Gas prices falling...

In the last couple of weeks, gas around here (Iowa) has dropped 10%,
back down into the $2.70 per gallon range. (This is mogas, obviously
-- the only stuff I'll burn in my plane, if I have a choice.)

I actually paid $2.67 per gallon last night.

With all the problems related to the Alaska pipeline, this is exactly
the OPPOSITE action everyone predicted. I'm not complaining, mind
you, but I *am* confused -- why is the price of gas dropping so fast
right now?.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Jay Honeck wrote:

In the last couple of weeks, gas around here (Iowa) has dropped 10%,
back down into the $2.70 per gallon range. (This is mogas, obviously
-- the only stuff I'll burn in my plane, if I have a choice.)

I actually paid $2.67 per gallon last night.

With all the problems related to the Alaska pipeline, this is exactly
the OPPOSITE action everyone predicted. I'm not complaining, mind
you, but I *am* confused -- why is the price of gas dropping so fast
right now?.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"



I do not believe anyone knows. I think oil futures are pure speculation
and so is gas prices. I heard on the news this morning that oil is up a
dollar and some, because a new tropical storm is forming and it just
MIGHT go into the Gulf. Kind of like the stock market, all on emotion.

--

Regards, Ross
C-172F 180HP
KSWI

Jay Honeck wrote:
I'm not complaining, mind
you, but I *am* confused -- why is the price of gas dropping so fast
right now?.

Several reasons. The end of the summer travel season has arrived,
people have probably cut back on driving to some extent because of
higher prices and so demand is down. No hurricanes thus far have
also put a damper of the rabid paranoia in the futures market.

Just remember that the price of oil (and thus, gasoline) is set
by the global markets and oil futures contracts as well as the spot
market. When world geopolitical situations are unstable up goes
the price of oil since its supply lines can so easily be distrupted.

Hey Jay,
Hope you've had your coffee...

Two weeks ago, the very day of the London terror threat announcement,
September Unleaded gas futures dropped 18 cents per gallon so I jumped and
bought 2 semi loads. I paid $2.789 which includes all of the fed and state
taxes. Yesterday, the futures dropped 5-6 cents to close 14 cents lower
than the close the day 2 weeks ago... So I figure, time to buy again! I had
room for one more semi load. I had to pay $2.762. Current NYMEX Sept
futures are $1.845 per gallon, the difference is basis, freight, and tax.

While the futures dropped 14 cents during the past two weeks, basis has
gotten very expensive and terminal prices only dropped 2.7 cents.

I get a newsletter on the fuel markets twice a week.... here are some
comments taken from that.

The Alaska pipeline problem was a news event waiting for something more
spectacular to happen. It's a nothing deal. The volume that the pipeline
contributes to America's usage is rather small and it only goes to
refineries on the left coast. Mexico and Venezuela stepped up to the plate
and filled in any shortage. The big news was that the terror threat poked a
hole in the fuel bubble by questioning how much fuel the airlines would be
using. With refined product inventories high, draws on crude inventories
low, refinery utilization very high, driving season coming to an end, Mexico
stepping in to fill crude shortages in the west... the Alaska pipeline
problem simply couldn't hold the markets up.

In all actuality the prices currently seen dropping at the pumps are the
trickle down reaction to the lower terminal prices that have been dropping
for the past 2 weeks, initiated by the London terrorist scare and builds in
inventory levels.

Last week both refined and crude inventories were at the highest levels in
several months and higher than this time last year. There is still good
summer driving demand, although it's starting to wane and prices will also.
This is typical for this time of the year. Look for lower prices at the
pumps during the following weeks.

Jim

Jay Honeck wrote:
In the last couple of weeks, gas around here (Iowa) has dropped 10%,
back down into the $2.70 per gallon range. (This is mogas, obviously
-- the only stuff I'll burn in my plane, if I have a choice.)


Jay, mogas in this part of the world (the Middle East) means the stuff
I put into my C240. The fuel for aircraft is called A-1 hereabouts (I
know because I constructed an A-1 pipeline ).

What's the fuel for cars called in the US? This is all rather
addling...

Ramapriya

Kind of like the stock market, all on emotion.

I agree. In theory, if you get "caught" owning a futures contract when it
closes, you can be forced to take delivery of the actual product. You can
also be forced to deliver the actual product. If futures traders were forced
to own facilities to accommodate delivery of the underlying product, or
forced to own the product before selling a futures contract, there would be
a LOT less speculation.

Jim

wrote:

Ignore my earlier post. Did a Google and realized that there are planes
that use Mogas too

Ramapriya

wrote in message
oups.com...
Jay Honeck wrote:
In the last couple of weeks, gas around here (Iowa) has dropped 10%,
back down into the $2.70 per gallon range. (This is mogas, obviously
-- the only stuff I'll burn in my plane, if I have a choice.)


Jay, mogas in this part of the world (the Middle East) means the stuff
I put into my C240. The fuel for aircraft is called A-1 hereabouts (I
know because I constructed an A-1 pipeline ).

What's the fuel for cars called in the US? This is all rather
addling...

Ramapriya


Jay has a Supplemental Type Certificate for his aircraft that allows him to
use automotive fuel as long as it meets certain criteria. Mogas is
automotive fuel, Avgas is aviation fuel.

Allen

On 2006-08-25, wrote:
Jay Honeck wrote:
In the last couple of weeks, gas around here (Iowa) has dropped 10%,
back down into the $2.70 per gallon range. (This is mogas, obviously
-- the only stuff I'll burn in my plane, if I have a choice.)

Jay, mogas in this part of the world (the Middle East) means the stuff
I put into my C240. The fuel for aircraft is called A-1 hereabouts (I
know because I constructed an A-1 pipeline ).

Mogas is fuel (petrol) you put in a car with a spark ignition engine -
i.e. a standard car. Jay's plane also runs on mogas.

Avgas or 100LL is also probably what you call "petrol". It's similar to i
mogas but has a lot of lead in it. It's what most of the GA piston fleet burns.

Diesel is fuel you put in a compression ignition engine such as a truck
or diesel car.

A-1 in your case is short for Jet A-1 (kerosene). You put it into
turbine powered planes and a very small number of diesel engined planes.
Jet A-1 is quite similar to diesel. It will kill the engine of a normal
avgas or mogas powered GA plane.

In the United States, Jet-A and 100LL are similarly priced, and mogas is
a little cheaper. Diesel is cheaper than Jet-A or 100LL in the main, but
slightly more than mogas.

In the UK, 100LL is the most expensive (by a long way), mogas is a
little cheaper. Diesel is about the price of mogas. Jet-A1 is about
1/3rd of the price of avgas or mogas (and hence aviation diesel engines
are sought after - they are very much cheaper to run than spark
iginition engines).

What's the fuel for cars called in the US? This is all rather
addling...

By the normal populace, 'gas', which is short for 'gasoline'. By the
aviation community, car fuel is called 'mogas'.

--
Yes, the Reply-To email address is valid.
Oolite-Linux: an Elite tribute: http://oolite-linux.berlios.de

Jim Burns wrote:
Kind of like the stock market, all on emotion.

I agree. In theory, if you get "caught" owning a futures contract when it
closes, you can be forced to take delivery of the actual product. You can
also be forced to deliver the actual product.

That is not true. Here is an example of what a future is:

Suppose you and I were neighbors. You pay me $3 if I agree to
pay you the price posted at the local gas station for regular at 9
AM tomorrow.

A future is nothing more than a bet on the future price in the
spot market.

If futures traders were forced
to own facilities to accommodate delivery of the underlying product, or
forced to own the product before selling a futures contract, there would be
a LOT less speculation.

Jim