Well Folks - Fill Your Gas Tanks Up Today.....

[global1]

while the price of gas is still low - cause it's going to go up real soon.

[MADem]

1. Have they switched to the "winter blend" yet?

That's usually the 'excuse' they give.

You'd think, since they do it every year, the swap from summer to winter blend wouldn't cause so much agita. But that's always the reason I seem to hear...!!!

[Ex Lurker]

2. I assume the OP is referring to the election

and how it will play out in the economy and/or foreign policy.

[MADem]

3. Sure...but you still need an "excuse."

The excuse always used to be "Well, they're switching over to the winter blend, and the costs associated with gearing up the refineries to do that is passed on to the consumer."

I always thought that was horseshit, but I've heard it time and again!

[HereSince1628]

4. I dunno, the r's love war, and the price of oil is part of the energy weapon

being deployed against Putin.

They surely could add a dollar of profit to make 4 dollar a gallon gasoline. But WalMart was sort of looking for most of that dollar to show up in it's holiday cash registers.

I'm not sure they want to turn their cash cows against each other.

[MADem]

6. Yes, in that case they'd want energy costs to go down, down, down!

Putin makes a shitload of his money off the energy sector. Pushing down the cost of energy deprives him of needed rubles to build his New Russian Deep Water Fleet.

See? http://www.eia.gov/todayinenergy/detail.cfm?id=17231

Oil and natural gas sales accounted for 68% of Russia’s total export revenues in 2013

Lower energy costs, and you've got your paws in Putin's wallet! No need to send in any troops in critical mass, anywhere! In fact, we can continue downsizing and save a bundle in that sector, too.

[JonLP24]

8. I never heard that one

though I often heard "the higher prices" because of "higher costs" which is bullshit when supply and demand is the driving factor behind pricing. If they raised prices and fewer people purchased because of the higher prices than they'd lose money to deal with the higher costs. If oil companies needed to raise the price on the theory to make more money to cover the costs they would have already raised the price to make more money.

Though when it comes to gas prices there are several factors unique to most products that affect pricing, primarily the cost of crude oil which is affected by supply & expected demand.

I can see pricing due to demand rising and falling seasonally though I'd expect higher prices in the summer because more people are outside driving their cars.

On edit - if there was a specific refining process needed to adapt to seasons, I can see a shortage of refineries or changing the equipment needed to refine the oil slowing down the supply but this would be a bigger impact in the summer with the obvious higher demand.

[MADem]

14. I think there's a law that says they HAVE to switch over from one blend to the next

by a certain period of time.

If they are late in doing that, it creates scarcity and we know what scarcity does...!

[JonLP24]

18. Learning about the refining process is interesting but appears to have a significant effect on suppl

Some retailers must sell summer-blend fuels much earlier. California, which has one-eighth of the country’s population, has among the most stringent requirements, both in terms of the complexity of the fuel and the date at which summer-blend fuel must be sold. In Northern California, retailers must sell summer-blend fuel a month earlier than the rest of the country: May 1. In Southern California, the deadline is two months earlier: April 1. One of the reasons why California has a longer summer-blend period than other states is because of its longer period of high temperatures — particularly in the desert areas, which are located in the air district with the worst quality of air.

There are other key deadlines that additionally put stress on the system. Nationwide, refiners must produce summer-blend fuel no later than April 1. (Obviously, deadlines are earlier for California’s fuels.) From refineries, fuels travel through pipelines at about 4 miles per hour, or 100 miles per day. Fuels refined in the Gulf Coast can take several weeks to reach storage terminals throughout the country. This is why the deadline to have summer-blend fuel at terminals and storage facilities is May 1 — a month after the transition at the refineries.

The May 1 deadline for terminals is considered one of the biggest factors in the seasonal price increases. Terminals have to fully purge their systems of winter-blend fuels and be near empty to make the transition and be in compliance. Those out of compliance face stiff penalties, so most terminal operators would rather be out of inventory than out of compliance. This regulatory requirement leads to lower inventories at the terminal. Combined with increased demand, this puts upward pressure on prices.

http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2014/Prices/Pages/Why-Prices-Historically-Go-Up-in-the-Spring.aspx

They still have to go "offline" to make the switch meaning they aren't supplying any gas in that time. Also the process takes longer and yields less gas further affecting the supply.

The supply issues combined with the increased demand is the reason for the higher prices. There may be a small bump due to the actual cost rather than the slow down issues but I doubt it, prices are raised because they can be raised rather than must be. Overall summer gas prices were lower last year and larger supply credited w/ more imports from Canada, increased US production, and less demand credited

[Travis_0004]

5. winter blend is cheaper

We have been on winter blend fuel for almost 2 months now

[MADem]

7. Well, if the price of gas stays low, that's more money in our wallets. nt

[Travis_0004]

9. Im awar of that

You are just trying to make it sound like winter blend is some kind of scam, and I can assure you it isnt.

[MADem]

12. WTF? I am saying that in the past, the "word" has always gone out that the switch

is what "caused" price rises. It was used as an excuse. I'm not saying it was a valid or factual excuse, it was just trotted out by the "some people say" crowd.

[Travis_0004]

13. I hear talk of summer blend raising prices

Which isnt all that odd, since its true.

[onenote]

16. You are wrong. And you should admit it.

You may think that the "word" "always" goes out that the switch to winter blend caused prices to jump. But in fact, it is the exact opposite, as even a minute of google research would indicate.
http://newsroom.aaa.com/2014/09/cheaper-crude-winter-blends-mean-less-expensive-gas-motorists/

If you can find a story saying the winter blend switch is responsible for increasing gas prices, please post.

You're entitled to your opinion. But not to made-up facts. Leave that for faux.

[MADem]

17. I am not ARGUING that winter blend "IS" more expensive.

I am arguing that the excuse that "the refinery has to switch over" is often used as a reason for a price rise owing to (alleged) SCARCITY of product.



Sample from the recent past: http://www.dailynews.com/20121005/gas-shortage-shutters-costco-stations-prices-skyrocket

The average price of gas Thursday in Los Angeles was reported at $4.35 a gallon.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, said California prices should continue to rise as retail prices catch up with wholesale prices.

"Wholesale prices have gone up $1 a gallon in the last week alone, and retail prices have only followed for 30 cents, so there unfortunately is room for retail prices to climb, and that's likely what they'll do," DeHaan said.

In recent weeks, California refineries have dropped production in anticipation of switching over to a "winter blend" of gasoline, which emits more polluting emissions, next month.

[onenote]

19. Short term bump is due to scarcity.

There can be a short term bump as the switchover occurs, because it really does result in a scarcity. It usually is a short lived bump, after which time prices fall with the availability of the cheaper winter blend.

It is to deal with this problem that, for example, in 2012, Gov. Brown asked that that the legislature allow the earlier use of winter blend. If it was an entirely phony problem, the relief he sought wouldn't make a difference.

http://blogs.sacbee.com/capitolalertlatest/2012/10/jerry-brown-calls-for-switch-to-winter-blend-fuel-to-ease-gas-prices.html

[MADem]

20. Yes, that is the only point I am making.

There's always this "scarcity" around the time of change, and that causes the prices to go up.

Never mind that we go through this change twice a year and have been doing so for a long, long time--they seem to have a perpetual difficulty planning for it. EVEN though they know it is coming, like Christmas, each and every year!

[JonLP24]

21. My claim was slow down supply

"dropped production" clearly implies they aren't suppyling gas in the time to switch.

Why it doesn't have the same effect? Because the process requires more ingredients, takes longer, and yields more gas combined with the drop-off in demand.

[MADem]

25. All I am talking about here is "consumer perception."

Consumers remember when prices go up. They get pissed off and screech.

They harrumph and say "About time" when prices go down.

I'm not talking about what the long term effects are on the market, whether prices are sustained, or any of that--yet I'm being called a liar and told to apologize.

It's exhausting to have a conversation on DU sometimes.

[JonLP24]

26. I think I may have

misunderstood your posts. I just was trying to explain prices are driven by basic supply & demand issues though there are other factors though revolve around same issues. But I was just misunderstanding the point you were making.

Got really confused the called a liar & apologize part. I figure you're probably talking about another conversation as you won't have to worry about that with me. I'm hardly offended much less emotional vested in this discussion. Economics in general fascinates me which drew me to this thread.

[MADem]

27. Cheers, never worry!

[muriel_volestrangler]

10. Oil continues to slide, with Brent at lowest in over four years

Crude-oil futures extended losses in Asian trade Wednesday, with the U.S. oil benchmark at its lowest in more than three years and Brent at its lowest in over four years.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December CLZ4, -0.39% traded at $76.81 a barrel, down $0.38 in the Globex electronic session. December Brent crude LCOZ4, -0.71% on London’s ICE Futures exchange fell $0.60 to $82.22 a barrel. Crude oil finished at a 3-year low on Tuesday.

A steady stream of weak economic data from Europe is weighing on Brent crude oil prices, pushing it lower along with the drop in U.S. oil prices, analyst Tim Evans at Citi Futures said.

“The downward revision in the eurozone macroeconomic outlook and the further decline in prices were both more of a confirmation that a bearish trend remains than any stunning new development,” he said.

http://www.marketwatch.com/story/oil-continues-to-slide-with-brent-at-lowest-in-over-four-years-2014-11-05

[hack89]

11. No - the Saudis have not inflicted enough economic pain on Canada

Canadian tar sand oil, American fracking and Saudi market share is what low oil prices are about.

[JonLP24]

15. Good points

On edit - not sure if my facts regarding renewable energy consumption are correct but what you say is the primary reason.

[roamer65]

23. Yep, it's about eliminating the competition.

It's a trade war, basically.

[TransitJohn]

24. I think it's more about the Saudis and us putting the squeeze on Russia to defund them. eom

n/t

[Vinca]

22. It'll go up and, of course, it will be Obama's fault.