price of gas

Scientists and chemists with no ties to oil or farming.

PS – your link stopped working.

I know what futures are. Every stock or commodity is a future. You buy it low and hope to sell it higher in the future. My biggest gripe is $2.00 on monday, $2.50 on thursday, b4 a big weekend. All politicians are crooks. If they weren’t when they were elected, they will be soon after being in office. The oil companies are the crooks I am disgusted with. Yes, I have changed my driving habits. Price is still too high. I will go away now, I can see this going nowhere fun.

big g

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Yepper a big travel weekend. Headed for Winnie for a week and I just see Fleet Farm dropped to $2.54 today. Let’s see 32 gals in the burban and 27 in the boat. I’m happy.

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Awesome…..I love FleetFarm…. $2.54….

For the record gas prices here in MPLs dropped 10 – 12 cents the friday before the Fourth of July weekend, 2006.

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I know what futures are. Every stock or commodity is a future. You buy it low and hope to sell it higher in the future.

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That statement alone confirms that you do not understand the futures market.

-J.

In text, if you say buying stock is not a “future” then I am done debating you. Simple response required only.

big g

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In text, if you say buying stock is not a “future” then I am done debating you. Simple response required only.

big g

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nope.
Stock is not a “future”.

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Scientists and chemists with no ties to oil or farming.

PS – your link stopped working.

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I just saw a guy from OPEC running out of here with it!

check your portfolio.

A future is a contract agreement between you (the supplier) and the buyer.

You agree to deliver a certain amount of product on a specific date to sell to the buyer for a specific dollar amount.

It is a contract with a delivery date.

IF the market goes up, you loose.
IF the market goes down, YOU SCORE HUGE!

I watched farmers sell their corn on a “future” at $2.25/buschel, when the current market was at $4.90 a buschel. All because they had a contract, or “future” that demanded the product be delivered at such date for a locked in price.

I also have seen farmers come up short on their production and have to buy corn on “current” market price of $3.20/buschel to turn around and sell it at $2.90/buschel because they didn’t produce enough corn to meet the required specifications of the contract.

Exactly. If you see in my post, I said every stock and commodity are futures. You just gave a commodity example. A stock is different in that you own part of something that exists today, but could be gone tomorrow or could grow. A commodity has no guaranteed value when you purchase, unlike a stock. There is more risk in a commodity. Anyways I understand what it is. Thats not what this thread is about. It is about higher gas prices, because the oil ocmpanies want even bigger profits.

big g

A futures contract is a legally binding contract to buy or sell a commodity or financial instrument at a certain price at a specified date in the future. Futures markets thrive because they attract two types of traders: hedgers and speculators. Hedgers, such as producers and processors of commodity products, seek to protect against adverse changes in the underlying cash price that may impact their business. Speculators include investors and traders who want to profit from price changes. Speculators accept the price risks and rewards that hedgers wish to avoid. Futures markets provide the forum in which speculators can buy or sell contracts quickly and — just as quickly — exit their positions to react to market changes.

A stock starts when a company wants to raise money to invest in something they think will be profitable such as a new manufacturing process more production capacity or a new product. The company can do this a number of ways but the two most popular are to borrow the money or sell part of the company. Borrowing the money is usually done by issuing a “bond” which is a promise to repay the borrowed money with interest.

The next most popular way for a company to get money is to sell “stock” in the company. This is essentially selling a bit of the company and sometimes it carries a promise of getting a split of the profits when there are profits to split. Stocks are also called “equity” because the owner of the stock has equity or part ownership of the company.

-J.

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Exactly. If you see in my post, I said every stock and commodity are futures. You just gave a commodity example. A stock is different in that you own part of something that exists today, but could be gone tomorrow or could grow. A commodity has no guaranteed value when you purchase, unlike a stock. There is more risk in a commodity. Anyways I understand what it is. Thats not what this thread is about. It is about higher gas prices, because the oil ocmpanies want even bigger profits.

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But you miss the main difference. Futures have no “Expectation” of gained value. Stocks do. In the perfect world, futures purchased for X values would be worth X when the future is delivered. Markets control the price. (Not some oil company exec.)

-J.

Agreed

big g

Ok I talked to one of my buddies tonight down in Kansas who is a roughneck in the oil fields and is an executive mgr in the company. He told me that the government does not have anything to do with the pricing of oil that is opecs department, BUT he said our government has the decision on whether or not to open our own supplies from our ground thus then being able to set the price at a different pace bringing the price of oil down in which would turn around and lower our prices of gas per gallon. He also gave me a scenario which goes like this. Lets say our government recieves 10% tax off every gallon of gas sold at 3.00 a gallon which gives the government near .30 cents a gallon but now if gas was at 2.00 a gallon and the government still only recieved 10% they only get around .20 cents a gallon. So he said now do we all see where the government plays a role in the gas price game?
They are not going to push for us to open our oil supplies here stateside when they are making more money off us buying at higher prices.

I have posted Independent studies in the past and read several. Seems your link is a bit slanted toward the folks that grow the corn. Unfortunately, studies done by indepedent research firms are not quite as postive.

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He also gave me a scenario which goes like this. Lets say our government recieves 10% tax off every gallon of gas sold at 3.00 a gallon which gives the government near .30 cents a gallon but now if gas was at 2.00 a gallon and the government still only recieved 10% they only get around .20 cents a gallon.

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Your friend is incorrect. The federal gas tax is 18.4 cents per gallon. If gas cost $5 a gallon, the feds would still only collect 18.4 cents.

-J.

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Ok I talked to one of my buddies tonight down in Kansas who is a roughneck in the oil fields and is an executive mgr in the company. He told me that the government does not have anything to do with the pricing of oil that is opecs department, BUT he said our government has the decision on whether or not to open our own supplies from our ground thus then being able to set the price at a different pace bringing the price of oil down in which would turn around and lower our prices of gas per gallon. He also gave me a scenario which goes like this. Lets say our government recieves 10% tax off every gallon of gas sold at 3.00 a gallon which gives the government near .30 cents a gallon but now if gas was at 2.00 a gallon and the government still only recieved 10% they only get around .20 cents a gallon. So he said now do we all see where the government plays a role in the gas price game?
They are not going to push for us to open our oil supplies here stateside when they are making more money off us buying at higher prices.

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I believe the Federal gas tax (18.5 cpg) is a flat fee not a percentage and the Minnesota state gas tax (20 cpg) is also a flat fee per gallon, so in Minnesota the state would not benefit from a higher price per gallon, it would actually be hurt because of less consumption.

I do agree that we should start opening up areas to start pumping our own oil.

Jon~
I will call him tomorrow and see where he came up with the percentage over the 18.4 cents per gallon. Cause now I am just all
But I know he said he has so much oil in barrels right now and no buyers for it and there fields are being backed up and there is no reason NOT to lower the prices due to the overwhelming amount of barrels waiting to find there way into the market. Perhaps that is why our prices are coming down and rumor has it we should see them continue dropping over the next month or so as long as we do not have any catastrophies revolving around or near pumps and fields or holding tanks. Let’s keep our fingers crossed and I will get you posted on where he comes up with this percentage cost unless and this is just me in my confused state right now thinking there is something or somewhere somebody is collecting this extra percentage.

Hey;
Do me a favor when you talk to your buddy.

Ask him how the futures work with oil and how it effects the price of gas at the pumps!

Also, ask him if “every” oil company makes money during these high prices, or why we have such high prices!!!

I’m really interested in what he has to say about it!

In fact I am looking at one of his emails right now he sent me this evening it explains how the prices are justified who is in control and how much goes where and what it is then turned around and used for.. I will have a post up in about ten minutes… Sharing the info..

COOL!

My democrate Union brother works for Flint Hills. So, I get all the gist out of how it works. It is crazy the money the companies make, just by purchasing at the “right time and right dollar amount”.

It reminds me of how dad purchase 50,000 bushel of beans on futures. He predicted the market to shoot up. He purchased at $5.50 and sold at $9.00. He never actually held the beans in his hand. It was all buying/selling on contracts…….He wasn’t even tilling ground at the time.

The key factor is that ANYONE can buy these futures, whether it is crop/oil/whatever. A guy can get involved and make money.

Back in 1983, my brother made $35,000 one year in buying/selling futures. He worked for Harvest States at the time. It all sounded great till the next year when he lost about $25,000!!!!

If your crystal ball is clear, you will score HUGE.
If it is cloudy, you will loose the shirt off your back!

Ok this is going to be long but very educational for us all.
First off our biggest problem is refinery, the factories are running at near full capacity producing fuel and with the current demand of fuel the only way to actually bring the cost of fuel down is a couple ways!
First being build more refineries which as he puts it nobody wants them in there backyards. The second is the Government needs to drop the actual gas tax.Which as his last report was stated the government makes anywhere from .90 to 1.15 PER GALLON! Yes it is per gallon!
Most people think that the big oil companies are raking in the big money which is not very true at all, for a study in the 90’s revealed that out of every gallon of gas, the oil companies made pennies on the dollar in profit. The oil companies take a large chunk of the gas price ,but that is mostly eaten up by costs ranging from advertisement,research and development. And I already stated what the government is making off a gallon and it is all profit because the government has no expenditures when it comes to refining oil or fuels. They just tax and watch the money roll in. So in order for us to really see any type of gas price drop the government would HAVE to opt to drop the gas taxes, which if they did cut the gas taxes it would cut the gas per gallon down by a dollar if not a little more as it is now.
But they wont cut the taxes cause it is free money!

Another thing to drop gas prices is to excercise the same choice Clinton opted to use back in the 90’s where he released barrels of oil from the strategic oil reserves, that alone would drop the price of gasoline big time. BUT by doing so would also decrease our oil reserve, meaning we would be stealing from one side to give to the other.
So all in all the only way I see our fuel ever dropping to a price that would be really noticable would for government to drop there taxes on fuel.

Now I am not trying to say he knows everything but when it comes to how the fuel prices and the demand and stocks of oils are and how to retrieve oil from the ground I refer to him as I refer to this site for how to fish where to fish when to fish and what to use to catch the fish.
But as of right now I have a HUGE headache cause I for one don’t keep up with this type of stuff and pay what they charge at the pump and do get a little excited when I drive into town and see the prices drop and get pretty disappointed when I see them jump 20 cents and only come down 5 cents.
But I hope I got some of the answers for you and he also said you can use the power of the internet to find pretty much everything we have all debated here in this post. I for one am just glad the prices are now going in favor of the consumer so lets keep our fingers crossed and hope they continue to do so..

THANK YOU GLENN!!!!!!!!!

The refineries cannot produce anymore and it takes years to build!

Some thought has been to build refineries at old military bases throughout the country, due to most of these closed bases have suffience rail and ALL have interstate highways (which is something Eisenhower pushed and implemented. Interstates were designed to support the military, not for civilian travel.)

Some oil companies have purchased oil on futures correctly, which they are making profits by making the gas. Others have purchased wrong and are “breaking even”.

The primary back up of the refineries is the multiple types of fuel they have to manufacture to comply with EPA regulations for their specific region. An example of this is that a refinery in Chicago area cannot sell gas to Chicago, because it doesn’t make the right “formula”. In order for the refinery to change their formula, it would not be cost effective. Therefore, the refinery doesn’t sell to them, but sells their gas to other places. Chicago has their gas piped in from a different refinery.

Now;
If the EPA and the government could come to a conclusion, such as the military has, it would resolve our problems exclusively! Meaning the military has gone to “One Army, One Fuel” All military vehicles run off of JP8 or JP4, I can’t remember which fuel it is. But what this means is that the military has all diesal vehicles and their tanks and helicopters all run off the same formula of fuel!

Can you imagine the simplicity of this!

Gary~
How true your post is.. Now only if we can make it feasible to start the construction of these refieries on these list of many bases. But as your post states we cannot just build these things over night it is going to take time and money, who is going to part with there money to create these refineries? Should the government be obligated for this construction? I do not know, if it is something for the Big Oil guys to profit more from then, NO! But if the profits are going to be given to the debt of our country then, YES by all means. But if the oil companies are going to flip the bill on the construction of these on government owned facilities as military bases are I hope they don’t just get the land given to them.
But as for an Army of One and a Fule of One, that would be amazing! But all this si for our kids to see, we ourselves will probably never see it. But if we do,then that would be even better. Lets hope something out of all these plans gets into the works and does something for the average working guy.
I was just told our gas stations here in town just dropped another 5 cents we are now under 2.70 a gallon. and I ran up and filled today with a bill of 136.00 trying to beat my towns usual gas hike before a weekend like this. But even if I did buy at this price now I still would have forked out 120.00.

I paid $2.55 in Lakeville this afternoon!

You are so lucky my brother always calls me and tells me his gas prices down in the cities and they are usually about 10 to 15 cents cheaper. Guess that is the price I pay for living in a area with a huge amount of lakes and with all the traffic on the lakes up here especially on a weekend like this these gas stations are not going to drop much more I assume. But then again I did not think they were even going to drop to where they are now..

Not really!
You just got to be aware!

I’ve saw gas prices from $2.55 to $2.69 today, so it is all about where you are at in the cities ( these prices where only 5 miles apart!)

Filled the car up Tuesday in Clinton, Iowa for 2.63 filled the Burb up Thursday at the same station for 2.53 should have had the boat along and filled it too! Maybe find out what it looks like without the cover on this weekend…working a lot of OT lately.