Biden demands faster drop in gas prices as oil tumbles

[Chomsky]

Biden demands faster drop in gas prices as oil tumbles

President Joe Biden is using his bully pulpit to call out the tendency for gasoline prices to go up like a rocket when oil spikes, but only drop like a feather when crude crashes.

www.cnn.com

Biden fired off a tweet Wednesday morning highlighting the painfully slow decline in gasoline prices in a bid to draw scrutiny to a decades-long trend that critics say hurts consumers by failing to pass savings along to drivers.

"Oil prices are decreasing, gas prices should too," Biden said on Twitter. "Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it's $4.31. Oil and gas companies shouldn't pad their profits at the expense of hardworking Americans."

--

Does Biden have a point?

It appears oil has been tumbling the last week, down 23%.

 

[Mycroft]

Biden demands faster drop in gas prices as oil tumbles

President Joe Biden is using his bully pulpit to call out the tendency for gasoline prices to go up like a rocket when oil spikes, but only drop like a feather when crude crashes.

www.cnn.com

--

Does Biden have a point?

It appears oil has been tumbling the last week, down 23%.

Biden and his pukes are STILL trying to deflect blame. First, it was COVID. Then it's the Russians. Now, it's those greedy oil companies.

They won't ever own up to THEIR part in rising oil prices and the resulting inflation.

 

[CaughtInThe]

of course he has a point.


and that will piss off the cult.

 

[The AntiDonald]

Biden and his pukes are STILL trying to deflect blame. First, it was COVID. Then it's the Russians. Now, it's those greedy oil companies.

They won't ever own up to THEIR part in rising oil prices and the resulting inflation.

When you see that Biden's comments won't cause gas prices to drop any quicker than they normally would, perhaps you'll realize that Biden had nothing to do with the rise in oil prices.

We can produce as much oil in the US as we want to, but the prices are set by a global market. As far as the oil companies gouging us for every last penny they can get away with, that's a given as it's been going on since the beginning of the oil revolution.

 

[Chainsawmassacre]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas. Takes a while to get through delivery to refineries, get refined, get delivered to gas stations and finally get pumped by consumers.

 

[Chomsky]

Biden and his pukes are STILL trying to deflect blame. First, it was COVID. Then it's the Russians. Now, it's those greedy oil companies.

They won't ever own up to THEIR part in rising oil prices and the resulting inflation.

Yeah . . . but . . . numbers . . .

 

[mike2810]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas. Takes a while to get through delivery to refineries, get refined, get delivered to gas stations and finally get pumped by consumers.

What you say about it taking some time from oil purchased and refined to the pump is true. Then the rise of the price of gas should also be delayed. Takes a while for the refined oil into gas to be used up. Yet, it seems if the price of oil goes up today, the price of gas will increase by tomorrow. When the price of oil goes down it will take weeks for gas prices to drop.

 

[Chomsky]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas. Takes a while to get through delivery to refineries, get refined, get delivered to gas stations and finally get pumped by consumers.

What Biden is complaining about, is the "Rocket-Feather" effect, that is so prevalent that the term is used within the industry.

In reaction to oil prices, increases cause gas prices to immediately rise like a rocket, but decreases cause gas prices to slowly settle like a feather.

Perhaps there's a legitimate rationale? Or perhaps, oil companies are gouging the consumer?

Which is it?

 

[Chomsky]

What you say about it taking some time from oil purchased and refined to the pump is true. Then the rise of the price of gas should also be delayed. Takes a while for the refined oil into gas to be used up. Yet, it seems if the price of oil goes up today, the price of gas will increase by tomorrow. When the price of oil goes down it will take weeks for gas prices to drop.

Exactly.

I could buy the idea that there's a lag time in the system.

But if so, why is it not reasonably symmetrical?

 

[Mach]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas. Takes a while to get through delivery to refineries, get refined, get delivered to gas stations and finally get pumped by consumers.

Then why did the rice in gas prices in response to a rise in oil prices happen so fast if it's all about propagation time as you describe?

 

[beefheart]

Biden and his pukes are STILL trying to deflect blame. First, it was COVID. Then it's the Russians. Now, it's those greedy oil companies.

They won't ever own up to THEIR part in rising oil prices and the resulting inflation.

Gas prices are up all over the world, how did Biden do that?

 

[The AntiDonald]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas. Takes a while to get through delivery to refineries, get refined, get delivered to gas stations and finally get pumped by consumers.

No kidding. But when the oil prices rise, the gas price at the pumps rises instantaneously. Why is the reverse not true? In a global market, that difference of 3-4 days is worth billions collectively.

Why was it when a few years ago, oil dropped to a negative dollar amount, didn't the pump prices drop accordingly? That's the point when profits started to soar beyond anyone's comprehension.

I see only one way to get out from under the thumb of the oil cartels, and that's to stop using so much. It's a pretty common-sense theory.

 

[Chomsky]

Biden and his pukes are STILL trying to deflect blame. First, it was COVID. Then it's the Russians. Now, it's those greedy oil companies.

They won't ever own up to THEIR part in rising oil prices and the resulting inflation.

You're blaming Biden now, for the rise in international oil prices?

 

[Mycroft]

Gas prices are up all over the world, how did Biden do that?

Doesn't matter about "all over the world". The US can be independent of world oil prices. We can control the market.

 

[Mycroft]

What Biden is complaining about, is the "Rocket-Feather" effect, that is so prevalent that the term is used within the industry.

In reaction to oil prices, increases cause gas prices to immediately rise like a rocket, but decreases cause gas prices to slowly settle like a feather.

Perhaps there's a legitimate rationale? Or perhaps, oil companies are gouging the consumer?

Which is it?

There are layers between the oil companies and the gas stations. Each of them react to changes. Reactions to bad changes happen immediately. Reactions to good changes happen slowly...or, a better word, cautiously.

Nobody in the chain of layers wants to be left holding the bag.

 

[mike2810]

Exactly.

I could buy the idea that there's a lag time in the system.

But if so, why is it not reasonably symmetrical?

Greed.
Easy for them to jump the price up.

 

[Chomsky]

There are layers between the oil companies and the gas stations. Each of them react to changes. Reactions to bad changes happen immediately. Reactions to good changes happen slowly...or, a better word, cautiously.

Nobody in the chain of layers wants to be left holding the bag.

Perhaps.

Meanwhile, I'm sure they don't mind the profit windfall.

 

[Bubber]

Doesn't matter about "all over the world". The US can be independent of world oil prices. We can control the market.

How?

 

[BirdinHand]

Perhaps there's a legitimate rationale? Or perhaps, oil companies are gouging the consumer?

Which is it?

The price you pay at Gas Station XYZ is predicated upon their supply and the prices THEY pay.

If they have a tank that holds 30-40K gallons of fuel - they'll INCREASE the price at the pump in reflection of their anticipated price to refill those tanks based on oil futures pricing in the market. But it gets more difficult to decrease the price at the pump because they've already paid $X for the fuel that is in the tanks/deliveries they've ordered, etc. Some of these stations get as many as 3-4 deliveries a day depending on how busy they are - and may have contracts where they are pre-paying for fuel for X deliveries at a time.

Keep in mind - the average markup at a gas station is something around $.15/gallon. And from that margin is where they live or die - the business makes money or goes out of business.

I never cease to be amazed that people think prices for ANYTHING should come down as quickly as they go up. Seems to show how little most Americans actually understand supply chains.

 

[CaughtInThe]

Oil purchased at a certain price point doesn’t instantaneously get to the pumps as gas.

Which means that oil produced cheaply that's already at the gas pumps should not cause the prices to skyrocket at the gas pumps.

 

[Chainsawmassacre]

Which means that oil produced cheaply that's already at the gas pumps should not cause the prices to skyrocket at the gas pumps.

Right now oil at the pump was purchased at a very high price. It should start going down soon and reflecting cheaper oil of today.

 

[BirdinHand]

Which means that oil produced cheaply that's already at the gas pumps should not cause the prices to skyrocket at the gas pumps.

You have underground tanks that hold 40K gallons of gasoline/diesel.

You need to fill those tanks X times a day/week to meet the demand at your station.

Your profit margins are around $.15/gallon.

When the price for futures spikes quickly and instantly - you need to raise the prices at the pump to cover the costs of your upcoming deliveries.

This really isn't very complicated to understand.


Prices are slower to come back down because the fuel in the tanks/already ordered was at the higher price...and businesses don't like to lose money because future deliveries pricing has decreased.

 

[Chainsawmassacre]

kidding. But when the oil prices rise, the gas price at the pumps rises instantaneously. Why is the reverse not true? In a global market, that difference of 3-4 days is worth billions collectively.

Gas station owners themselves are responsible for that.

see only one way to get out from under the thumb of the oil cartels, and that's to stop using so much. It's a pretty common-sense theory.

And or producing more

 

[Chomsky]

The price you pay at Gas Station XYZ is predicated upon their supply and the prices THEY pay.

If they have a tank that holds 30-40K gallons of fuel - they'll INCREASE the price at the pump in reflection of their anticipated price to refill those tanks based on oil futures pricing in the market. But it gets more difficult to decrease the price at the pump because they've already paid $X for the fuel that is in the tanks/deliveries they've ordered, etc. Some of these stations get as many as 3-4 deliveries a day depending on how busy they are - and may have contracts where they are pre-paying for fuel for X deliveries at a time.

Keep in mind - the average markup at a gas station is something around $.15/gallon. And from that margin is where they live or die - the business makes money or goes out of business.

I never cease to be amazed that people think prices for ANYTHING should come down as quickly as they go up. Seems to show how little most Americans actually understand supply chains.

So it seems they are doing exactly what Biden claims:

They are taking a higher profit on the prices they raise against the cheap gas in the tanks, then keeping that profit when they sell the new gas in the tanks & keep the same price as prices recede back down..

Basically, they seem to be profiteering.

 

[Chillfolks]

If Biden has no power or can’t impact the prices as they rise then he has none as they fall.