Super User roadwarrior Posted January 9, 2009 Super User Posted January 9, 2009 WOO-HOO! We just busted $40 again...$39.75 ;D ;D ;D ;D Quote
Super User fishinfiend Posted January 9, 2009 Super User Posted January 9, 2009 Too bad gas does not go down as quickly as it goes up. It went up $.25 in less than 10 days here. Quote
DEISWERTH Posted January 9, 2009 Posted January 9, 2009 Too bad gas does not go down as quickly as it goes up. It went up $.25 in less than 10 days here. Ya, why is that? Quote
Super User Root beer Posted January 9, 2009 Super User Posted January 9, 2009 Ya, why is that? http://www.investopedia.com/terms/d/deflation.asp Quote
Super User roadwarrior Posted January 9, 2009 Author Super User Posted January 9, 2009 Check your link. The one you posted has nothing to do with the topic of this thread. Quote
Super User Root beer Posted January 10, 2009 Super User Posted January 10, 2009 Read the question. Reason I think oil price doesn't drop as fast as it rise is due to action taking to counter deflation. Make sense? Quote
Super User roadwarrior Posted January 10, 2009 Author Super User Posted January 10, 2009 Read the question. Reason I think oil price doesn't drop as fast as it rise is due to action taking to counter deflation. Make sense? No, none at all. When oil prices are rising, retail stations justify immediate mark-ups for "replacement cost". When they are falling the excuse for lagging is the cost already incurred. Either way, the consumer gets screwed! Quote
Eddie Munster Posted January 10, 2009 Posted January 10, 2009 Read the question. Reason I think oil price doesn't drop as fast as it rise is due to action taking to counter deflation. Make sense? No, none at all. When oil prices are rising, retail stations justify immediate mark-ups for "replacement cost". When they are falling the excuse for lagging is the cost already incurred. Either way, the consumer gets screwed! Hit the nail on the head there. I was gonna be more blunt about it and just call it GREED. Either way you say it, it ticks me off. Notice how the cost of food, building materials, etc still haven't come down to match the plummeting oil/gas prices. Again, GREED. The GREED involved with the runup of oil/gas had more of a disastrous effect on the economy than the mortgage/bank crisis. > Quote
Super User Root beer Posted January 10, 2009 Super User Posted January 10, 2009 RW, if it cost retailers 2.00 to buy the oil from suppliers and the markup cost comes to total of 3.00 (just for sake of this argument) If oil prices rises wouldn't the cost for retailers to buy also rises? Which means instead of paying 2.00 they are paying 3.00 and the oil are 4.00 a gallon. So, if they are buying at 2.00 and selling at 4.00 there no way they could be doing that. If that really goes on my brother would be doing that with food when he sells bread to grocery stores. When the price for consumers changes so does the price for the suppliers to buy.correct? I remember on local news that some gas station ran out of gas because the owner didn't want to buy the oil that high. So, how is it lagging because the price already occur? Quote
tyrius. Posted January 10, 2009 Posted January 10, 2009 Read the question. Reason I think oil price doesn't drop as fast as it rise is due to action taking to counter deflation. Make sense? Retail gas prices do not fall as fast as oil prices because of a couple of factors. The main one is because of an economic concept known as sticky prices. http://www.msnbc.msn.com/id/27269544/ Others are: That retail gas stations make a ridiculously small margin on gas. This is especially true during times of rising prices. So, the gas station tries to make up for the time of rising prices during times of falling prices. The cost of wholesale gas (to the station) does not always change at the same time and same amount as the price of oil. If oil declines 50%, but wholesale gas prices only fall 25% then gas stations will not be lowering their prices by 50% RW mentioned replacement cost. Gas Stations always have to keep this in mind. So, as the price of oil/gas falls they need to be fairly sure that it isn't going to rise the before they have to repurchase their next shipment of gas. Individual stations are more than likely owned by a person. These people are making all of the profit gleaned from a barrel of oil. Their only profit is the difference between the wholesale price and the retail price minus their operating costs. There are more, but this should get you started. Deflation is a result of the lower costs to the producer/retailer being passed all the way down to the consumer. Economic deflation can be REALLY bad. Quote
Super User roadwarrior Posted January 12, 2009 Author Super User Posted January 12, 2009 $37.76 this morning ;D ;D ;D ;D ;D ;D Quote
Super User fishfordollars Posted January 12, 2009 Super User Posted January 12, 2009 Yep, and gas went up another .03 this morning to 156.9 Just an introduction of things to come. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.