Falling gas prices: You're Welcome

[Moose]

[quote]

Originally Posted by Humongo

In general, it's because the gasoline that is at the station today was actually manufactured from oil that was purchased on the futures market at a higher price months ago. Depending on how big the original order was, it could have been over a year ago.

Not so. If you look at the OPIS (Oil Pricing Information Service) the prices for oil are about a three week span on when it is pumped out of the ground. It is that fast.

[Moose]

Here is some fun reading for gas pricing. Gasoline Price Pass-through

[Hemi57]

There is a major beat-up by the Aussie government for Oil Companies to drop prices in proportion to the barrel costs. Figures quoted are:

Barrel cost has dropped 33%
Pump cost has dropped 19%

Excuses from the local Oil Company spokeman, the barrel price is OZ is aligned to the Singapore benchmark rate, but they did drop the price immediately about 3 cent/litre.

With the new lower outlook, pity those people who panicked and bought 4 cylinder buzz boxes

[AussieHemi]

Originally Posted by Hemi57

With the new lower outlook, pity those people who panicked and bought 4 cylinder buzz boxes

hahhaha.... exactly John. My fuel bill has certainly dropped a bit since I've had my car. Here's hoping it will continue to drop.

[Spectre]

Didn't the ACCC send out letters to the oil companies demanding them to drop the petrol price by at least 10c by next week?

hehe, i pity the ones who bought hybrids instead of the 4 cylinder buzz boxes. hehehe

[Moose]

Update: Oil now trading at $50.16. Flirting with $40 a barrel prices...aint that sweet?

[Humongo]

[quote=Moose;360864]

Not so. If you look at the OPIS (Oil Pricing Information Service) the prices for oil are about a three week span on when it is pumped out of the ground. It is that fast.

This is correct, but notice how I stated, "in general". Just about any analysis prepared by the DOE is going to be the full market perspective or include extremely large distribution areas. A full on market perspective can skew the results for local markets. These typse of analysis cannot account for delivery and distribution complexities and efficiencies in local markets. In high volume areas with many distributors this lag will be much less. In low volume areas with fewer distributors and greater distances between terminal points it will be greater.