I just heard on the news gas jumped over 30 cents a gallon overnight

[B Calm]

Something about the high expense of switching to summer blends.

[Error]

1. Oh Yeah!

You know those summer blends are pricy... :eyes:

[ixion]

2. in other news, watch for even larger profits from the oil cos

:grr:

[izzie]

3. I guess the the quarterly reports are being made up.

Profits are not high enough and after getting a hold of all those contract for Iraq oil you would think they would be happy. Never did understand pure greed but it is working well.

[MiniMe]

4. Meanwhile, I head that oil is at the lowest price per barrell since January

[Clark2008]

5. Summer blends?

Sounds like a rich, robust coffee.

:hi:

[Sherman A1]

6. I have been filling up on Sunday of late

seems prices go up on late Monday and then start their slow descent until the next week. Still have to get back and forth to work, so it's about the best I can do.

[A HERETIC I AM]

7. Up $.20 in a month, but not thirty cents overnight...

not here in S.W. Fla, anyway, and Florida tends to have among the highest gas prices in the country.

[ThomWV]

8. That's To Makie Up For Lower Than Expected Demand During This Past Winter

Not enough profit in the winter, got to go to summer.

[Robb]

9. Any other business on the planet

anticipates and softens the blow to consumers. Gas? Hell, why bother? :eyes:

It's like no one knew summer was coming. Or holiday weekends. "Who knew Labor Day would be upon us again?"

[melm00se]

10. summer blends

are specific blends of gasoline mandated by state and federal governments designed to cut back on smog in summer months (there is BTW a winter blend as well)

The switchover, reportedly, forces certain refineries to shut down, retool and begin producing these blends. When the switchover occurs, there are spot declines of gasoline inventories.

There are 2 big issues here at work:

1) the blends themselves: There are many different blends so "formula A" is OK in LA but may not be legal in Nevada (who has "formula b"). So in case of high inventory in LA and high prices (due to low inventories)in LV, a wholesalesr can't ship his blended gas to LV as he would be inviolation of the law. So the market is skewed in such away that it's normal mechanisms of correction are limited. What the federal government should do is mandate the same summer blend across the nation so that inter-region shipments of gasoline can happen, helping ameliorate the pricing swings.

2) we are running at nearly 100% refinery capacity (for a number of reasons that i won't get into) so there is a limited capacity to "take up the slack" when these refineries go off line for retooling. So you have dips in inventory and when demand increases (summer is aproaching) and supply drops (or is perceived to have dropped) the pricing reacts accordingly. This happens in every commodity market and gasoline is no different. I think that the fed should somehow entice the oil companies (dealers choice as to how) to build some additional "overflow" capacity as a safety valve into the system.