Cheapest Gas

I once watched T.Boone Pickens (BP Capital) Give a speech on what would happen if you took 5% out of the crude supply suddenly and what it would do to retail prices.He was spot on with this . The only way gas prices will come down is if we stop buying it. Sales have been slowing and prices are coming down.
I understand as to why the oil companys would want to squeeze as hard as they could.It wasnt that long ago that they had to PAY people to take their product and store it as they could not sell it. That gave us the 2.00 gas during the height of the pandemic. As I see it its just business pure and simple.
 

Neil

Supporter
I once watched T.Boone Pickens (BP Capital) Give a speech on what would happen if you took 5% out of the crude supply suddenly and what it would do to retail prices.He was spot on with this . The only way gas prices will come down is if we stop buying it. Sales have been slowing and prices are coming down.
I understand as to why the oil companys would want to squeeze as hard as they could.It wasnt that long ago that they had to PAY people to take their product and store it as they could not sell it. That gave us the 2.00 gas during the height of the pandemic. As I see it its just business pure and simple.
The "War on Fossil Fuel" didn't help.
 

Ron Earp

Admin
Well, what happens when we overlap the price of crude oil with gasoline? Notice the two Y-axis, barrel price on the left gasoline on the right....lo and behold, they very closely mimic each other. With the exception of the gasoline costs lagging a bit behind the drop in crude prices, the curves are identical.

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Dave Hood

Lifetime Supporter
If you want to save money on gas...

2.2 cents per gallon in Venezuela
3.1 cents per gallon in Libya
5.3 cents per gallon in Iran

I'd gladly pay the current $4.50 for premium fuel in South Carolina.

The "war on fossil fuels" is not to blame for high gas prices. The cost per gallon in China is over $10 per gallon and I don't think they're at war with fossil fuels.

30 years from now the only gasoline powered vehicles will be collector cars. That's a reality that nobody can change. It's inevitable given the direction technology is taking. Complaining about the future of EV technology today is like complaining about the future of streaming video back in the 1990's. Betamax, VHS and Blockbuster are dead......
 

Randy V

Moderator-Admin
Staff member
Admin
Lifetime Supporter
$3.20 in Dallas area. Some stations in Oklahoma are under $3.00 for regular
 

Howard Jones

Supporter
Enjoy the recently slightly lower prices. When the refineries switch over from mostly gas/diesel/av gas to include heating oil, the reduction in gas (that's what they reduce mainly) production will drive the price right back up to 5 bucks a gallon. It's currently about $3.40 ish down from right at $5 weeks ago here in South Texas. My guess is it will bump off $3 in late August or early September before it starts back up towards $5 again,

On top of that, quite a bit of low-risk annual maintenance has been deferred over the summer, and the reduced refinery production levels resulting from those temporary shutdowns to do it now this fall will also increase prices. The only real hope, deeping recession, if that's what you want to call it, is that demand for non-fuel petro products drops due to reduced economic activity as well as demand for fuel products other than heating oil thereby adding production capacity to fuel production.

Refineries in the US are and have been running at flatout production levels most of this year. There simply isn't any refining headspace and if anything goes wrong like a hurricane in the gulf, refinery fire, extreme winter in the northeastern US, or any other unforeseen crude production reductions elsewhere in the world then all bets are off.

As the current recession lengthens and results in increases in unemployment, we may see lower demand for fuel products and that will also lower prices. People don't drive as much if they don't have a job to go to.

Bleak outlook.......................ya...................sorry.
 
From an economics standpoint, what's going on in the background here (at least in the short-term) is "price in-elasticity of demand." What this means generally speaking is that demand changes very little depending on price. Why is this the case with gas prices? Because people still need to get to work, pick up kids from school, mow the lawn, etc. despite a significant increase in price. In the long-term, there are counter-balancing factors which tend to kick in...people gradually switch to EV's, re-arrange schedules to drive less, figure out how to ride the bus etc. But in the short term, we just keep buying gas like before a price jump because we don't have alternatives.

The flip side of this is what T Boone was raising - if we, as consumers, lessen our demand just a bit that can have a very big impact on bringing down prices in the short term. Big Oil (Exxon, Mobil, OPEC, Russia, etc.) has become very dependent upon a steady demand curve such that if we reduce our demand just a little bit they rapidly drop oil prices to maintain steady-state revenues.

In other words, price in-elasticity of demand is both a curse and an opportunity. Some further discussion of it here: https://www.investopedia.com/ask/an...etween-inelasticity-and-elasticity-demand.asp
 
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