gigi2005

Here in the Netherlands its even more expensive 1,34 Euro a liter and a Euro is about 1.30 dollar so it costs around 6 dollar a gallon.

arubberchicken

for america it is expensive... but i dont have to pay for my gas yet... but i am dredding the day that i have to

Crash Override

yeah i really dont like paying for gas but hey i get to drive places

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Im the one who walks and lives in the shadows.

Toecutter

If you want to see what's going on, go to Bloomberg.com, and check out the "Commodities" link under "market data". The WTI Crude Future price lists the price per barrel of oil on the present day, and the change in it's trading price based on the prior day's end.

OPEC has basically been playing games the last few months, first expanding production and dropping the artificially inflated crude oil prices, and then cutting off production after we start to relax. If you consider who's involved in OPEC (Hugo Chavez, and how many nasty Middle-Eastern nations, most of the members who got together recently for that meeting which focused on denying the Holocaust ever happened), then it's fairly obvious we can make the assumption crude oil prices will be higher and production cut short with a higher proportion of radical militants in power within OPEC.

Of course, with the two recent oil discoveries (the one codenamed "Jack" in the Gulf of Mexico, which is so large, it could increase our national reserve by 50%, and the other discovered in the Dead Sea within Israeli territory), this has got OPEC quaking in their boots, and probably leaning towards another war with Israel and our other allies.

It's rather pathetic, though, because between China's major industrial build up, they're taking practically all of the resources the rest of the industrialized world needs. It's predicted there will be a concrete shortage by 2040, the way China is trying to build up it's plant, property, and equipment.

One thing in our favor, though, is the fact America doesn't wholly rely on OPEC for oil. Instead, our domestic oil production firms (such as Kerr-McGee-not that I'm advertising for them, but their commercials have been more prominent on television within the last year) primarily rely on deep sea oil platforms in the Atlantic and Pacific.

I know California can be pretty brutal with gas prices (I was up at Lake Tahoe during the summer of 2005, when gas was $3.45 a gallon at the same station I remember my grandfather filling up at ten years ago, when it was $1.16). However, before everyone starts crying "foul" on the gas companies, like that bonehead Bill O'Reilly (he's okay for being moderate, but way too liberal for my tastes), you have to consider how unprofitable it would be for the local gas stations to have wildly varying gas prices.

While they get close to collusion, the service stations have to operate within a very small variance of the mean average price of unleaded within your local area. If they go too high, they lose business to everyone else, but if they go too low, they can't cover operating expenses. If you check Bloomberg.com, you can see the NY future price of gasoline, which is around $1.53 a gallon AT COST.

Consider a standardized price of $2.30 a gallon, and that's a cost to sales ratio of 66 percent, which is just for the fuel itself. Throw in the cost of shipping (this is why it's cheaper at gas stations along interstates and along highway corridors in cities-it's cheaper and easier to get tanker trucks to the stations), variable expenses, fixed expenses (S&A, rent, utilities), and overhead which is partially capitalized, and you can see the service stations AREN'T trying to rip us off!

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