Oil prices down.Y is a quart so high?

dapperdan wrote:

westend wrote:

jolooote wrote:
Hi all. Going to change the oil in my Class'A'. Went to the auto parts store to get the oil. Conventional. A Barrel (55 Gallons)sells for about $32 on the world market. WHY does it STILL cost about $5.00 a QUART???:M

Because it's not the same product, for one. If cotton prices go down do you think a shirt is going to be less?

We are lucky to see gasoline and other fuel prices falling. It is about inventory being held, there is just so much tank space.

I get what you're saying westend but what I don't get is here in the Milwaukee area as soon as the raw material (crude) creeps up we see an immediate increase, when the raw material (crude) goes down like it has been the prices aren't keeping in pace with the slide.

It just seems to go UP faster than it goes DOWN

But ya know what? Aint nothin we're gonna do about it but take it.

Dan

You noticed that too? :B
There is little impetus for a fuel seller to decrease prices. He has paid for his tank inventory at a certain price and the only reason to lower it is to keep up with the competition. On the other side, if he believes his wholesale price is going to rise, as does his competition, you're darn right the pump price will be going up.

FWIW, in 1990-91 I delivered a lot of diesel fuel, about 4 million gallons. Our company had an analyst service that monitored NYMEX pricing because pennies meant something. On the day that the US entered into the Gulf War between Kuwait and Iraq, our analyst initially forecast a $.05 increase in the wholesale price because of the Majors' mutual price adjustment. By Noon, the refinery gates were locked (no deliveries) and the next day fuel was $.30 higher/gal. Anyone that thinks oil and fuel is sold as to it's value is not understanding the nature of the beast.