Crude below $67....gasoline prices are not falling very much around here. Something is very wrong in our Capitalist paradise.
Today's close: 67.30
9/07/2006
Subscribe to:
Post Comments (Atom)
Proud to be Designated a Right Wing Extremist by our Democratic Administration NOTE: COMMENTS OFF DUE TO EXCESSIVE SPAM
Crude below $67....gasoline prices are not falling very much around here. Something is very wrong in our Capitalist paradise.
Today's close: 67.30
Posted by
Howard
at
9/07/2006 10:24:00 AM
2 comments:
crude prices are based on futures and spot markets. Gas prices are based on the price of the barrels in inventory that are refined. There's going to be a lag. And of course any oil company will hedge these obvious swings.
And in the other direction? Price of oil going up with lots of cheap oil in inventory? You need to be able to pay for that future oil. And you get to take advantage of an increased margin for a short time.
Not true. There are roughly 67 grades of crude oil and the prices on futures markets are only for two (North Sea Brent and West Texas Intermediate). Deals "off the books" are made all the time for prices other than futures prices, sometimes for prices much lower than futures. The price of gasoline is determined by the amount of crude that can be converted to gasoline based on whatever the crack spread is at the time. In both products the amount supposedly in storage as determined by the DOE guides prices.
Post a Comment