-- more on -- Price of Gasoline

[Dave Farber <dave () farber net>]

> Date: Mon, 25 Aug 2003 15:32:34 -0400
> From: Robert Lee <robertslee () comcast net>
> Subject: RE: [IP] Price of Gasoline
> To: dave () farber net
>
> A total rip off.  People of good faith and brains who don’t believe that are
> too close or have lived with the nonsense for so long that it seems
> reasonable.
>
> Here is the proof.  1974.  Post first Carter era gas crisis.  Gas prices
> shoot up, then start down as use diminishes (ECON 101).  ARCO (showing my
> age) suddenly raises prices.  The ARCO VP of something or other is
> interviewed on radio and says, "Due to a lack of demand, and a consequent
> diminution of revenues, ARCO had to raise prices."  That is also ECON 101.
> It is behavior that is only possible with monopoly power.  I remember
> pulling my car over at Greenwood and Glenside Avenues, in amazement.
>
> The only exceptions are monopolies, including governments.  Philadelphia
> keeps losing its tax base so it raises taxes.
>
> The only saving grace is that ultimately you wind up with a Declaration of
> Independence.  The Declaration from Philadelphia is written in the hills of
> Conshohocken (which are still there, just under the dozen and half office
> buildings).
>
> Robert Lee
> Encoda
> Office  610-397-1632
> Home  610-642-9707
> Cell     610-724-1288
>
>
> -----Original Message-----
> From: owner-ip () v2 listbox com [mailto:owner-ip () v2 listbox com] On Behalf Of
> Dave Farber
> Sent: Monday, August 25, 2003 2:34 PM
> To: ip () v2 listbox com
> Subject: [IP] Price of Gasoline
>
> Still sounds like a rip off to me djf
>
>
> >Date: Mon, 25 Aug 2003 13:16:04 -0500
> >From: "Stephen D. Poe" <sdpoe@acm.o
>
>
>
> >To: Dave Farber <dave () farber net>
> >
> >Dave -
> >
> >A couple of days ago you asked about the price hike. I've found a couple
> >of items that might be of interest.
> >
> >U.S. Gas Prices Make Record Jump
> >Mon Aug 25, 8:42 AM ET
> >
> >CAMARILLO, Calif. - Supply shortages pushed average retail gasoline prices
> >up more than 15 cents a gallon nationally during the past two weeks, the
> >largest retail price hike on record since the Lundberg Survey began
> >keeping records 50 years ago.
> >...snipped...
> >Temporary refinery shutdowns caused by the massive East Coast/Midwest
> >blackout combined with a break in a major pipeline in Arizona to cause the
> >supply disruptions, Lundberg said.
> >
> >However, the reopening of the pipeline and the end of the blackout means
> >gas prices should fall thanks to the traditional decline in demand in
> >September and an influx of imported gasoline attracted by the current high
> >prices, she said.
> >
> >Background
> >----------
> >"Why Do Gasoline Prices Fluctuate?"
> >"Good weather and vacations cause U.S. summer gasoline demand to average
> >about 6% higher than during the rest of the year. If crude oil prices
> >remain unchanged, gasoline prices would typically increase by 5-6 cents
> >during the summer."
> >...
> >"If demand rises quickly or supply declines unexpectedly due to refinery
> >production problems or lagging imports, gasoline inventories (stocks) may
> >decline rapidly. When stocks are low and falling, some wholesalers become
> >concerned that supplies may not be adequate over the short term and bid
> >higher for available product. Such was the case in late summer 1997, as a
> >demand surge drained gasoline stocks and prices rose rapidly."
> >-
> >http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_o
> n_gasoline_prices/html/petbro.html
> >
> >Gasoline & Diesel Fule Update -
> >http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp
> >
> >Weekly US Retail Gasoline Prices -
> >http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_
> page.html
> >
> >A US DoE estimate from earlier this summer:
> >"Short-Term Energy Outlook April 2003
> >Summer 2003 Motor Gasoline Outlook
> >Summary
> >For the upcoming summer season (April to September 2003), high crude oil
> >costs and other factors are expected to yield average retail motor
> >gasoline prices higher than those of last year. Current crude oil prices
> >reflect a substantial uncertainty premium due to concerns about the
> >current conflict in the Persian Gulf, lingering questions about whether
> >Venezuelan oil production will recover to near pre-strike levels in time
> >for the peak driving season, and the impact of recent disruptions in
> >Nigerian oil output. Moreover, unusually low crude oil and gasoline
> >inventory levels at the outset of the driving season are expected to keep
> >prices high throughout much of the summer and declines from current high
> >levels are likely to be constrained.
> >·  Retail gasoline prices (regular grade) are expected to average $1.56
> >per gallon, 17 cents per gallon higher than last summer’s average and
> >slightly above the average in the summers of 2000 and 2001. Because of the
> >uncertainty surrounding the crude oil market and the domestic
> >refining/distribution system, even if no new disruptions to crude oil and
> >gasoline supply occur, a 95 percent confidence range extends as much as 16
> >cents per gallon to either side of the baseline forecast during the
> >upcoming driving season. New disruptions could result in prices above the
> >baseline forecast while definitive resolutions of current problems could
> >result in prices lower than the baseline forecast. Although we expect
> >prices to retreat slowly after nearing the previous nominal monthly
> >average record of $1.69 per gallon in March, there remains a significant
> >probability that gasoline prices could be above those of the baseline
> >projection. It should be noted that the projected (baseline) average
> >summer gasoline price, when adjusted for inflation, is still well below
> >the record reached during the summer of 1980 (about $2.77 per gallon in
> >year 2003 dollars).
> >·  Gasoline Demand is projected to average 9.18 million barrels per day, a
> >new record, up 150,000 barrels per day, or 1.6 percent, from last summer.
> >The growth comes amid the gradual acceleration of the U.S. economy out of
> >the 2001-02 recession despite the higher retail prices.
> >·  Total beginning of season motor gasoline stocks are estimated at 200
> >million barrels, 13 million barrels below those at the same time last
> >year. They are projected to rise to 201 million barrels at the end of the
> >season. Inventory changes are therefore not expected to make a net
> >contribution to this summer’s gasoline supply, resulting in an even higher
> >reliance on imported sources than in previous summers."
> >- http://www.eia.doe.gov/emeu/steo/pub/sum-outlook.pdf
>
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