high winds. Unfortunately, I was wrong because of the sheer size of the storm it dropped a large volume of water on Houston/Beaumont/Galveston causing major flooding, and problems just as bad as if the storm had higher winds, and extended hardships for people in the area.
 
#9
#9
I believe oil is now about where it was a year ago - I would expect to see gas return to about a year ago levels if that's the case.
 
#11
#11
let's put the blame where it belongs. Bush is in bed with big oil and Halliburton is plain stealing from us.
Posted via VolNation Mobile
 
#12
#12
I think you also have to look at the state level for some of the problem. In Tn, we're paying close to .30/gallon in gas tax, right? That seems to be a lot.
 
#14
#14
Etownvol said:
I think you also have to look at the state level for some of the problem. In Tn, we're paying close to .30/gallon in gas tax, right? That seems to be a lot.
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We were paying that much tax on it a year ago and it was still $2.60 a gallon...

I think its obvious price gouging...

If the price of a barrel of oil is given as the reason gas prices go up (again....I am NOT talking about recently because I know the recent spike was because of the hurricsane) then it stands to reason that such a significant drop in the price of a barrel of oil would result in a significant drop in the price of gas...

Here's how I see it right now:

Me: "Hey person/entity in charge of gas prices...why have gasoline prices gone up so much?

Person/entity in charge of gas prices: "Oh that's easy...because the price of a barrel of oil has gone up"

Fast forward a few months:

Me: "Hey person/entity in charge of gas prices...why aren't gasoline prices dropping since the price of a barrel of oil has dropped substantially?

Person/entity in charge of gas prices: "Uh......"
 
#16
#16
BigPapaVol said:
let's put the blame where it belongs. Bush is in bed with big oil and Halliburton is plain stealing from us.
Posted via VolNation Mobile
Click to expand...

And he used his secret weather machine - the same one he used to try to do some ethnic cleansing in New Orleans - to cripple refinery output.

What's worse is he didn't do it for money - he did it to make people suffer....muahhaahahhahahaha
 
#17
#17
volinbham said:
And he used his secret weather machine - the same one he used to try to do some ethnic cleansing in New Orleans - to cripple refinery output.

What's worse is he didn't do it for money - he did it to make people suffer....muahhaahahhahahaha
Click to expand...

:lolabove:
 
#18
#18
I thought the radiation from the bombs in Iraq were causing all the hurricanes....dang.

No joke, I heard that when Katrina hit from some idiot.
 
#19
#19
blamie said:
I think its obvious price gouging...
Click to expand...

I guarantee you were gouged worse by the makers of the parts in your computer than you ever could be at the pump. However no one ever wants Congress to investigate Intel on price gouging
 
#20
#20
I think it is interesting that people want the government to investigate price gouging, when if they DO find price gouging, all they do is fine the gouger. Thus, ultimately it is the government who profits from price gouging, and the gougee still doesn't see a dime.

Of course, the government IS the ultimate price gouger, considering they recieve tax on goods and services they did nothing to produce.
 
#22
#22
Could it be possible that it is due to the fact that 49 platforms were destoyed by IKE, and most of the other platforms are still shut down for repairs??????:confused:
 
#24
#24
With the global economy growing at such a rapid race, we will probably stay above 3.00 forever now. There will always be an excuse to raise the price.
 
#25
#25
overseasorange2 said:
Could it be possible that it is due to the fact that 49 platforms were destoyed by IKE, and most of the other platforms are still shut down for repairs??????:confused:
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Hey...jackass....I've said in every post I've made in this thread that I'm not talking about recent spikes and that I understand the recent surge was due to Ike...

I'm talking about the trend over the past year where increases in the price of a barrel of oil were given as the reason for the increase in the price of gas...yet...now that said barrel of oil price has dropped substantially we aren't seeing such a substantial drop in the price of gas

For the record.....I KNOW RECENT SPIKES WERE DUE TO HURRICANE IKE...I'M NOT TALKING ABOUT SAID SPIKES I'M TALKING ABOUT GAS PRICING TRENDS BEFORE AND AFTER THE HURRICANE
 
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