Gas tank full today?

[Azure]

Originally Posted by Dion

Why not increase the price after shortage occurs as opposed to before it happens.

Increase the price of what? Gas you don't have to sell?

[Dion]

Originally Posted by Azure

Increase the price of what? Gas you don't have to sell?

Increase the price of the next shipment that comes in.

[Azure]

Originally Posted by Dion

Increase the price of the next shipment that comes in.

Provided there is one.

The 'shortage' might have something to do with it.

EDIT: Unless you mean the next shipment regardless, well, it would be kinda stupid to raise the prices next time around when most other stations have lowered theirs already.

[Dion]

Originally Posted by Azure

Provided there is one.

The 'shortage' might have something to do with it.

When those refineries start running again there will still be a 'shortage' as they try to get all stations quotas filled. It will take 'time' to get them all up and running.

EDIT: Unless you mean the next shipment regardless, well, it would be kinda stupid to raise the prices next time around when most other stations have lowered theirs already.

Distributors set the retail prices of all stations under thier ownership. The prices will be uniform once the storm is over, and when supply returns to pre storm levels, prices will then drop in to previous levels.

[GGG]

Did Ike damage the refineries or will gas drop in the next few days

[Cowboy89]

Originally Posted by Slava

In reference to a few of you wanting me to elaborate on why its a scam. Plain and simple when the price of gas was dropping we heard all about how its a futures market and you have to wait for the cheaper gas to make it through the system.

Of course that doesn't apply here though....I mean sure the company paid for the gas a month ago, and the hurricane that shuts things down is today, but the company couldn't possibly sell based on their buying price?

Last night on the news Michael Irvin was trying to justify this one as well. His comment was that due to the increased prices it would be impossible for the oil companies to sell for cheaper.

btw, the comment about stock prices is not even in the same realm (unless you mean to suggest that some stocks are off the mark with their values...because that is in direct correlation here).

In any event I think that the oil industry is pulling the wool over our eyes in a number of ways. I still have no idea how they can never predict supply and demand correctly despite years and years of running their industry. I also have no idea why the "driving season" catches them off guard every year, and on a consistent basis. We know that people are going to drive more, yet every year the refining capacity is not enough...go figure.

Driving season catches them off guard because there has not been excess capacity for years now. During "driving season" petroleum product stocks get ravaged and they cannot replenish them in time for the next season because there simply is not enough refining capacity. Building a new refinery or expanding a refinery takes years, and the economics on such only has made sense recently. Currently there is many plans for expansions in the works, but this cannot alleviate demand right now. Oil and gas is no more of a scam than anything else as they charge what the market will bear. No different from Sport Chek's prices on shoes. They don't owe you gasoline at cost, just like any other business doesn't owe you anything at their input cost either. The price of goods and services is the meeting of supply and demand and not refiners cost plus margin. If they can do it significantly cheaper than the input price it's just called good business.

As for anticipated supply shocks and why the price goes up before a hurricane as opposed to after. Once again using the stock price example, in the name of "fairness" would you sell a gold mining stock with producing assets in Canada at the same price as a week earlier after finding out information that there would be a significant chance that materially significant gold supplies would come off stream elsewhere? Of course you wouldn't and its the same thing you would be asking gasoline retailers in Canada to do.

And BTW the stock example does apply because new information can change the price outlook for stocks. When Hurricane Ike was in the middle of the Atlantic the chances of it disrupting refinery row in Texas was much lower than when it was in the gulf and on their doorstep. Gasoline commodity prices adjusted accordingly to projected Ike landfall forecasts. If the refineries are out for a significant amount of time then prices will increase even more, because the price you paid on Friday included the possibility of a scenario where they would not be down for too long. If it plays out that there's a major supply disruption then prices will be even higher.

[Draug]

I was in Sundre today, and gas was $1.299. Here, in Calgary, right across the street, its $1.399. What gives?

It seems to me that Calgarians are getting screwed.

[Sylvanfan]

I went down accross the line to Oroville Washington today and their prices didn't spike up on Friday like ours did in Osoyoos. The funny thing was that on Thursday the price came down 2 cents a liter only to go back up by 12 on Friday. Yet down in the US...the prices are the same. Even with our dollar being a bit weaker right now, it's still 35 cents a litre less to buy my gas in the US based on todays price. When the two currencies where equal it was usually in the 20-25 cent range.

[shane_c]

We jumped up to $1.431 on Saturday. It will be interesting to see what it goes down to since I don't believe there was damage to the refineries and since last I heard a barrel of oil was under $100. I'm guessing it won't go down to pre-Ike levels even though it should be less than that given it was $1.32 for a long time despite oil prices continually falling.

[KevanGuy]

I'm watching time shift here from Newfoundland and they just said on a News Break that gas in some place in Labrador hit $1.60L.

[Dion]

Originally Posted by Draug

I was in Sundre today, and gas was $1.299. Here, in Calgary, right across the street, its $1.399. What gives?

It seems to me that Calgarians are getting screwed.

It's $1.38 here in High River.

[Flames in 07]

Originally Posted by Dion

I agree with much of what you are saying. You would think Oil companies would be building more refineries. Then again more refineries means greater supply and less profit for these guys.

If they were profitable people would build more. Problem is that enviromentalists and regulators hate new refineries.

I remember that Richard branson guy was in Canada few years ago saying how he plans to build a refinery in N america, haven't heard from him since.

It's a free market Dion, if they make so much money, nothing is stopping anyone from building one if they are so profitable. The fact is they have done well the past couple years, but overall refining business has been quite poor.

[Flames in 07]

Originally Posted by Dion

I find that hard to believe. I heard yesterday that gasoline supplies are at a 8 year low. Correct me if i'm wrong btw. Logic would dictate that if you have more refineries up and running they could increase they supply of gasoline.

That was me. It showed that refining in the last few months has been a poor business to be in, because at $130 WTI demand for oil products goes down, therefore everyone had to turn back rates. Which was the case for a small part in Canada but to a large part in the US. It was from the eia.

[Flames in 07]

People are wondering what the impacts of Ike are, well some producing capacity was shut in temorarily, however a larger impact is that a number of refineries turned down. Most made it through ok sans a few with no power and a smaller few that are a little underwater. Most will come back in the next several days but no refineries means no demand for crude which means WTI goes down and oil products goes up. A unique market scenario as everyone always sees a positive relationship of WTI to gasoline ... which is true most of the time.

[Flames in 07]

Originally Posted by Azure

I don't know the specifics. Flames07 could elaborate I think.

yea inventories are low, but the big thing going into the weekend accross the continent is that nobody knew if Ike would be a big deal or not, so in anticipation they curbed demand ... essentially to those who demand it more.

But as I learned today a large retailer had some kind of distribution problem over the weekend where gasoline wasn't getting trucked to retail sites ... not sure if it was a trucking strike or what, but that probably contributed to pricing in Cgy. But I still think a big datapoint is PCAN going down again in Oct.

[Flames in 07]

One last thing, is that although the conversation has shifted to being quite balanced here which is good, the gasoline retail industry has been likely the most scrutized business in Canada. if there was any shenanigans, it would have been found. Any MP who wants to be PM would be the one to find the smoking gun.

The industry did it to itself imo because no other consumable is priced on every street corner in the nation, which makes consumers unbelievably price sensitive. But overall it is a reasonably complex business, which the media has no interest in correctly portraying. Which is a shame, you have to dig quite deep to get real information if you don't live in the industry.

[Dion]

Originally Posted by Flames in 07

That was me. It showed that refining in the last few months has been a poor business to be in, because at $130 WTI demand for oil products goes down, therefore everyone had to turn back rates. Which was the case for a small part in Canada but to a large part in the US. It was from the eia.

Thanks! I appreciate the explanation.

[Dion]

Originally Posted by Flames in 07

One last thing, is that although the conversation has shifted to being quite balanced here which is good, the gasoline retail industry has been likely the most scrutized business in Canada. if there was any shenanigans, it would have been found. Any MP who wants to be PM would be the one to find the smoking gun.

There was some shenanigans at the retail level earlier this year.

MONTREAL -- The Competition Bureau has charged 13 people and 11 companies -- in what it called a cartel -- with gas-price fixing in four different Quebec cities.

The companies that were charged are: Les Petroles Therrien Inc., operating under the Petro-T banner, and Distributions Petrolieres Therrien Inc. ($179,000), and Ultramar Inc. ($1,850,000). One individual, Jacques Ouellet, an employee of Ultramar, also pleaded guilty and was fined $50,000.

http://www.nationalpost.com/news/story.html?id=583036

[Flames in 07]

http://tonto.eia.doe.gov/dnav/pet/hist/mopueus2m.htm

this is a different survey (I think) but same story.

[Dion]

Originally Posted by Flames in 07

http://tonto.eia.doe.gov/dnav/pet/hist/mopueus2m.htm

this is a different survey (I think) but same story.

Thanks. I'll give it a look see