wilkes

ghwb everyone seems to forget the commodities traders that speculate on oil. They are the biggest drivers of the wild swings.

As per a comment on the article, this sounds more like the truth:

From Automotive News

My friends who knew I was a pricing analyst for a large East coast gas station chain often asked me, 'How do you determine the price of a gallon of gasoline at your stations?' Usually, a joke about using a dartboard would get a laugh and we could move one. Let's take a look at a few of the things that influence the price we pay for gas.

Here's an overview from the National Association of Convenience Stores(NACS), that offers a comprehensive look at the key factors that influence the retail price at the pump:

· Ownership and Supply Arrangements
Unlike a few decades ago, when the major oil companies owned and operated a significant percentage of the fueling locations, today only 0.4% of all convenience stores selling fuels are owned by one of the major oil companies. About another 4% are by a refining company like Valero, Sunoco or Hess. Instead, the vast majority — about 95% of stores — are owned by independent companies, whether one-store operators or regional chains. Each of these companies have different strategies and/or strengths in operations, which can dictate the type of fuel that they buy and how they sell it.
·
Crude Oil Prices Most Affect Retail Prices
No matter who owns the station, retail fuels prices are ultimately affected by four sets of costs: crude oil costs, taxes, refining costs and distribution and marketing (which accounts for all costs after the fuel leaves the refinery). Crude oil prices have, by far, the biggest effect over retail prices. Crude oil costs are responsible for about two-thirds of the cost of a gallon of gasoline. In 2012, crude oil costs were 66% of the retail price of gasoline. While there may be slight variations in the costs of refining or distributing and retailing fuels, crude oil prices can experience huge swings.
·
Sales Strategy Also Impacts the Price
Fuels retailers face the same question that all retailers face: sell at a low profit per unit and make up for it on volume, or sell at a higher profit per unit and expect less volume. But there also are many more complications in setting fuel prices that retailers of other products don't face.

Wholesale price changes: Gasoline is a commodity, and its wholesale price can have wild swings. It's not unusual to see wholesale price swings of 10 cents or more in a given day. Competing retailers in a given area may have very different wholesale prices based on when they purchased their fuel when there is extreme price volatility. They may not adjust their price until their next delivery. Depending on sales volumes and storage capacity, retailers get as many as three deliveries a day or as few as a delivery every three days or so. In other instances, retailers may adjust their prices when the competition adjusts prices, even without themselves having an imminent shipment.
·
Contracts: Retailers sign long-term contracts (10 years is the norm) and these contracts may dictate the amount and frequency of your shipments. When supplies are tight, retailers with long-term contracts may have lower wholesale costs than retailers who compete for a limited supply on the open market, but they may also face allocations (a maximum amount of fuel that they may obtain) on the amount of fuel they receive. How retailers buy fuel can play a significant role in pricing strategy.
·
Brand: Branded retailers often pay a premium for fuel in exchange for marketing support, imaging and other benefits. Branded retailers typically have the least choice in how they obtain fuel, or at what price, but that is offset by the many benefits that a brand provides. From whom retailers buy fuel ultimately affects pricing strategies.

Each of these factors adds complexity to a retailer's pricing strategy. They also can create unusual market dynamics. There are times when the retailer with the highest posted price in a given area actually may be making the least per gallon, based on when, how and where the fuel was purchased. No matter what their pricing strategy, retailers tend to reduce their markup to remain competitive with nearby stores when prices go up. This can lead to a several-day lag from the time wholesale prices rise until retail prices rise.

Likewise, when prices go down, retailers may be able to extend their markup and recover lost profits, with retail prices dropping slower than wholesale prices. Despite extreme volatility, retail margins for fuel are fairly consistent on an annual basis. Over the past five years, the annual average retail mark-up (the difference between retail price and wholesale cost) has averaged 16.9 cents per gallon. Ultimately, retailers set a price that best balances their need to cover their costs with the need to remain competitive and attract consumers, who are very price sensitive and will shop somewhere else for a difference of a few cents per gallon.
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Read more at https://blog.gasbuddy.com/p...UQOD2B4.99

The news still said this summers gas prices would be the lowest in six years. They won't be if it keeps going up every week :'(

Saw a couple places in Lenoir 2.47 last night

I believe Small, it is called GREED on all parties concerned.

Lenoir was 2.49 last night :'(

Need to flush all the repubicans in Congress and in Raleigh

Why the sudden jump in prices???

I saw $2.59 in town today

Quality Mart- West Jefferson $2.33

Quality Mart and Shell at Clemmons exit- $2.29.

3.42 in Lenoir last night

this is not gonna get better until we have a uprising against these oil companys

Was 2.39 in Elkin last night. Filled up and ate at Zaxbys.

Looks like all of Wilkes was over $2.50 yesterday :(

Small, benchmark crude closed at $65.54 this afternoon.

Memorial Day :'(

Repub greed, has to be the cause.

Prices continue to rise in the Triad, $2.39-$2.49; I don't understand, because crude is only $60.00/barrel.