price of oil..

cappedup · Post by **cappedup** » Wed, 10. Sep 08, 00:08

http://news.bbc.co.uk/1/hi/business/7605584.stm

So the price of oil has fallen below $100 a barrel.. why is it that when it rises the price of Deisel for my van risies within a micro second, when it falls nothing happens?

We take the hit of rising fuel prices, moan for a bit (we are good at that) then just get on with it, accepting its a world problem.. then, when things change which should be for the better for the average Joe but nothing happens, we sit politely in line paying through the nose for something that should fall in price..

Am i missing something here?

Dave500 · Post by **Dave500** » Wed, 10. Sep 08, 00:22

That's just one of their mechanisms for increasing profitsss.

The same thing happens with interest rates.

The price will come down eventually as long as the pound still has some value, then the government will increase the duty to make up for the shortfall in VAT that they are now getting and call it a "green" tax.

Apollo911 · Post by **Apollo911** » Wed, 10. Sep 08, 00:35

Oil companies have learned people will pay the higher prices for fuel, so why should they drop them, they can make more profit now.

(Actually, petrol prices have dropped by about 10 whole pence near me over the last few weeks.)

Dave500 · Post by **Dave500** » Wed, 10. Sep 08, 00:44

Apollo911 wrote:(Actually, petrol prices have dropped by about 10 whole pence near me over the last few weeks.)

Now wait for the Brown/Darling hike in duty.

Al · Post by Al » Wed, 10. Sep 08, 00:45

I've been thinking the same recently and boring the hell out the wife going on about it. Its behaviour like this thats going to see the oil companies get hit by a windfall tax and tbfh they deserve all they get. We have to buy fuel and they know it. w***kers

Aro · Post by **Aro** » Wed, 10. Sep 08, 00:46

If you buy your stock of energy for 16 credits then go off to that station that was buying it for 20, then some guy beat you there and now they want it for 13... all the stations around will only pay 12-14 you gotta sell off that stock at even or for a profit...

Why did I write that out?

Anyway, their stock at a higher price needs to be sold before they can obtain and sell the cheaper stuff. *cough* It's also fun to live in an oil producing area and normally pay more than what it's being exported for.

ewokshaman1 · Post by **ewokshaman1** » Wed, 10. Sep 08, 00:53

Also, the price of fuel is dictated not only by the price of crude at the time, but the refineries, the distance of exportation, the shipping... You can't just blame the price of rich crude. For instance, in the US when hurricane katrina hit, there was a massive Jump in fuel costs, why? Not because the evil fuel conglomerates were sitting in their offices rubbing their hands together and cackeling, but because new Orleans was a very important part of the process, because it had man oil refineries located there, when they were destroyed by the hurricane, the oil had fewer places to be refined, and thus jumped in price.

Dave500 · Post by **Dave500** » Wed, 10. Sep 08, 00:57

Aro wrote: It's also fun to live in an oil producing area and normally pay more than what it's being exported for.

Here too. The same can be said for the price of whisky (scotch). Generally cheaper elsewhere than it is in UK.

Rapier · Post by **Rapier** » Wed, 10. Sep 08, 01:16

I think it also has something to do with the way crude is sold. It may be below $100 a barrel if bought today, but it's then go to get through the system before it reaches the pumps. The fuel in the pumps today was probably bought/sold as crude several weeks ago, when the price was higher. I've no idea what the actual lag in the system is though.

Scarecrow · Post by **Scarecrow** » Wed, 10. Sep 08, 03:29

The lag is about a month here in the States.

Tsar_of_Cows · Post by **Tsar_of_Cows** » Wed, 10. Sep 08, 05:28

Rapier wrote:I think it also has something to do with the way crude is sold. It may be below $100 a barrel if bought today, but it's then go to get through the system before it reaches the pumps. The fuel in the pumps today was probably bought/sold as crude several weeks ago, when the price was higher. I've no idea what the actual lag in the system is though.

Bingo, the barrels being traded now for under $100 will have to be transported, refined, and transported again before it goes into our cars. All the moving about will take time, and it'll probably sit around for a little while waiting to be shipped, waiting to be refined, and then waiting until they figure out where it's going.

Plus the fact that the oil companies are practically gushing cash at the moment, so I expect it's a little of both.

The_Abyss · Post by **The_Abyss** » Wed, 10. Sep 08, 07:47

The lag is around 6 weeks in the UK, however the cst of diesel rises with demand as the weather cools for winter, so this may slow the decline a little.

I wouldsn't criticise the oil companies too much (for this topic anyway). The tax on their profits and the dividends they pay are pretty much propping up the nation's revenue and our own pension funds at the moment.

pjknibbs · Post by **pjknibbs** » Wed, 10. Sep 08, 08:41

Rapier wrote:I think it also has something to do with the way crude is sold. It may be below $100 a barrel if bought today, but it's then go to get through the system before it reaches the pumps.

However, as cappedup pointed out, there never seems to be an equivalent lag when fuel prices are going UP...

Rapier · Post by **Rapier** » Wed, 10. Sep 08, 09:49

A quick Google found this with a nice, if a little out of date, graph of Petro and Oil prices. This shows about a months lag in the petrol price. There is also this piece from the Mail that eventually finds some balance. In adition to what's been mentioned here, it also points out the pound has fallen against the dollar over the same period as oil has been fallingl so though the fall in the price of crude has fallen by about 25% in $, it's only fallen by about 10-15% in £. It also make the point that changes can be local. What I really want to see are the food prices falling...

BugMeister · Post by **BugMeister** » Wed, 10. Sep 08, 10:27

The_Abyss wrote:The lag is around 6 weeks in the UK, however the cst of diesel rises with demand as the weather cools for winter, so this may slow the decline a little.

I wouldsn't criticise the oil companies too much (for this topic anyway). The tax on their profits and the dividends they pay are pretty much propping up the nation's revenue and our own pension funds at the moment.

- and funding Bush's wasteful anti-terrorist "adventure"..

The_Abyss · Post by **The_Abyss** » Wed, 10. Sep 08, 19:52

Rapier wrote:What I really want to see are the food prices falling...

Grow your own! We've had huge fun this year, and are still harvesting beans and spuds, as well as some salad and chard.

Rapier · Post by **Rapier** » Wed, 10. Sep 08, 20:01

Not so easy moving into a new house mid year. I've got one crop of celariac in to show willing. I'm wondering what I can farm for meat on such a small plot. I've been considering guinea pigs, but people in the UK seem to consider them as pets rather than food.

The_Abyss · Post by **The_Abyss** » Wed, 10. Sep 08, 20:07

That's rather interesting! I suppose it also has the added benefit of the guinea pigs attracting larger predators, and then you could get them too.

pjknibbs · Post by **pjknibbs** » Wed, 10. Sep 08, 22:14

Rapier wrote:I've been considering guinea pigs, but people in the UK seem to consider them as pets rather than food.

So? Same applies to rabbits, doesn't stop people eating rabbit meat!

The_Abyss · Post by **The_Abyss** » Thu, 11. Sep 08, 00:10

I regularly shoot wild rabbits and eat them. Trouble is, there are not many guinea pigs wandering around next to them...

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price of oil..

price of oil..