I hope you outsourced your widgets to China.
Posted on 04/13/2005 8:28:54 AM PDT by conservativeinferno
Oil Prices Drop More Than $1 a Barrel
SINGAPORE (AP) - Oil prices dropped more than $1 a barrel Wednesday morning after U.S. government data showed that supplies of crude oil and gasoline grew last week.
On Tuesday, oil prices fell by nearly $2 a barrel after the International Energy Agency forecast slower demand growth this year.
Light, sweet crude for May delivery fell $1.36 to $50.50 a barrel in morning trade on the New York Mercantile Exchange. On the International Petroleum Exchange in London, Brent crude fell 70 cents to $51.28 a barrel.
The U.S. Department of Energy said that the nation's supply of crude oil grew last week by 3.6 million barrels to 320.7 million barrels. It was the ninth straight week in which U.S. oil inventories increased.
Gasoline inventories increased by 800,000 barrels to 213.1 million barrels, the agency said, while the supply of distillate fuel, which includes heating oil and diesel, slipped by 100,000 barrels to 104.0 million barrels.
Heating oil prices fell more than a cent to $1.4535 a gallon, while unleaded gasoline futures fell more than a cent to $1.5190 a gallon.
Also weighing on the market was Tuesday's report by the International Energy Agency.
``The IEA report raised doubts about demand expectations. The market was ready to bounce back up and the bulls were confident that demand would be strong,'' said analyst Phil Flynn at Chicago-based Alaron Trading Corp. on its Web site. ``Now they are losing that confidence. The bulls are jumping ship.''
In its report, the Paris-based IEA suggested that rising U.S. interest rates and energy costs would reduce global demand growth for oil this year by 50,000 barrels a day to 1.77 million barrels a day. The global energy watchdog also said slowing Chinese oil demand growth might...(cont.)
(Excerpt) Read more at cnn.netscape.cnn.com ...
Still 2.20 in Akron, OH.
well, I have to pay for illegals everytime I fill up I guess!
Forgive me but it appears that the reverse is also true when prices are going up. It all boils down to this, basically your industry has no competition for alternative energy sources. So we are all at the mercy of the oil companies.
I think Oil will settle around 40-45/bbl. As far as seeing this reflected at the pump.......probably after the summer demand subsides. No sense lowering prices while windfalls can be had.
hmmmmm
About 10 years or so ;-)
They made their money last week.
Buy in, sell after the run up, then short the market and ride it down.
The government gets a bigger cut out of the price of gas than anyone else in the chain.
Here is what one of my invoices looks like:
Uleaded Gasoline 10,000 gal. $3,840.00 Tax
$21,090.00 Total
Diesel 15,000 gal $6,660.00 Tax
$32,585.00 Total
Federal Gas Tax .184 per gallon
Federal Diesel Tax .244 per gallon
State Gas Tax .200 per gallon
State Diesel Tax .200 per gallon
This load cost me $54,075.00 and I will make a profit of about $2500 on it. The Feds get $5500 and the state will get $5000. $10,500 in taxes so I can make $2500.
Cheapest I've found in Seattle is $2.41. And that is this morning. Yesterday those same two stations were at $2.39.
"Course, I'm bicycle commuting so minimally impacted - for now. When the follow up inflation hits, I'll be cryin' with everybody else.
You've nailed how I heard it works. BTW, I am one of those "jerks" that hasn't bought anything but gas at a gas station for at least seven years. And I buy almost all my gas at Arco and use cash to save the $.35 fee.
Actually, come to think of it, on a couple of road trips from Seattle to Fargo and back we bought a one liter bottle of diet Dr. Pepper...
I think people are driving less, and there are more stockpiles in the US....
When will the Strategic Reserve be full?
I own a hardware store and actually sell widgets. I usualy purchase new widgets before I run out of them. When the new widgets come in at a higher price, I have to mark up the old widgets as well, or someone will buy a bunch of them and demand the lower price for all of them.
I hope you outsourced your widgets to China.
You say "when the new widgets come in".... do the widgets get marked up when the new ones come in or simply when the wholesaler announces a price increase but you haven't yet bought any at the new price?
I am talking about when I put them on the shelf. I can't have widgets marked at two different prices, people will want them all for the lower price.
What you say makes sense. But you clearly have a different pricing behavior than the gas stations.
If I'm understanding you correctly, you don't bump up your retail price in response to a wholesale price increase that you haven't yet paid. Your retail prices reflect the price that you actually paid for the items with the undertanding as you've mentioned that you can't have the same product selling for two different prices.
So if I've got this correct (and correct me if I'm wrong) what is it that allows you to price widgets one way and the gas stations find it necessary to price gas another way?
Also heating oil (untaxed diesel) demand was high due to cold temps on the east coast.
I guess this is one thing they won't say is all Bush's fault.
Around July/August
I think I see what is going on ....Freeper sharkhawk explains this concisely here
http://www.freerepublic.com/focus/f-news/1383622/posts#21
Prices go up faster than they go down because each owner is pricing his product to both maximize his profit and just be a little lower than his competitors. Given these two principles, the behavior makes perfect sense.
I think the explanation that has to do with replacing existing inventory is not one that works real well for me (and maybe that's just me, again).
I think sharkhawk's explanations are ones that I can understand and accept.
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