Posted on 10/17/2008 12:04:11 AM PDT by Chet 99
SINGAPORE (AP) -- Oil prices jumped above $72 a barrel Friday in Asia from a 14-month low as investors bet fears that a severe global recession will devestate crude demand may be overblown.
(Excerpt) Read more at biz.yahoo.com ...
So when crude was selling for $150 a barrel we were paying $4.00 a gallon at the pump. So why are we still paying over $3.00 a gallon when the crude price is less than half?!
Well, OPEC has called an emergency meeting for next Friday instead of after the Election as previously planned. Production will probably be cut to a level that is projected to put the price at about $80, give or take. Iran and Venezuela are the only two notable countries that need higher prices than that.
...will try to dig a link for you.
Here’s one. I’ve been expecting and watching for news of such an emergency meeting for the past few weeks.
OPEC calls emergency meeting as oil prices fall
http://www.iht.com/articles/2008/10/17/business/oil.4a.php
...and a ping to M.
Part of the increase in gas prices came from the ethanol mandate, and no matter how you jockey the numbers around, that isn't going away any sooner than the fuel taxes.
thanks iowa!
What, AP can't even afford to run spell check now? And in the lead sentence, no less.
Lots of things. As it is a fairly competitive market margins on gas are low, so overall costs determine most of the price.
Petroleum price is just part of the general cost to all producers. There are taxes charged per gallon regardless of the price. There are refining and transporation costs paid by all producers, and the costs of additives, etc. I think the base cost of all else other than petroleum is something upwards of $1.50/gal.
Because most contracts to buy oil happen on a typical month to month basis. Takes awhile for it show up at the pump prices. IF Exxon bought a tanker worth of oil at $100 a barrel and during that month the price declines to 90, the consumer most likely won’t see a reduction in price until the next purchase at the lower price, etc.....
And that too.
Taxes on a gallon of gas in CA. - 18.4 cents State Tax, 18.4 cents Federal Tax, 7.75% Sales Tax (which is levied on the product AND the State and Federal Taxes.)
So, if gas is $3.30 per gallon, which is what I paid today,
approximately .60 cents is point of sale taxes. This means the actual product price is approximately $2.70 per gallon.
A barrel of crude oil is 42 gallons, but only 19.5 of those gallons are processed into gasoline. Oil is taxed all the way through the production cycle. In other words, gasoline is still a bargain, even at $3.30 or $4.00 a gallon.
the financial markets are populated entirely by idiots.
In a way, a sucker punch for the futures increase. The US is broke and the Great Global Recession is still coming.
It’s just a matter of time before major energy exporters, especially nations dependent on exported energy for the bulk of their GNP to trigger supply fears, thus elevating prices. Russia and Iran are the most likely suspects.
Oh so the taxes were obviously different when oil was at $4.00 a gallon.
and $3.30 is still a baargain... even though raw materials cost is down by over 50%....
I’m going to be sick...
Milk costs the same per gallon without all the taxes being added to it and nobody is complaining about that.
Oil is expensive to produce, in part because the Government makes it that way. Don't blame the Oil Producers for the price, they work with an 9% Profit Margin. Microsoft has a 33% Profit Margin, so shouldn’t their software cost a third of its current price?
That is my point. I like cheap prices just as much as the next guy, but who is causing the price to be so high? Government is the answer.
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