7 replies to this topic

[gm_general]

I would be very interested to see a graph of oil, say $WTIC, divided by the price of regular unleaded over a good stretch of time. Isn't there a way to do this on Stockcharts? Also, what is the general lag time between when the oil price is set and the gas is delivered to the pump?

[PorkLoin]

Hi GM General, yes - $WTIC:$GASO will do it on Stockcharts, but $GASO only goes back less than three years. Not sure how long it takes oil to go through refining into gasoline, and being transported, etc., but my anecdotal observation is that crude oil price increases lead gas station managers to raise their prices fast these days -- a day or two time lag.


Best,

Doug

[Cirrus]

I would be very interested to see a graph of oil, say $WTIC, divided by the price of regular unleaded over a good stretch of time. Isn't there a way to do this on Stockcharts? Also, what is the general lag time between when the oil price is set and the gas is delivered to the pump?

I'll add to Doug's post with a weekly NAV of the inverse of the ratio--higher numbers mean bigger profits for refiners.

http://stockcharts.com/c-sc/sc?s=$GASO:$WTIC&p=W&b=2&g=0&i=p80578553612&a=104062094&r=234.png

[selecto]

There may be something of a disconnect in here, as "they" say that the price of gasolice is being impacted by domestic refinery issues, rather than by crude.

[Cirrus]

There may be something of a disconnect in here, as "they" say that the price of gasolice is being
impacted by domestic refinery issues, rather than by crude.

Don't believe what you read. Gas is high because of global refining capacity constraints, low US and globabl gasoline inventories and high US and global gasoline demand. The last crack spread explosion was met by a dramatic increase in gasoline imports. The problem now is that inventories are low overseas as well, making importers much less willing to send their gas to the US as it's simply not as profitable as keeping them home given transportation costs and differential.

There is so much crappy info out there on crude, gasoline, NG and many other commodities. I would just watch the charts here--especially the weekly and monthly charts. The trend is up--especially on longer time frames. Global macros should support a bull market in energy for a long time to come.

Edited by Cirrus, 14 May 2007 - 11:31 AM.

[PorkLoin]

Selecto: There may be something of a disconnect in here, as "they" say that the price of gasoline is being impacted by domestic refinery issues, rather than by crude.

You got that right -- crude oil is only up about 25% from the January low while wholesale gasoline has gained roughly 75%! So the pump price has gone up on quite a few occasions when crude has been flat or gone down. Oil hasn't gained on gas in any meaningful way for almost nine months.

Prices are pretty competitive where I am -- the eastern Ohio, western PA, WV panhandle area of the USA -- and local dealers say the only time they can make any even half-decent money is when the wholesale price decreases. They raise the pump price as fast as they can when it's going up, then try to take their time in lowering the pump price when it declines. There is always some poor-mouthing that goes on, but I do think the per-gallon profit isn't much, usually.

Last fall and early winter, before gas (and the ratio) really took off, I would notice that crude would be up for 2 or 3 days, and pump gas price would mirror that with maybe a day or two lag.

I figured that $2.50 a gallon would result in some demand destruction as people decided to drive less. Didn't work that way, and it hasn't for $3 per gallon either. Wonder when it will....? I gotta think that $4 or $5 would, as it has in Europe over the years.


Ciao,

Doug

[nimblebear]

Selecto: There may be something of a disconnect in here, as "they" say that the price of gasoline is being impacted by domestic refinery issues, rather than by crude.

You got that right -- crude oil is only up about 25% from the January low while wholesale gasoline has gained roughly 75%! So the pump price has gone up on quite a few occasions when crude has been flat or gone down. Oil hasn't gained on gas in any meaningful way for almost nine months.

Prices are pretty competitive where I am -- the eastern Ohio, western PA, WV panhandle area of the USA -- and local dealers say the only time they can make any even half-decent money is when the wholesale price decreases. They raise the pump price as fast as they can when it's going up, then try to take their time in lowering the pump price when it declines. There is always some poor-mouthing that goes on, but I do think the per-gallon profit isn't much, usually.

Last fall and early winter, before gas (and the ratio) really took off, I would notice that crude would be up for 2 or 3 days, and pump gas price would mirror that with maybe a day or two lag.

I figured that $2.50 a gallon would result in some demand destruction as people decided to drive less. Didn't work that way, and it hasn't for $3 per gallon either. Wonder when it will....? I gotta think that $4 or $5 would, as it has in Europe over the years.


Ciao,

Doug

These gas prices stink here. (Chi.) $3.50 average- highs are higher. We are not even into summer driving season. If this doesn't slow the economy nothing will. Truckers gottta be taken it in the shorts.
Eventually these pass throughs will hit goods pretty hard. The fed will be pressed to say inflation is in check. Food prices are going upward pretty steadily from what I've seen. Clothes are still cheap. Electronics cheap. But I can go a long while before I need either. The stinking gas, food, and electric - in short most of what you need everyday is really getting silly. Once prices get high on these items they won't go back. Your base costs (fixed) keeps going way up. Property taxes are setting new records.
Pretty soon we won't have to worry about illegal immigrants. We will all outsource ourselves to another country b/c we can't afford to live here.

[SilentOne]

We will all outsource ourselves to another country b/c we can't afford to live here.

You might not want to come to England. We are currently paying about $7.50 per US gallon and that hasn't changed much in the last couple of years. And yes we still drive cars here.

cheers,

john