Bob

I'm starting to hate you all.

paranoidandroid

The feeling's mutual. It's still 3.31 here though.

Sheepdip

$3.20 today at the local but got some on Saturday for $3.15

paranoidandroid

Bugger off.

frrussre

Paid, $3.61 for 87, Davie, Ft Lauderdale. Odd, yesterday in Sunny Isles (Miami), still saw Touristy gas station $3.99 for 87.

Reg. Frank R.

Egg and Cress

Let's face it - oil barrel cost has nothing to do with on-the-street price - they charge what the traffic will bear. The fuel lords all stick together in any given area, so there's really no true competition.

Brit3964

Correct. So much for the idea of free market competition lowering the cost Filled up at Sams yesterday for $3.21. I hope Ft Lauderdale gets cheaper. I'll be down there from next week.

Egg and Cress

Unfortunately, it probably won't be - this is the tourist season for FL so, again, the cost will be just at what travelers will tolerate. Are there Sam's Clubs in FL? Have a good trip anyway.

frrussre

Yes to Sams, Costco & BJ's in South Florida. Not all have Gas stations. My local Costco, pretty much the only one I use, does not have Gasoline.

Reg. Frank R.

paranoidandroid

3.33 here this morning, slightly up from the weekend. I suppose it's because school will be finished for the summer this week.

Michael

Prior to this year it was pretty easy to determine the price of gas at the pump by checking the price of NYMEX crude oil (West Texas Intermediate or Texas Sweet Crude) or BRENT since the price of NYMEX and BRENT crude were typically within $3 per barrel of each other and oil suplied from around the world had similar prices.

However since the beginning of this year, BRENT crude prices have typically been about $15-$17 per barrel more than NYMEX crude oil and world prices tend to track BRENT crude prices more than NYMEX prices. Currently BRENT crude prices are about $113 per barrel and NYMEX crude is about $96 per barrel.

Governments around the world were were very concerned about the spread of crude prices so a couple of weeks ago started the release of 60 million barrels (2 million barrels a day for 30 days) from their strategic petroleum reserves to try force the price of BRENT crude downward.

Usually the price of the different crudes are dependent on the API gravity of the different oils since a lower API gravity doesn't produce as many gallons from a barrel of crude, is more expensive to refine, and usually causes more pollution (higher sulfer content) than oil with a higher API gravity so therefore would be cheaper.

However NYMEX crude has an API gravity of 39.6º and traded at $91.16 per barrel on June 24th but from the following chart, you can see that crude with much lower API gravity such as Saudi Arabian Heavy 27º traded at $101.91, Mexico Maya 22º at $98.26, and Venezuela Tia Juana Light 31º at $104.70. All of the above countries are major suppliers of crude of to the US. Only Canada which is the largest supplier of crude to the US has it's prices more closely aligned with NYMEX crude with Canadian Par 40º at $98.84 and Canadian Heavy Hardisty 22º at $86.10.

http://www.eia.gov/dnav/pet/pet_pri_wco_k_w.htm

You can also see from the chart that the US was paying an average price of $101.42 and the world $107.87 per barrel on June 24th which is well above the NYMEX price of $91.16.

It is very difficult to determine who is manipulating the prices since the pricing structure of crude no longer makes any sense.

frrussre

"It is very difficult to determine who is manipulating the prices since the pricing structure of crude no longer makes any sense."

Simple, lets line them all up against a wall. One or more of them, must be guilty, if it just plain old greed, then they are all. guilty.

Reg. Frank R.

Ps. Well researched.

Egg and Cress

I'n't that kinda what I said? You took the scenic route - I just cut to the chase.

Michael

I was just pointing out that the price at the pumps do have a bearing on what the refiner pays for a barrel of crude oil. In a normal supply/demand model, crude oil such as Saudi Arabian Heavy 27º, Mexico Maya 22º, and Venezuela Tia Juana Light 31º should be selling at a discount to NYMEX. The question is who is artificially driving the price up and how is the price of inferior products being driven above the that of superior products? Is it the governments, oil companies, or the speculators?

In a free market system, the price of NYMEX crude oil should rise above the inferior products if there is an oil shortage or the inferior product prices should fall below the NYMEX price if there is plenty of oil on the market and NYMEX and BRENT crude should equalize in price since they have similar characteristics. Since none of that is occurring, there must be some manipulation going on.

If that was going on in any other market, governments would start to suspect that price fixing or manipulation was occurring.

Egg and Cress

Thanks! You told me a lot I didn't know, but being somewhat of a conspiracy theorist, I firmly believe the manipulation is by all of the above - governments, oil companies and the speculators. In other words, they have us by the short ones, to be crude (no pun intended) about it.