Anyone notice the price of gas is going down during a season when it usually goes up?

[NNN0LHI]

Little gesture of goodwill from the oil companies? They know people are easy to bullshit.

Don

[Myrina]

1. I'm finding it especially odd ...

.... I live in Indy and like clockwork, the week before the Indy 500 (when there will be an additional 500k gas-buying tourists in the area), gas prices skyrocket some 20-30 cents a gallon. But yes, I've noticed them dropping all this week.

I suppose once BP gets the gusher plugged they and other companies will have the excuse to jack prices as 'a result of new, expensive gov't regulations' or some shit like that.

[Jokerman]

20. WISH report this morning played like an ad for BP.

They mentioned a boycott of BP organized on Facebook and then checked to see what was happening locally by interviewing people filling up at the BP at 38th & High School. Well, if you interview people buying gas at a BP you're obviously NOT going to find any boycott supporters.

All the people interviewed cited BP as having the best price, which at the time of the report, was seven cents lower than the Shell station across the street.

Funny thing is that I pass through that intersection all the time and have never seen more than a penny or two difference in price between those stations.

I think BP slashed it's price then brought in the news crew to tell us how cheap BP gas is and how silly it would be to boycott the company with substantially lower prices.

[Lochloosa]

2. Demand world wide is going down so there is downward pressure on oil prices.

Economics 101

[earthside]

3. An indicator ...

... of a double dip recession for the U.S.

[Bonobo]

5. Why is demand dropping and how do you know it is, Prof? nt

[Lochloosa]

7. Here you go.

Global oil demand is revised down by 190 kb/d on average for 2009 and 2010, equating to 84.8 mb/d (-1.2 mb/d year-on-year) and 86.4 mb/d (+1.6 mb/d) respectively. Revisions stem largely from changes to non-OECD historical baseline data, as slightly higher GDP prognoses from the IMF are counterbalanced by a higher price assumption.

http://omrpublic.iea.org/

[Bonobo]

11. Thanks, but could you translate that for us that don't speak that language?

"Revisions stem largely from changes to non-OECD historical baseline data, as slightly higher GDP prognoses from the IMF are counterbalanced by a higher price assumption."

I admittedly don't know much, but I recall hearing a very good in-depth story about how we don't even know what a nation's true GDP is even several years AFTER and even then, we don't REALLY know.

It sounds like this is just a "guess" in the common parlance. How would anyone really know if the demand for oil was dropping?

Also, given the acceleration of the Chinese and Indian and other economies, why would it DROP? That sounds counter-intuitive.

[Lochloosa]

13. I'll try. There is a feeling the "acceleration" of Chinese and Indian economies

is not going to happen. A lot of speculators, and that is who drives the oil prices, are betting on a double dip recession. I tend to agree with them.

[Bonobo]

29. Thanks, man. Great job explaining it to a econ dummy like me. nt

[NNN0LHI]

9. Demand is not dropping

http://www.reuters.com/article/idUSTRE63C1CV20100413

World oil demand to hit record high this year

Tue Apr 13, 2010 6:39am EDT

(Reuters) - Global oil demand will hit a record high this year, the International Energy Agency (IEA) said on Tuesday, revising up consumption estimates as the world economy recovers from recession.

The Paris-based adviser to industrialized economies raised its forecast for world oil demand growth this year to 1.67 million barrels per day (bpd), up 100,000 bpd.

The agency said in its monthly Oil Market Report that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009.

The previous record high for world oil demand was 86.5 million bpd in 2007 before the onset of the global financial crisis and economic slowdown.

[Lochloosa]

14. The drop is base on future consumption. The speculators are worried about a "double dip" recession.

[Statistical]

19. Notice the date of that report.

April prior to China inflation bubble, lowered Chinese demand, Euro falling back into recession, risk to capital markets, possible US double dip.

Projections are based on the facts at the time. Oil was rallying in April because the economic outlook as looking brighter.

Today while things are getting better they aren't getting much better and aren't getting better as fast.
Next oil projection will show a decline from that 86.60 number.

Investors/speculators/hedgers are always forward looking. Nobody cares what oil traded at last month they care about what is oil going to trade next month.

[Lochloosa]

25. Thank you.

[Bonhomme Richard]

4. Just goes to show how they manipulate the prices.

I guess they figure that they have to much heat in their direction to risk more focus on their industry.

[proudohioan]

6. Yes, I've noticed that in my area as well.

And a funny side note: my SO was coming home from work yesterday, and noticed that the BP station on the corner was nearly empty, while the Sunoco station across the street had a line at the pumps.

According to him, the Sunoco station's prices were not any lower than BP's.

[justabob]

8. I got gas just this morning... down 30 cents or so since last time

about 10 days ago. IIRC. I remember being shocked at how HIGH prices had gotten again, well over 3 for premium (3.29 3.39, something like that), today was 2.89.

[Exultant Democracy]

10. It's because the fall of the Euro is making the dollar trade high on the capital markets

leading to more buying power for imports.

[madrchsod]

12. there is a decrease of demand in europe and...

there`s still a lot of oil in storage

[Jazzgirl]

15. I thought it was odd when I paid $2.61 yesterday to fill up.

I know I paid $2.79 last week but to go down before Labor Day?? Phenomenal and I've never seen this.

[Frustratedlady]

16. I'll let you know the next time I fill up.

The prices at the pump always go down the next day. Without fail!

[Statistical]

17. The advantage of a strong dollar.

A dollar buys about 10% more goods & services compared to a year ago based on dollar vs basket of currencies.
This is mainly due to the plummeting Euro.

Oil is priced in dollars thus rallying dollar means depressed oil prices.

[OmmmSweetOmmm]

18. Not for me just now. I paid $2.90 a couple of weeks ago and $3.10 today. :(

[NNN0LHI]

22. Nationally prices are down

http://www.dailyherald.com/story/?id=383555

Gasoline prices taking different route this summer

Published: 5/26/2010 8:39 AM | Updated: 5/26/2010 8:53 AM

Heading into Memorial Day weekend, we're seeing something that usually doesn't happen at this time of year. Gas prices going down.

Normally, fuel prices rise before Memorial Day, which kicks off the summer vacation season.

This season, however, gas prices have taken a small dip. And some experts say the trend may continue. "I think prices will continue to slide over the holiday weekend," said analyst Phil Flynn of PFGBest in Chicago.

Many suburban gas stations have lowered prices about a dime a gallon over the past week.

This correlates with the national trend. The average price nationally for a gallon of regular gas is $2.78, which is down from $2.86 a week ago. AAA's Fuel Gauge Reports daily averages for the Chicago area show a gallon of regular gasoline cost $3.02 Tuesday, compared to $3.11 a week ago. "At the pump in some places, we've seen prices fall 19 days in a row now," Flynn said.

[charlesg]

21. The oil CEOs had a little talk

and Cheney was consulted of course.

[msongs]

23. oil own 30%, gas down 2% - yep, it's supply and demand alright lol nt

[Statistical]

31. 2% not sure where you are getting that from? you subtracted taxes right?

http://gasbuddy.com/gb_retail_price_chart.aspx

Nationally gasoline has fallen from $2.94 to $2.77 so that is more like a 6% decline.
However gas taxes are static (unlike sales tax which rises with price of product). National average for state & federal gasoline tax is about $0.35. Removing taxes (which don't change when oil prices change) that is a pretax price of $2.59 to $2.42 which is more like a 7% decline.

Of course the raw oil is only about a portion of wholesale gasoline prices. You still have retail markup, delivery, refining, distribution, and storage costs. Even if oil was free $0.00 per gallon the "everything else" contributes about $1.50 to the cost of gasoline.

[ellenfl]

24. i don't even pay attention because i think they are manipulated. eom

[krispos42]

26. Maybet wo weeks ago...

...I was listening to the news at the top of the hour on WCCO, our local CBS news/talk AM station. There was a brief story about how gas prices were expected to drop by 40¢ in the next few weeks.

Of course, I actually said "Bullshit!" out loud in my car.

Well, gas is down about 22¢ since then... $2.57 a gallon where I am.

:shrug:

I'll take it. Maybe it's the savings from Cash for Clunkers.

[amborin]

27. the Euro is collapsing, that's why...bets are EU will see 2nd econ 'recession'

[ShortnFiery]

28. As soon as an electric car comes off the assembly line less than $30,000 ...

I can't wait to get off of the damn gas. I'm more than willing to adjust my schedules in order to accommodate an electric car.

[Catherina]

30. Just wait until they think people aren't paying attention anymore

You're right. A little gesture to people they have a history of being able to bull-shit. I hope that won't be the case with this catastrophe.

[The Straight Story]

32. Because we hit peak oil. Again

:)