Something to think about! Gas Prices.

[EE-BO]

Just to clear this up- I think some of you might be talking about gross margin (gross profit) and some of you are thinking about net profit.

Keep in mind too that as the energy markets continue to deregulate, you will see more anticipation built into current pricing. As we have seen at certain points recently, prices for future delivery are more of a driver of current prices than actual supply and demand.

This passes down to the retail gas station owners who are charging you for gas based on the cost of supply they are securing now- not what they already have in the tanks or on the way. It is the only way they can avoid cash flow difficulties in a market with rising prices.

Much of the extra profit that is perceived today goes to the traders (and many of the majors do have energy trading divisions) and not necessarily to those responsible for the actual process of getting the stuff out of the ground and into your car.

Ironically, however, that actually creates a certain long term stability that would not exist if everything traded purely on the supply and demand at a given moment- but it comes at a price.

Yet there is some variability in the marketplace and I think consumers forget all too soon that energy companies frequently go through long periods of huge financial losses and layoffs. It is unrealistic to complain about their profit margins in a specific period of time- especially when there have been a lot of very unusual events affecting supply and at a time when the fundamental nature of the energy markets is changing courtesy of deregulation.