Gas Prices

[fleurya]

Commodities pricing, including crude, has fallen yesterday and is expected to continue today. In the past when crude has gone up gas prices immediately followed suit. I had heard someone say on a news program that prices at the pump immediately go up when crude does despite the fact that they are still pumping gas that was made with cheaper-bought oil. The person said it’s the nature of the fuel business.

Then today I heard another person on a news program claim that we will not see a fall in prices at the pump from this current commodities drop for a while because companies have to work through their more expensive oil first.

So, which is it? They can’t have it both ways! Or is that exactly what they’re doing to make more money from the consumer?

 

[XJ-linux]

They said the same thing last time in 2008. It's their gas, so they price it as they wish when all is said and done.

 

[cwa107]

I would love to understand that as well.

What I really don't understand is the concepts of "speculation" and "futures". It seems like whenever there's some kind of issue in the supply chain, whether it effects supply or not, speculators jack up the cost per barrel. How does that benefit anyone (aside from the oil companies and investors) when we're talking about something as crucial to national security as oil?

I'm not saying it needs to be regulated, what I'm wondering is how is this kind of gambling actually legal? This might be incredibly naive of me (the stock market was never something I've bothered to become well versed in), but it seems to be an injustice nonetheless. It's one thing if supply is constricted, quite another when we're betting on the possibility of constriction some time in the undetermined future.