Is gasoline gas price commodity speculation and fuel oil speculation more responsible for prices than oil ?

As I understand it, crude oil is refined into gasoline and heating oil and other materials for manufacturing.....I think....even plastic.





There are crack spreads that represent the amount of oil to make one gallon of gasoline. As I understand it, you can make 10 gallons of gasoline from one gallon of oil. Correct me if I am wrong.





So, if the bid Nymex price of oil is $135/40gal barrel of oil, and you can get 400 gallons of gas from one barrel of oil, why isn't the price of gasoline $135/400 or 33 cents a gallon.....plus 40 to 60 cents tax each gallon? Why are we paying $4.00 per gallon for gasoline and heating oil?





My math may be faulty, but this is how I understand it. Please feel free to correct me.





As I see it, not only is crude oil being bid up, but also gasoline and fuel oil, because if it was just crude oil, the refining cost should bring that down for gasoline!????Is gasoline gas price commodity speculation and fuel oil speculation more responsible for prices than oil ?
Yes. Thank you for a very good question and rational exposition.





Commodities speculation in general isolates prices from true free market supply-and-demand mechanics. It is nothing more than gambling, highly subject to insider fixing, and should be outlawed.





If you're justifiably angry about this you can easily write to your representative and demand an immediate investigation into and outlawing of this practice. It's really easy, you can do it right now over the internet:





https://forms.house.gov/wyr/welcome.shtm鈥?/a>Is gasoline gas price commodity speculation and fuel oil speculation more responsible for prices than oil ?
I believe you are correct. I think the President has nothing to do with the price. I have heard people blam, prior and present Presidents for the economy. They will say if they do not like the current President, ';He is getting the benifit of the last ones work! and if they do like the current one they say, ';See he did this!';





Truth be known I really think what you are saying is the reason!





Good post.
Sounds a lot like the price of housing a couple of years ago.And of course the Internet stocks a bunch of years ago.It is coming close to the end though,when the price goes up daily , no matter what happens,it is becoming irrational.A pipeline carrying 70,000 barrels a day is stopped and the price goes up $3.00 a barrel.It's just a matter of time and the price will fall and the drop will be rapid.
I think you may have meant 10 gallons of gasoline for one barrel of oil. Speculation is only partially to blame. Another reason is the increase in the money supply. More dollars chasing the same amount of oil makes the money worth less. The third reason is the increase in demand from India and China.
The cost of gas is making everyone open their eyes and really evaluate crude oil and domestic gas prices.
Correct! Speculation is the chief price-raiser in today's economy.
Your observations are astute. Now how do you expect the rich to make a profit??
Yes.
Crude oil should and could be $10 a barrel. In fact Iran has threatened to flood the market with such oil and sell it in euros. Destroying our dollar.





If we go to war with Iran this will be the reason why.





When are we the people going to take back our country? This congress and this president is doing NOTHING to come up with an energy policy! Prices will continue to rise unless we find new sources and unless we build new refineries! The world is only going to need more oil. Conservation by us, at a huge cost, will never keep pace with oil consumption by the chinese and indians.





Can we say enough is enough and speak up already!





WRITE YOUR REPRESENTATIVE AND TELL THEM YOU ARE FED UP!!!!!!!!!!!!!!!!!!!!!!!!!