Why is the price for gasoline futures less than the current price of gas?
86348
Gasoline futures are wholesale prices and do not include taxes which are substantial. A future also has to account for storage and inteerst costs.
840409
HI !\nYour problem is called spread. Spread is the difference between bid and ask price. Spread price depends on a brokerage company.\nIf you wan to learn more you may want to check out some course so you wont loose more money. \nI suggest forexonlinecourse.com. And help with your trading check out forexonlinesignals.com.
449895
The simple economic principle of "Supply and Demand". This states that you charge more if it is a more wanted item. If there is a demand of it and a small supply then it is very valuable (like iPods and such) the people will charge you what ever they want because they know you need it. But if there is less demand and doesnt matter how much supply the producers will charge less as a means of selling their item (ie the sales been at store, nobody wants it so they sell it for cheap).\n\nRight now the war is slowing down how much oil can be exported which is making the supply drop. Not to mention that the oil compnies need to turn the crude oil into gasoline which cost money as well.
949639
If pols could control gas prices, it would always be cheap.\nIf oil cos could control prices it would always be expensive.\nWhat can we conclude from this?
368718
Some of the prices are artificially inflated. \n\nHowever, gas prices in the US are still lower than in most countries. Go to Germany or England and pay the equivilant we pay per gallon for a liter. \n\nI do think that many of the companies are taking advantage of teh recoupment of defense oil reserves and the war against terror in order to boost their profits.\n\nOn a final note, though, the war in Iraq was not about oil. If it were, we would be getting oil from Iraq. We are not, yet at least. Much of what excess Iraq is producing is going towards paying their reparations to many countries.
87968
The price of gas changes because the price of oil changes, due to OPEC basically setting the price. Gas companies raise their prices accordingly, based on what they estimate gas will cost in the future (6 months or so), so they have the cash on hand when they need to buy oil to refine into gasoline.
124820
well, actually, crude oil is about 2.5 times more expensive and gas is close to 2 times more, so there is not really that big of a difference as you think
332984
Hmmm...Not really sure.\n\nI know that the "price freeze", if instituted by the government, would only apply to the actual sale of gas.  The price of oil COULD continue to rise (the foreign stuff (a LOT)), which would mean less of a profit for the oil companies, who buy the oil & refine it into gasoline.\n\nI can't exactly aswer your question, but a price freeze may not help.
512284
No, but what helps lower gas prices is when you buy gas from a company that doesn't buy their gas from the middle east. Then, those other stations are forced to lower prices.
328579
My old prediction was that their will be little change in consumption until fuel reaches $7/gallon. After watching the news last week, I'm beginning to think it may be closer to $5/gallon.\n\n$12/gallon would be too high, as the transportation charges would cause a serious blow to the cost of consumer goods and trigger inflation big time.
502628
Not that I am for this--But dear it wouldn't matter and why you ask---well here is an article--this is starting to open up a new can of worms--please understand--Anyone in the world could have all the oil in the world..and it really wouldn't matter at this point...\n\n$3-a-gallon gas: Blame Washington, not Big Oil\nWhat's driving up gas prices? It's not just higher crude costs; it's new regulations.\nNelson D. Schwartz\nMay 3, 2006: 2:20 PM EDT\n\n\n(FORTUNE Magazine) - With gas prices roaring past $3 a gallon and consumer fury rising even faster, Congress and the White House are engaged in a Kabuki-like ritual: pointing fingers at each other over who's to blame, while furiously attacking Big Oil for reaping gargantuan profits - as drivers get hosed at the pump.\n\nIf the politicians really want to figure out who's responsible for the latest round of price increases, though, they'd be better off looking in the mirror. That's because the rise isn't only due to higher crude costs. It's also fallout from some little-noticed provisions in the energy bill passed by Congress and signed into law by President Bush last summer.\n\nBuried in the 551-page energy bill - which was supposed to ease energy shortages, not worsen them - were new regulations governing what additives go into gasoline and how it's refined. Corn-based ethanol is replacing the petroleum-derived additive MTBE, but Congress timed this logistically tricky switchover to occur just as demand for gasoline peaked ahead of the summer driving season - right about now.\n\nThe end result is an extra strain on the refining and distribution system when it can least afford it.\n\n"It's too late now, but Congress has consistently failed to sequence regulatory requirements in a responsible fashion," says Bob Slaughter, president of the National Petrochemical & Refiners Association.\n\nAdds Larry Goldstein of the Petroleum Industry Research Foundation: "The gasoline crisis is made in the U.S.A., not in Iran or Venezuela or Nigeria. At least half the increase in gasoline prices is due to unintended consequences of the energy bill, but no one in Washington wants to admit that."\n\nIndeed, while crude prices have risen 21% since the end of 2005, gasoline is up 37% - a sign of just how stretched the system is. Congress's mistake, says Goldstein, was setting the new law to go into effect 270 days after it was signed - May 5 - rather than waiting until fall, when gas demand is typically on the downswing.\n\nNow the big question is, How high can gas go? Well, perhaps the only good thing that can be said about paying three bucks per gallon is that it seems to be slowing consumption - which should, in turn, reduce prices. Over a four-week period in April, says oil analyst Jamal Qureshi of consulting firm PFC Energy, U.S. gasoline demand dropped by half a percent, to just over nine million barrels a day. That may not sound like much, but it's a reversal from the 1.7% average annual increase in gas consumption the U.S. has experienced over the past decade. If $3 is indeed the tipping point at which consumers change their behavior and alter their driving habits, it's the one silver lining in an otherwise very dark cloud for drivers.\n\nThe wildcard in this scenario, of course, is the increasing risk of a military confrontation with Iran. If that happens, says Qureshi, "all bets are off." Given that crude oil accounts for 55% of the cost of each gallon of gas (refining accounts for 22%, taxes for 19%, and distribution and marketing for 4%), an upward spike in crude oil would push gas up even if the bottlenecks caused by the energy bill ease this summer.\n\nThat's why Red Cavaney, president of the American Petroleum Institute, says the answer in the short term is conservation. Washington is indeed being turned upside down when it's left to Cavaney, Big Oil's chief lobbyist, to talk conservat
558105
Price to ship is maybe? (Gas prices)
576765
The gas prices can be helped if the pricks at exxon and all the other fuel manufacture's would lower the price.  They only reported a 50% increase in profit last year.  Yea I say they could do something about it!!!1
236826
High Supply, Low demand = Lower Price\n\nLow Supply and High demand = High Price\n\nSimple economics.  Our gas prices work this way too.. Very few refineries to refine gas, which causes lower supplies.
446687
It is already here.  But we don't want to change and continue to use gasoline like when it was cheaper.  It will start affecting how we travel and live when the price continue to increase.  We continue to buy these oil from Iran (not our friend) and support their government through our need for oil.
508328
Nobody knows.  Nobody.  Anybody who says they do is full of crap.  But here's a handy formulat to figure out how much gas should be based on oil prices.  If it's more by you, your gas station is likely price gouging.\n\nA barrel of oil hold 42 gallons.  So Divide the prive of a barrel by 41, then add in $1.00 in refining costs to get your approximate price.  This number only works in the U.S., sorry, I don't know the processing costs for other countries.  And this is for regular unleaded, the premium octanes cost more of course.\n\nSo at $63/bartrel, gas should be $2.50 a gallon.\n\nAt $70, it should be about $2.67 a gallon.\n\nAnd at $50 a gallon, tit should be about $2.19 a gallon.\n\nSo if it ever goes up to $100/barrel like those morons at Goldman Sachs said last year, then you can expect to pay at least $3.38 a gallon!
354698
This is a fair point, and I actually did this problem in a class at some point.  The bottom line is that any cost difference is going to be very small, but there can indeed be some difference.  And as the previous poster pointed out, the gas is stored in a well-insulated, underground environment, which makes any differences even more negligible.\n\nThe difference can be more pronouced if a tanker truck fills up in a 90 deg F area, drives all day and delivers to a 40 deg area.  Here, there is enough of a volume change to be noticeable.