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Fuel prices world-wide

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US Prices dropping?

I am curious as our local gasoiline prices are now down to $3.04 in late November here in NE Tennessee. But with oil prices hovering near $100/barrel I am surprised to see gaoline this low. Are other areas seeing a drop? I would think gasoline would be rising slightly not dropping.
 
Gas Price Historical Price Charts - GasBuddy.com
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Because of reduced usage, or because of fear that high gas prices will validate them? (Or are you being sarcastic?)
If the former, I would doubt it as the # of LEAFs + other EVs are just a "drop in the bucket". (Based on #s of vehicles, Prius effeciency counts for more overall reduction)

There seems to be some sense that prices are not so much driven directly by supply and demand, but rather political and market speculation forces.

Possibly some factors:
#1: Powers that be trying to keep them artificially low to keep our stagnating economy from totally collapsing.
#2: Oil industry trying to make sure we keep using lots of their product and they sell based on what people are willing to tolerate without running to alternatives.

I think it is well acknowledged that the business plan for sales of cars like the LEAF to grow will depend on gas prices going up.
Nissan isn't ready to handle more demand until their new factories (like in Tennessee) come online. So, lower gas prices now aren't going to stop the LEAF (and Model S for that matter.) But I think in say 2-5 years it is assumed that gas prices will rise and add more interest to purchasing those types of cars.
 
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Look at this:
Gasoline and Diesel Fuel Update

A couple things to notice.
Gasoline prices have dropped, but diesel prices are up dramatically.
They come from the same crude oil source and the price of oil is up.
It seems to me that the oil companies are reducing their profit margin on gasoline and making up for it on the diesel.
Will this be a short term thing or a long term thing? Consumer gasoline demand is probably more elastic than the industrial diesel demand, so they are trying to keep consumer demand up.

Also notice the infographic where it shows that 69% of the price of gasoline is crude oil, and 62% of the diesel price is crude oil.
The distribution, marketing and refining cost is shown as higher for diesel. That seems bogus - I wish I had old versions of this data archived.
I think that is accounting games from the oil companies putting more of the costs into diesel to justify its higher price.
 
Some good sources to follow for insights on the oil/gasoline market:
API Pump Update
U.S. Energy Information Administration's Short Term Energy Outlook

There's been some interesting stuff going on with WTI, as one of the big pipelines that historically moves oil to the WTI pricing point (Cushing) is being reversed to drain oil out of Cushing and bring it down to the Gulf Coast refineries. This apparently small move had global implications for oil prices and, in particular, the WTI/Brent basis differential. I'm not a gasoline expert, but that could have something to do with it.

Also, remember that there is seasonality in refined product prices (gasoline prices are higher in summer) and that refiners crack a barrel of crude into components based on forecast seasonal demand. They may simply have gotten the forecast demand mix wrong, made too much gasoline and too little diesel.
 
There seems to be some sense that prices are not so much driven directly by supply and demand, but rather political and market speculation forces.

Being amazed everyday by the European political arena I wonder what's left of political forces or indeed if there ever have been any.

My observation: when people expect oil prices to rice, the market buys oil futures. Sometimes with good reasons - an airline company can do this as insurance against spikes in oil prices - sometimes with nothing but speculative motives. No matter how: this drives up prices and prices rise.

When people expect oil prices to fall the reverse takes place and prices do fall.

To those in the know: There must be a name for this. Anyone? Anyone?

There may be some residual supply/demand thing at work in the background but the big price driver seems to be something not quite unlike a mind game. A very big mind game, mind you!
 
TEG, you caught me again :biggrin:
I am aware that even one million EVs will make a little dent in US oil demand.

I think it is allowed to use some brain-damaged argumentation against brain-damaged EV haters. "You want low fuel prices? Make the Govt pay for lots of EVs for all the celebs, and leave the gas for the working classes!"
 
I think it is allowed to use some brain-damaged argumentation against brain-damaged EV haters. "You want low fuel prices? Make the Govt pay for lots of EVs for all the celebs, and leave the gas for the working classes!"
:smile:
Sadly, this is exactly how I convinced the Massachusetts utility commission to approve the Cape Wind contracts -- the above-market cost of the contracts was more than outweighed by the reduction in market prices for all the other power sold in the wholesale market (adding 468 MW of $0-bid energy does that. Really.).
 
:smile:
Sadly, this is exactly how I convinced the Massachusetts utility commission to approve the Cape Wind contracts -- the above-market cost of the contracts was more than outweighed by the reduction in market prices for all the other power sold in the wholesale market (adding 468 MW of $0-bid energy does that. Really.).

Sadly? How is that sad? Seems like a win-win to me. More renewable power and reducing the profits of subsidized dirty power.
 
Because my usual clients are the guys who own fossil-fired power plants. ;-) In truth, what I told the Commission was that most of the consumer benefit was directly reducing profits of generation owners; as an economist, I can't tell the Commission whether that transfer is a good thing or bad, but as policymakers, they certainly can make that call.

The subsidies on gas-fired generation are, on a per-WHh basis, not very high. We even have a carbon tax here in New England, further removing distortions from unpriced negative output (pollution).
 
An interesting news bit, which is good news for EVs:

12:01 PM Gulf Oil CEO Joe Petrowski warns (video) drivers that gas prices are heading higher, as he sees $3.50/gallon shortly and $4.00/gallon if an event occurs in the Strait of Hormuz. He calls out the $3.80/gallon mark as the level where consumers start to pull back on spending.