Riddle me this.....

[Wes]

The price of oil just closed below $35 today. Why is the price of gas going up?

Please do not turn this into any kind of political discussion. I'm genuinely curious. I was always under the impression that the price of gas was tied to the price of oil. As far as I know, there are no refinery shutdowns or anything, so therefore.... I'm perplexed.

[bondarnes]

The price quoted for oil is the spot market price for oil to be delivered in March. Most major oil companies don't buy much oil on the spot market. Look at the wholesale price of gasoline for a better comparison.

[nastytrucker]

I think the current excuse is the instability in Russia and Ukraine with Natural Gas. I know if someone farts next to a pipeline in Saudi Arabia they will raise the price of oil.

[Jeff_Green]

I would agree with the great and wise Don Barnes. If you buy a radio to sell in a store for $15 and tomorrow you can buy that same radio for $8, you aren't going to sell the radio you bought for $15 for $10 and take a $5 loss.

[Howard Barlow]

You bought an oil fired radio?

[Gabby498]

Am I wrong? You buy a radio for $15 and rather than sell it for $10 and take a $5 loss after the price goes down to $8, you refuse to sell the radio at all and take a $15 loss. Right? So, that's why I failed Business 101. Sorry, Jeff, couldn't resist.

[kenw]

no, it's like my wife said:

"It was on sale for 50% off, so I used the other 50% to buy it so it cost you nothing..."

[Wes]

Ah, but you do not buy the radio at the same price in which you want to sell it. You buy it for $15 with the idea that you're going to sell it for $50. You wind up selling it for $20 and you've still made money.

[toverman]

I had also heard that the powers that be (OPEC) is cutting supply to jack up the price. Some of the countries over there rely almost exclusively on oil to float their economies, so they're in worse of a slump than we are right about now.

[David_3]

It all has to do with the "crack spread".

Seriously.

[Gambit]

There's also the fact that gasoline is a derivative of crude, as is heating oil. So, are the refineries busy with heating oil right now instead of, er, pumping out the gas? (Yes, I know you can't use the parts that make gas to make heating oil and vice versa.)

[bondarnes]

Originally Posted by toverman

I had also heard that the powers that be (OPEC) is cutting supply to jack up the price. Some of the countries over there rely almost exclusively on oil to float their economies, so they're in worse of a slump than we are right about now.

Not to worry. I read a report that said there are eight super tankers cruising around storing oil because there is more supply than demand.

[kenw]

Originally Posted by bondarnes

Not to worry. I read a report that said there are eight super tankers cruising around storing oil because there is more supply than demand.

yes, and more are being sought. There are plenty available.

[JPalmer]

Speculators.

Alex Mills, president of the Texas Alliance of Energy Producers, said to the Times Record News (Wichita Falls) that "“It is the speculators on the futures market that are causing the prices at the pump to go up. They are gambling that the prices of crude will increase, and gasoline, too. The speculators in the commodity markets are speculating they will rise in the future. They are buying the contracts at higher prices than what the industry indicators are showing. They are bidding up the price.”

Now... does that mean that oil co. insiders aren't pushing the speculators to put higher and higher bids SO THAT the price of crude/gas/heating oil will rise?

Like my magic 8 ball would say... Prospect Good

[photonewb]

what's worse is that law makers want to add more taxes to your gas. This was on the local news a couple of weeks ago that apparently they're trying to work in a new 10 cent federal tax, and a 7 cent state tax. This is PER gallon mind you. The excuse is that they don't have the money to perform maintenance etc...but my question is what about the taxes that have been sitting on this gas that aren't needed anymore because the reason they were added has long since been paid off!