Can someone please explain the economics

[PieterCoetzee]

Please help me understand the economics of raising the price of gas (or any commodity), NOW because it might become more expensive next month? I get that gasoline prices could (will) increase because of the troubles in the gulf; but thats not the gas that we have at the pumps now, its also not the primary source of our supply, so why are prices rising now?

It seems, at least it seems to me, like the price of roses. All year long they are $__X__ but come February 14th they are $XXXXX. I used to think that was marketing, Now it seems like its "because we can" and that seems to apply to gas prices as well.

 

[Belt Fed]

I think a lot of it is they can, i know when fuel prices increase it will trickle down to other products. but some look at the war as an excuse to raise their prices.

 

[PieterCoetzee]

I think a lot of it is they can, i know when fuel prices increase it will trickle down to other products. but some look at the war as an excuse to raise their prices.

Yeah I get that; but its not just one brand, its sure seems like its every brand; and thats where it falls back to the "because we can" thing

 

[Jester560]

For the same reason a gas station can lower prices on gas they have in the tanks that came from when gas prices were higher. They are playing the futures stock game.

 

[PieterCoetzee]

Your gonna have to 'splain that one.

Gas companies know they have all the customers hooked. Sure we can say I wont buy from Exxon but we'll just go to Shell and is there really a difference

The whole electric car push flopped and it will flop even more if/when the gov stops linking road taxes to gasoline

 

[ECS686]

It’s no different than the ammo crunch during Covid. Simple supply and demand. Of course like the ammo skne folks will fear monger.

The bigger issue with the Straight of Hormuz is while Iram has not been successful shutting it down Lloyd’s of Lindon is the maritime insurance underwriter for almost all the shipping and have refused to insure ships so companies are ported refusing to risk it.

However the relief is the US has offered risk insurance and are starting to escort ships through which will smash the strong hold Lloyd’s of Lindon has had

So while gas will increase it most likely will come down soon

 

[Jester560]

Your gonna have to 'splain that one.

Do you not understand the futures market in investing?

 

[HayesGreener]

It all has to do with the price of a barrel of crude on the global market. Disruption of the supply causes that price to go up due to the law of supply and demand. Then tack on increased costs of insurance on the tankers due to hostilities.

 

[Anchorite]

Do you not understand the futures market in investing?

This!

 

[PieterCoetzee]

Do you not understand the futures market in investing?

Yes I understand futures. Im not Gordon Gekko; but I think Ive got a grasp on it

I can accept that a higher cost of crude will raise prices; just not the raising the price of the stuff on the shelf that was bought before the new stuff went up in price. Thats like looking in my freezer and charging me extra for the stuff I bought last week because next week the food will be higher

 

[Grayfox]

From the second the first shot was fired, MSM has been doom and glooming on rising gas prices affecting just about everything.
This gives the gas companies all the excuse they need to stick it to their customers.

 

[Blackmesa96]

Has anyone else recognized a pattern to how people are manipulated regarding gas prices?

For the sake of simplicity, let's assume a starting price of $2 a gallon. A series of price increases then begins. $2.25, then $2.50, then on to $3 a gallon.

People get irritated and vocal. Then the regression incrementally begins. Down to $2.80, and so on until it drops to $2.25. Now people are saying how great it is that gas prices have come down.

Really? The net increase is still beyond the price where the process began. And, as a bonus, the sellers were able to reap the benefits of the interim higher pricing.

I understand the factors in play regarding gas prices. Cynical old me has seen this cycle repeated far too many times to dismiss it as coincidence.

 

[Anchorite]

Well, in a very general sense the factors impacting gasoline prices are global crude oil cost, refining costs, distribution and marketing costs and federal & state taxes, which are generally reflected in the wholesale costs that gasoline retailers pay to distributors.

It’s a constantly changing series of costs.

 

[Faulkner]

Do you not understand the futures market in investing?

I certainly do, which is why I picked up a couple of extra boxes of ammo (even though I don't need it).

 

[HayesGreener]

Well, in a very general sense the factors impacting gasoline prices are global crude oil cost, refining costs, distribution and marketing costs and federal & state taxes, which are generally reflected in the wholesale costs that gasoline retailers pay to distributors.

It’s a constantly changing series of costs.

Exactly

 

[PieterCoetzee]

So what Im hearing is the general consensus is that the fighting in the middle east is the excuse but has nothing directly due to the cost of the gas here prior the the first shot being fired

Oh yeah and buy more ammo