Crude oil prices v pump price?

Le_Dieux

Heard last week on the radio ( I think it was the Pat Kenny Show) that the price of crude oil dropped by 5%. Yesterday the price of brent crude dropped by $5/barrel. This evening its priced at $101.82/barrel ( taken from http://www.ft.com/cms/s/0/7383d790-c256-11e0-9ede-00144feabdc0.html#axzz1UYf35riX ).

Yet, I haven't seen ANY drop at the pump. WTF is going on here? These bastards are damn quick to up the price when the barrel of crude starts climbing.

Bought diesel this evening at €1.41.9/lt, same price as last week and the week before.

Grrrrrrr

Bullseye1

It's fallen substantially in the past week. Unfortunately oil price drops don't equate to quick price drop at pumps unlike oil price rises which mean immediate hikes at the pump.

Paulw

Crude price drops normally doesn't effect pump prices for a few weeks, depending on crude stocks.

Of course, when prices increase in crude then pump prices go up quickly.

rameire

was listening to last word on today fm yesterday and mr AA said it takes roughly 3 weeks so hopefully in two weeks time you shall see a drop in prices.

maxer68

Le_Dieux wrote: »

Yet, I haven't seen ANY drop at the pump. WTF is going on here? These bastards are damn quick to up the price when the barrel of crude starts climbing.

Bought diesel this evening at €1.41.9/lt, same price as last week and the week before.

Grrrrrrr

Bullseye1 wrote: »

Unfortunately oil price drops don't equate to quick price drop at pumps unlike oil price rises which mean immediate hikes at the pump.

Paulw wrote: »

Of course, when prices increase in crude then pump prices go up quickly.

If anyone can show real proof of this I'll give a prize! - Its your mind playing tricks on you. You will always notice something that affects you negatively more than something that affects you positively. (something to do with part of the human brain)

If you go to www.pumps.ie and check the forecast page (running for about 3 years) its has been tracking and forecasting price rises and drops using the EXACT same methodology and the results are that rises and falls happen within the same timeframe give or take a day.

Based on the current price drops which really only started last Thursday and built up steam on Monday, pump prices will start to fall next monday with the main 6c/8c drop the follwing Monday (2 weeks lag).

Where there is a shorter time lag is when substantial currency movements happen - these feed into the pumps within 3/4 days as fuel is paid for upon discharge at port and once discharged it takes just a couple of days to reach stations.

The good news is the dollar is relatively stable even slightly weaker and oil prices are continuing to drop, so expect about 10c - 12c off a litre within 2 weeks.

and finally - just 50c of your 1.50 for unleaded is the actual oil price, 5c is the refinery cost, 25c is VAT, just on 60c is taxes & duties and a mere 10c is divided between distributor & fuel station.

so a 20% drop in oil price = 10c + vat drop in pump prices and if oil was free, we'd still be paying 90c a litre at the pump.

Le_Dieux

No offense Maxer, but I am not interested in who gets what out of a litre of deisel/petrol.

All I am ranting about is that these bastards are damn quick to up their price when the crude price goes up, but slow as a snail about dropping it.:mad:

the groutch

OP, you're a bit naive with your assumptions.
Do you think that crude oil just magics it's way into petrol pumps overnight?

Wertz

Petrol was down by 2 cent on the M1 applegreen today since sunday for anyone interested.
Maxer has a point...regardless of the price drops on the crude, the taxes piled on top will keep the price artificially high...even a 10-15% drop in crude price won't make a 5% difference at the pump...

dudara

Moved to Economics

dudara

bluesteel

Paulw wrote: »

Crude price drops normally doesn't effect pump prices for a few weeks, depending on crude stocks.

Refined products - Gasoline and Diesel/heating Oil are traded separately. The difference between a barrel of refined product and a barrel of oil is know as the Crack (Chemical process of cracking). Some days the price of oil can go up while the price of gasoline can fall, usually of course they track each other but the crack (think of it as the Refinery's Profit Margin) can swing fairly wildly.
e.g.
http://www.bloomberg.com/news/2011-08-12/europe-s-naphtha-crack-narrows-gasoil-advances-oil-products.html

Prices here: http://www.bloomberg.com/energy/

As has been pointed out it doesn't just magic it's way to pumps overnight... like Crude Oil Gasoline/Heating Oil/Gas Oil trade on futures markets so the distributor may in theory have purchased the fuel years in advance.

Le_Dieux

the groutch wrote: »

OP, you're a bit naive with your assumptions.
Do you think that crude oil just magics it's way into petrol pumps overnight?

Naieve with assumptions TG? The price of a barrel of crude started rising last week, and ALREADY have seen the pump price rise.

Slow to bring their price down, but man they sure break world records when its on the up:eek:

maxer68

Le_Dieux wrote: »

Naieve with assumptions TG? The price of a barrel of crude started rising last week, and ALREADY have seen the pump price rise.

Slow to bring their price down, but man they sure break world records when its on the up:eek:

The barrel price starting rising almsost immediately after falling.
http://www.profitquotes.com/commodities-quotes.mpl?a=detailed&ticker=/BB1V

Prices dropped by about 2c for about 4 days and now they are due to rise even further based on last week's rise to $116.

The drop on thurs/friday was completey eaten up by the substantial drop in the euro so expect €1.55 for unleaded and €1.45 for diesel very soon.

Of course, if you think there's load sof money to be made from the fuel business, there are hundreds of abandoned garages lying about the place available to rent at very cheap money.