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mudmixer · 12-16-2011, 07:29 AM

How about this - Iran imports gasoline and subsidizes the dirt cheap (or lower) gas prices for the people. Apparently, it is cheaper than building refineries.

I am sure the Venezuelan gas is also subsidized for political reasons.

Much of the cost of refined petroleum is in the construction and operation of the refineries. The distribution, storage, inventory and marketing of the fuel is also on top of that.

The cost of the crude is to a great extent due to the speculators that maintain a market and market price that is affected by what the fuel demands will be and where they will be. Most refiners buy crude futures through a speculator system because there is so much joint ownership of wells, refineries, pipelines and retail operations. The retail price is defendant on the refinery price and the local demands and inventories. - In other world it is a "can of worms" and then the individual federal and state governments add the taxes on top.

Dick

**TxBuilder** · 12-16-2011, 08:13 AM

I've read a few articles on speculation driving up market costs and it's a shame.

In countries with huge desserts and nothing else wheeling is huge, so if the gas isn't cheap I'm sure it can't be done, which might start an issue with their governments.

campbellsoup · 12-16-2011, 04:49 PM

Quote:

Originally Posted by TxBuilder

I've read a few articles on speculation driving up market costs and it's a shame.

In countries with huge desserts and nothing else wheeling is huge, so if the gas isn't cheap I'm sure it can't be done, which might start an issue with their governments.

well said, I totally agree

SnellExperts · 12-21-2011, 02:18 PM

What do you mean about speculation driving up market costs?

mudmixer · 12-21-2011, 07:36 PM

Speculators do not necessarily drive up the price, but are a source of oil already committed for. In some cases they also lose money. The speculators are buying based on estimates of the future price of crude oil (not usually refined gas and oil). They are frequently used by the refiners to make up any short term shortages because they do not want to be committed to pipelines, pumpers or drillers for long term guarantees.
Often speculators get involved in the crude oil sales between countries and some times in the refined petroleum markets. Speculators commit to buy future guaranteed sales to drillers and then are stuck unless they can sell it.

They can set the price they are willing to sell for.

Dick

Garenius · 12-22-2011, 10:37 AM

The price is going up again here...kinda depressing. Soon enough my yearly gas bill will cost more than my car =/

SnellExperts · 12-26-2011, 12:13 PM

Quote:

Originally Posted by mudmixer

Speculators do not necessarily drive up the price, but are a source of oil already committed for. In some cases they also lose money. The speculators are buying based on estimates of the future price of crude oil (not usually refined gas and oil). They are frequently used by the refiners to make up any short term shortages because they do not want to be committed to pipelines, pumpers or drillers for long term guarantees.
Often speculators get involved in the crude oil sales between countries and some times in the refined petroleum markets. Speculators commit to buy future guaranteed sales to drillers and then are stuck unless they can sell it.

They can set the price they are willing to sell for.

Dick

Gotcha, so they kind of have a pretty big impact on the price of gas then.

**TxBuilder** · 12-26-2011, 01:40 PM

$2.99. It went down over Christmas.

mudmixer · 12-26-2011, 02:15 PM

It sounds like the refineries in Texas were filled before Christmas, so the gas had to go somewhere. You do not start and stop or switch products in a refinery very quickly, so the excess has to go somewhere. Price is a minor incentive since the customers do not store too much.

Dick

SnellExperts · 12-27-2011, 05:23 PM

Thought I would repost again since I was kinda shocked when I got back into town today and saw the gas prices. $2.94!!!