Gas prices [ADMIN WARNING: NO POLITICS]

[Gregs24]

The core problem is the U.S. outsourced much of production to counties that have heavy energy reliance upon middle east shipping routes. Only recently have things began to slowly change but it will take decades to unravel and replace the decades of displacement that preceded. In the US, lets say Texas, gas prices are rising simply because they can-as the market trade rate of oil barrels rises due to global slowdown in production. Desert Storm/Shield was about 6 months long, Afghanistan OEF/FS was about 20 years total, and Iraqi Freedom was about 9 years long. So anyone's guess how long the current operation Epic Fury will last. I predict elevated gas prices for a month or two while markets price in the new costs. All my cars drink premium and it was about $4.29/G vs maybe $3.50 a few weeks back. So an extra $25 to fill up the truck, yeah I notice but its not hurting yet. Obviously folks who are on tighter budgets or small business for transport that matters more...if it got to Europe prices...which I think is about ~$7.50 or so right now then I think things would go bad real quick. Hope that doesn't happen.

UK standard unleaded (95RON) was about £6.55 per US gallon 3 weeks ago. Now varies between £7.00 and £8.50 per US gallon depending on site. Some of this is because of having to buy at spot prices rather than in advance but also there will be some price gouging going on. Bigger chains buy in advance so at the moment can sell cheaper however that will not last.

France is about the same as the UK once converted as well

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[Gregs24]

So as to who is 'in control' in Hormuz. Ships are passing with agreement of the Iranian government near to the Iranian coast from countries such as India, China and Iran itself.

 

[Zig]

So as to who is 'in control' in Hormuz. Ships are passing with agreement of the Iranian government near to the Iranian coast from countries such as India, China and Iran itself.

A blockage is easy in a strait.

 

[smurfslayer]

I wonder if they're running out of large targets to hit and are using smaller assets like fighters and A-10s.

We need some more Ayatollahs to slay.

I predict elevated gas prices for a month or two while markets price in the new costs. All my cars drink premium and it was about $4.29/G vs maybe $3.50 a few weeks back. So an extra $25 to fill up the truck, yeah I notice but its not hurting yet. Obviously folks who are on tighter budgets or small business for transport that matters more...if it got to Europe prices...which I think is about ~$7.50 or so right now then I think things would go bad real quick. Hope that doesn't happen.

I paid $2.90 / gallon for 93 from QT before this started and it's now about $4.30 locally, and a shop hard, travel far to score that last penny per gallon it's around $4.10 and ditto, both cars and truck run super, and both my bikes are 91+ octane. As from '20 - '24, once the high price of diesel sets in, everything that ships in commerce becomes more expensive.

I think your 1-2 month "shock price" period is probably right and then the price should trickle down penny by penny. Unless it goes boots on the ground.

ETA: Here's another article touching on the disconnect between the US gas prices and the oil futures panic market.
https://www.msn.com/en-us/money/mar...f-hormuz-so-why-are-gas-prices-up/ar-AA1YQL4i

 

[Neggytive]

well I just paid $4.699 USD for 93 Octane no ethanol fuel here in SW Florida.

Anytime someone passes gas in the Middle East the price of oil goes up followed in very short order by price increases in gasoline, diesel, and anything that has a connection to oil such as plastics, tires, food, etc etc etc.

The world runs on hydrocarbons and the supply and demand curves predict what happens when supply is disrupted or on the futures markets what investors think is going to happen at some point down the road.

 

[Skye]

My current thoughts on prices (higher), with two examples. Something I'd like to be proven wrong about.

52M people waking up in South Korea read that the Ras Laffan, Qatar, complex was struck overnight, with damage assessments on-going. Now, the South Pars complex, Iran, could possibly destroyed. Bulk transport traffic traversing that area is a fraction what it has been.

South Koreans need oil, gas and other products to cook dinner, fly jets and keep factories running. There's the quantifiable loss of product from shipping lanes being closed and the fields being damaged. There's the unquantifiables of what happens when those supplies are disrupted further for an undetermined amount of time.

If there were formal purchase agreements previously in-place, they've since been tossed. Insurance carriers will not offer coverage through an active war zone. Shippers cannot order their employees to risk their lives to deliver products. Owners will not accept their ships being destroyed.

People, companies and GOV offices buy what's on offer in both the spot and futures markets. It's an open auction, capitalist system. They're competing with 8B others to secure product from other sources. Failure is not an option. They're willing to pay a higher price. Someone else has to pay higher still or go without.

In New York, debt traders wake to read the request for an additional $200B to cover the costs of the war. The Administration has a goal to spend $1.5T on defense by 2027, a 50% increase from today. It was announced 24 hours ago the national debt is now $39T and will be $40T by the fall.

People buying and selling debt realize that makes it a bit more difficult for the GOV to continue with its existing fiscal policies. Taxes might have to be raised, spending cut, or a combination of the two. Whatever happens, the end result will be lower economic output. Monies previously spent throughout the economy, now, are used to pay down debt.

Traders bid with a lower price than before. Buyers aren't willing to purchase the same product that now holds a lesser value or greater risk. The GOV takes what the markets offer, the buyer receiving a higher yield, the GOV receiving less money, with interest rates now biased up. Anyone needing a loan has to compete with what the GOV is willing to pay to succeed. They'll have to pay a higher rate as a result.

No matter the war's outcome, facilities will have to be rebuilt, weapons caches re-supplied and shipping lanes re-calculated, all of which put pressure on the upside of people needing more of something, the end result being greater inflation. This, on top of other, on-going events, from the rebuilding of Southern California, to AI Data Centers and power plants, to the War in Ukraine. People, money, construction and transportation equipment, raw materials or completed products, whatever. Everything will be moving higher in price.

 

[Zig]

My current thoughts on where prices are going from here. And why. Something I'd like to be proven wrong on.

52M people waking up in South Korea read that the Ras Laffan, Qatar, complex was struck overnight, with damage assessments on-going. Now, the South Pars complex, Iran, could possibly destroyed. Bulk transport traffic traversing that area is a fraction what it has been.

South Koreans need oil, gas and other products to cook dinner, fly jets and keep factories running. There's the quantifiable loss of product from shipping lanes being closed and the fields being damaged. There's the unquantifiables of what happens when those supplies are disrupted further for an undetermined amount of time.

If there were formal purchase agreements previously in-place, they've since been tossed. Insurance carriers will not offer coverage through an active war zone. Shippers cannot order their employees to risk their lives to deliver products. Owners will not accept their ships being destroyed.

People, companies and GOV offices buy what's on offer in both the spot and futures markets. It's an open auction, capitalist system. They're competing with 8B others to secure product from other sources. Failure is not an option. They're willing to pay a higher price. Someone else has to pay higher still or go without.

In New York, debt traders wake to read the request for an additional $200B to cover the costs of the war. The Administration has a goal to spend $1.5T on defense by 2027, a 50% increase from today. It was announced 24 hours ago the national debt is now $39T and will be $40T by the fall.

People buying and selling debt realize that makes it a bit more difficult for the GOV to continue with its existing fiscal policies. Taxes might have to be raised, spending cut, or a combination of the two. Whatever happens, the end result will be lower economic output. Monies previously spent throughout the economy, now, are used to pay down debt.

Traders bid with a lower price than before. Buyers aren't willing to purchase the same product that now holds a lesser value or greater risk. The GOV takes what the markets offer, the buyer receiving a higher yield, the GOV receiving less money, with interest rates now biased up. Anyone needing a loan has to compete with what the GOV is willing to pay to succeed. They'll have to pay a higher rate as a result.

No matter the war's outcome, facilities will have to be rebuilt, weapons caches re-supplied and shipping lanes re-calculated, all of which put pressure on the upside of people needing more of something, the end result being greater inflation. This, on top of other, on-going events from the rebuilding of Southern California to AI Data Centers and power plants to the War in Ukraine. People, money, construction and transportation equipment, raw and unfinished materials, whatever. Everything will be moving higher in price.

If we’re heading to spain, around the horn and from Houston is ‘round ‘bout the same.

 

[jboogie1289]

My current thoughts on where prices are going from here. And why. Something I'd like to be proven wrong on.

52M people waking up in South Korea read that the Ras Laffan, Qatar, complex was struck overnight, with damage assessments on-going. Now, the South Pars complex, Iran, could possibly destroyed. Bulk transport traffic traversing that area is a fraction what it has been.

South Koreans need oil, gas and other products to cook dinner, fly jets and keep factories running. There's the quantifiable loss of product from shipping lanes being closed and the fields being damaged. There's the unquantifiables of what happens when those supplies are disrupted further for an undetermined amount of time.

If there were formal purchase agreements previously in-place, they've since been tossed. Insurance carriers will not offer coverage through an active war zone. Shippers cannot order their employees to risk their lives to deliver products. Owners will not accept their ships being destroyed.

People, companies and GOV offices buy what's on offer in both the spot and futures markets. It's an open auction, capitalist system. They're competing with 8B others to secure product from other sources. Failure is not an option. They're willing to pay a higher price. Someone else has to pay higher still or go without.

In New York, debt traders wake to read the request for an additional $200B to cover the costs of the war. The Administration has a goal to spend $1.5T on defense by 2027, a 50% increase from today. It was announced 24 hours ago the national debt is now $39T and will be $40T by the fall.

People buying and selling debt realize that makes it a bit more difficult for the GOV to continue with its existing fiscal policies. Taxes might have to be raised, spending cut, or a combination of the two. Whatever happens, the end result will be lower economic output. Monies previously spent throughout the economy, now, are used to pay down debt.

Traders bid with a lower price than before. Buyers aren't willing to purchase the same product that now holds a lesser value or greater risk. The GOV takes what the markets offer, the buyer receiving a higher yield, the GOV receiving less money, with interest rates now biased up. Anyone needing a loan has to compete with what the GOV is willing to pay to succeed. They'll have to pay a higher rate as a result.

No matter the war's outcome, facilities will have to be rebuilt, weapons caches re-supplied and shipping lanes re-calculated, all of which put pressure on the upside of people needing more of something, the end result being greater inflation. This, on top of other, on-going events from the rebuilding of Southern California to AI Data Centers and power plants to the War in Ukraine. People, money, construction and transportation equipment, raw and unfinished materials, whatever. Everything will be moving higher in price.

Thank you for this because it really should make us think. We‘re not the only ones who are casualties of this “War” but yet we will all feel it in the same or near same way. Some will feel it worse than others but we’re all impacted one way or another and as you said or implied, this is Far From Over!!

 

[Walter]

i Agree, lets get back to Mustang stuff. Cruising, great topic. There is something about the acceleration and sound from 2nd gear into 3rd that blocks the world out and reminds you of why you own your choice of vehicle. Secondly remind yourself that you are in a country where you can actually do it without fear. Many can’t.

 

[keithwalton]

Interesting that you say US prices went up during covid, in the UK they went way down due to excess supply and no demand. At times fuel was being sold at a loss because tankers were arriving at ports and the fuel had to be moved on.
I remember when it dropped under £1/l for the first time since 2008.

I'm glad Gregs has come around to the idea that price gouging is going on ... spot pricing is one thing, but a station changing its price (up) 3-4 times a day suggests it's more dynamically priced on demand rather than supply cost.

Eg on thursday the previously mentioned expensive place (ESSO main station), was £1.689 in the morning, £1.649 at lunch time, £1.769 in the afternoon, £1.729 by the evening.
They would self report the lower prices (and it appears on petrol prices) which they gets user / fuel finder corrected when someone else updates it for them.

Amusingly the other place around the corner stayed at £1.539 all along. and is usually supplied by .. Esso

 

[Gregs24]

i Agree, lets get back to Mustang stuff. Cruising, great topic. There is something about the acceleration and sound from 2nd gear into 3rd that blocks the world out and reminds you of why you own your choice of vehicle. Secondly remind yourself that you are in a country where you can actually do it without fear. Many can’t.

There are plenty of threads for that - this isn't one of them!

 

[Gregs24]

Interesting that you say US prices went up during covid, in the UK they went way down due to excess supply and no demand. At times fuel was being sold at a loss because tankers were arriving at ports and the fuel had to be moved on.
I remember when it dropped under £1/l for the first time since 2008.

I'm glad Gregs has come around to the idea that price gouging is going on ... spot pricing is one thing, but a station changing its price (up) 3-4 times a day suggests it's more dynamically priced on demand rather than supply cost.

Eg on thursday the previously mentioned expensive place (ESSO main station), was £1.689 in the morning, £1.649 at lunch time, £1.769 in the afternoon, £1.729 by the evening.
They would self report the lower prices (and it appears on petrol prices) which they gets user / fuel finder corrected when someone else updates it for them.

Amusingly the other place around the corner stayed at £1.539 all along. and is usually supplied by .. Esso

Of course the UK mandatory price information in real time really helps UK consumers choose where to buy their fuel. Even better Sync 4 has that information built in on the maps with real time fuel prices.

Certainly around here in the South West prices have not changed that much if you look at the cheapest option. It has probably gone up by about 5p to 8p a litre from pre-war for 95RON, however some stations have gone up by 20p or more. Certainly pays to shop around.

 

[Walter]

[QUOT="Gregs24, post: 3491114, member: 36781"]
There are plenty of threads for that - this isn't one of them!
[/QUOTE]

There are plenty of threads for that - this isn't one of them!

sorry ol chap

 

[Gregs24]

Just checked and within my local area (10 miles) the cheapest 95RON unleaded is £1.40/l and the most expensive £1.51/l. Quite a big difference.

 

[AZ_Ryan]

Arizona is now number 1 gas in gas pricing increase at 37.8% over the last year. The average is now $4.70 a gallon for regular and $6.04 for diesel. Glad to see the "panic buying" is subsiding.

https://azbigmedia.com/business/arizona-ranks-no-1-for-higher-gas-prices/

And now we have two aircraft shot down and a missing crew member in Iran even though we were told "Iran’s anti-aircraft equipment was "totally eliminated" and its radar "100% annihilated"

The people that still think this is going to be over soon and gas prices will magically fall in a week or two are delusional.

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