I do like that idea. Some of it is unnecessary (like when my son forgot a part of his XBox 360 and asked me to bring it to him) but some of it is more necessary (band practice). The Detroit area simply doesn't have mass transportation. It makes sense, since the auto industry dominates, but it's sure a pain in the neck! Our school district area is quite large (compared to where I grew up) so the kids' school is 5 miles from my house. Of course, I live less than a mile from the next district's high school, but that does me no good! They both managed to make a lot of new friends in middle and high school who all live on the opposite side of the high school. If I'd known, I'd have moved over that way instead of buying this house! If I could sell my house for a decent price, I'd move over there!

There has been a huge bicycle increase on campus, the racks are full A LOT which is good. I did buy the most expensive permit with the best priviliges, but I figure that the extra money spent up front will pay for itself since I have an off campus lab and an internship off campus next spring. A group of people in my lab also have the same class after lab, so we ride together since I have a better permit and they don't drive. I usually walk or ride my bike to my AM classes, go home for lunch, then pick up my car for my afternoon classes (off campus) and drive to lab, then campus. I also have lots of random class meetings and stuff going on, so last Friday I rode my bike to the end of campus near my house for my meeting, rode home, and then picked up my car to run errands that were impractical on a bike (returning glassware to WalMart, buying groceries, etc.)

I really wanted to get a Vespa or something similar, but I had other things to buy like furniture and everything else VandalShyster took when he moved out. Something told me I needed a couch, microwave, and vacuum more than I needed a pink Vespa. They also fall under motorcycles in Idaho, so I'd have to get a special endorsement. Oh and there aren't helmet laws here, talk about Darwin Awards aplenty.

Thanks for not sniffing your own farts :)

Gas Prices
 

Anyone out there:

In your opinion, are the oil companies gauging the consumer by thickening margin or are they hedging on the decline of supply in the market? When oil was at its highs at $147 a barrel, gas was about $4.00 a gallon. Based on the conversions you can assume that gas should be about $2.61 (today's quote is about $96.00 a barrel of crude) a gallon. Do you think that spreads are wacked?


Here’s how I figured the number

X * CURRENT_BARREL_PRICE = CURRENT_GAS_PRICE

Where X = HIGH_GAS_PRICE / HIGH_BARREL_PRICE

My dad was saying the same thing the other day. He doesn't understand why gas prices aren't going down when the prices of a barrel of crude oil has gone down a good deal.

All I can figure is that maybe they are trying to keep gas prices stable (instead of lowering & raising based on the price of crude oil) until they can get a stable price for a barrel of crude oil.

Oil/Gas Price Skew
 

There’s typically a two to three week lag between the oil refinery’s price to the fuel company. The fuel company buys the barrel at market price from the refinery and sets their spreads accordingly. In other words, what you are paying for at the gas station today reflects the price of crude oil from about 2-3 weeks ago (purchased oil at market price). It generally takes 2-3 weeks for a gas station to empty their deposits and order more fuel. The new fuel shipment will reflect the new buy price at whatever the market price was when the respective barrel was purchased. However, based on that logic, if we look at today’s quote at appx. $96.00 a barrel it would mean that gas should be below $3.00 around the end of the month into the beginning of October. Specifically, about $2.648 using the spreads during the all time high. In my opinion, the consumer is getting gouged.

Thanks for your Reply Epchick!


[QUOTE=epchick;1718074]My dad was saying the same thing the other day. He doesn't understand why gas prices aren't going down when the prices of a barrel of crude oil has gone down a good deal.

QUOTE]

While this seems like it would make sense, it's not what appears to happen in reality because if a gas station was only changing it's prices when they ordered new fuel and they only did that every 2-3 weeks, then gas prices would be stagnant during those 2-3 weeks. However, gas prices change day to day (on Friday, it was hour to hour), so that's not really what they're doing.

That might be true where you live, but it isn't necessarily true here. Lately, gas prices have been pretty stable (around $3.52), although you do find different prices in different gas stations.

^^^ Same here. I paid as low as $3.47 in the Atlanta area. The price of a gallon of gas was dropping almost daily. However, I'm confident in saying that the price that we pay at the pump was dropping at a slower rate than the price of a barrel of crude oil.

I call price gouging because gas stations are making up for lost profits inside their stores. People starting using their money for gas only and would not go inside to buy overpriced candy, 20 ounce sodas, or sandwiches. I believe the stations are making small profits off the gasoline to make up for the drop in retail sales in the stores over the past several months.

they are all high.

While our prices are considered high compared to the rest of the country, they're continuing to drop here. I haven't seen prices skyrocket like some of you have.

Price Skew
 

Excellent Point AGDee! In my opinion, and it sounds like you agree; I think that there are several layers involved in that net price that we are paying at the gas pump. Weather is good one. If the supply of oil will decrease, it will lead to a decrease in quantity demanded. Could another one be that it's an "Opportune time to make a little more money"?

The other layers of profit margin that are being baked into the net gas price, in other words, what my friends in GC and I are paying is what I'm really curious about. One might argue that an increase to the base price is being used to research new efficiencies, new deposits, etc in the business.

OK. That'll make me minimize my complaining for a short while. :(

Original Question
 

Good point Jojapeach!

There is certainly going to be a price disparity depending on region specfic supply/demand. For example, the Dallas-Ft. Worth MSA (Metropolitan Statistical Area) may have been at $4.00 (rounded appx. price) a gallon during record highs. However, a town in a different state may have only been $3.00 a gallon during record highs. We can assume that the gas companies were making profits during record highs. We can also research online and determine that companies like Exxon-Mobil made record earnings during the 1/4 end financials at the time that oil was at it's record highs. So the question is what is different between the time that the barrel to gallon ratio was at it's peak vs. now? Let's go back to the original equation. Take whatever your gas price high was and divide that number by 145. Whatever number you get take that and multiply by 96. This is where your gas price should be assuming that the gas station hasn't changed anything on how they are making money (i.e. overheard, charge of food items, beer, etc).

AGDEE points out, we know that the role of weather and it's impact to the source is determinant in figuring volatility. But even when that's factored in we still quite a spread.

This is good stuff. Thanks everyone.

Well, and people just don't understand how it all works sometimes. As they were saying today that the barrel of oil went down to $94 today, people were questioning why gas prices are rising. Well folks, did you hear about that hurricane? The one that shut down the refineries that provide 25% of our fuel? Demand is definitely going to exceed supply in that situation.

OMG. Thanks for the equation that I was trying to figure out today. I must be gradually losing my mathematical skills while I embrace my writing skills. *sigh*

So, now I'm sad that my alleged gas price should be $2.74 according to that nifty formula. I paid $3.79 on Friday. :mad: