Oil is down 18% in the last 30 days. When will it be reflected in avgas pricing?

Do you think FBOs are price gouging?

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cowtowner said:
The US and Europe are not getting rid of pollution, we just offshore it to places in the Middle East, Africa, Russia and China.
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Great - more out sourcing. I guess they can do that cheaper as well.
 
I think that most of your local municipal places are not gouging, but when you look at the spread in the same region it's pretty obvious that they aren't all playing by the same rules either.
Within 50 miles of my home base 100LL ranges from 4.95 to 9.70.

What intrigues me is the economics of it seem backward, the bigger the airport the higher the cost. I suppose higher profit margins are necessary to upkeep the nicer FBO's and fields, but that should theoretically be offset/covered by much higher sales.
 
cowtowner said:
Sure, and it has worked that way. More refineries are being built, just not in the USA because of Government intervention. It is nearly impossible to get the permits here to build a refinery, so the market works and companies (and countries) build refineries in places the regulations aren't nearly as strict.

Same happened in Europe.

The US and Europe are not getting rid of pollution, we just offshore it to places in the Middle East, Africa, Russia and China.
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I'll buy that to a point. It doesn't explain shutting five refineries down here in the US in the past two years, with another on deck. The plants are still intact, just mothballed. Shut down due to lack of demand is the word. Well, demand is back as evidenced by price.

The market works...that would be an interesting concept to explore in this context.
 
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Chip Sylverne said:
I'll buy that to a point. It doesn't explain shutting five refineries down here in the US in the past two years, with another on deck. The plants are still intact, just mothballed. Shut down due to lack of demand is the word. Well, demand is back as evidenced by price.
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I don't know............what factors might have contributed to the closing of refineries?

March 2020?

November 2020?

If you were told "Hey, we plan to put you out of business" by the government, at the same time you are losing billions per year because the world is shut down, do you think you would invest in updating infrastructure? Especially when there was a glut of refined products on the world market?

Or would you say.......mothball them (not really the case, the largest was damaged in a Hurricane, the other larger one was up for sale for two years and nobody wanted it even at a discount) and maybe wait until the political tides turned a little?

The people running downstream energy aren't a bunch of morons. They would LOVE to have more capacity right now, it would be like owning a printing press for money. But even bringing a shut down refinery online doesn't make financial sense to them......yet.

Think about this, right now the government is sending BILLIONS to Ukraine to fight it's war. Why didn't congress allocate money to downstream energy to get these refineries up and running? Why is our president going to Saudi Arabia to beg them to increase production (and refinery production as well), but not going to Houston or Midland? He called the Saudi's a pariah during the campaign. I guess he thinks us Texans are worse than Pariah's.

Domestic Oil and Gas employ a huge number of Americans in well paying jobs. They also support smaller companies like my own that put millions into the economy. And domestic production and refining is a national security matter. But we are put under more and more regulation, some of which is shutting down production.

But back to offshoring our pollution and jobs to make the greens happy.

That's my Ted Talk for today. Back to filling orders to these dirty O&G production companies.

Edited to add this to remain on an Aviation topic:

The US Government flooded the airlines with billions of dollars to keep them operational and used "National Security" for the cover to do so.

But not one dollar went to O&G. Why is that? Why are airliners more important to national security than O&G.....

Do you know why Japan attacked us at Pearl Harbor? It wasn't because there weren't hourly flights from Dallas to Houston
 
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cowtowner said:
I


Do you know why Japan attacked us at Pearl Harbor? It wasn't because there weren't hourly flights from Dallas to Houston
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yup - but the discussion of this would probably get us a vacation
 
Pilawt said:
The big FBO (also the only FBO) at our airport has an "avgas club" for tenants - pay $20/month up front, get a substantial discount off the listed fuel price. They adjust the club price on the first of each month. As of July 1, the club price went down forty cents a gallon from the previous month.

At that, I'm buying 100LL for not much more than premium unleaded for my Audi at the local discount gas station.
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I am at the same airport/fuel club as @Pilawt

They just now emailed a never-before-done mid-month price decrease. Now $5.94.

I mean, seriously, they have never done a mid-month adjustment before. And it’s a DECREASE. I definitely don’t hold them guilty of price gouging.
 
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Rgbeard said:
I mean, seriously, they have never done a mid-month adjustment before. And it’s a DECREASE. I definitely don’t hold them guilty of price gouging.
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Prices are decreasing because I tankered up pre-Oshkosh at one of the less expensive airports. You're welcome!
 
masloki said:
Prices are decreasing because I tankered up pre-Oshkosh at one of the less expensive airports. You're welcome!
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I don't expect refiners will be lining up to invest in new production capacity as electric cars continue to increase in numbers.
 
Archer Jack said:
I don't expect refiners will be lining up to invest in new production capacity as electric cars continue to increase in numbers.
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China is adding more refineries (even though they have excess capacity) and has more electric vehicles than the rest of the world combined.

Think they see refining capacity as a national security issue?
 
cowtowner said:
I don't know............what factors might have contributed to the closing of refineries?

March 2020?

November 2020?

If you were told "Hey, we plan to put you out of business" by the government, at the same time you are losing billions per year because the world is shut down, do you think you would invest in updating infrastructure? Especially when there was a glut of refined products on the world market?

Or would you say.......mothball them (not really the case, the largest was damaged in a Hurricane, the other larger one was up for sale for two years and nobody wanted it even at a discount) and maybe wait until the political tides turned a little?

The people running downstream energy aren't a bunch of morons. They would LOVE to have more capacity right now, it would be like owning a printing press for money. But even bringing a shut down refinery online doesn't make financial sense to them......yet.

Think about this, right now the government is sending BILLIONS to Ukraine to fight it's war. Why didn't congress allocate money to downstream energy to get these refineries up and running? Why is our president going to Saudi Arabia to beg them to increase production (and refinery production as well), but not going to Houston or Midland? He called the Saudi's a pariah during the campaign. I guess he thinks us Texans are worse than Pariah's.

Domestic Oil and Gas employ a huge number of Americans in well paying jobs. They also support smaller companies like my own that put millions into the economy. And domestic production and refining is a national security matter. But we are put under more and more regulation, some of which is shutting down production.

But back to offshoring our pollution and jobs to make the greens happy.

That's my Ted Talk for today. Back to filling orders to these dirty O&G production companies.

Edited to add this to remain on an Aviation topic:

The US Government flooded the airlines with billions of dollars to keep them operational and used "National Security" for the cover to do so.

But not one dollar went to O&G. Why is that? Why are airliners more important to national security than O&G.....

Do you know why Japan attacked us at Pearl Harbor? It wasn't because there weren't hourly flights from Dallas to Houston
Click to expand...

So you blame the Government for cutting domestic O&G, but want Gov't to fund and open mothballed refineries so domestic O&G can "own a printing press for money" because it's for "national security". No thanks, done enough of that.


I'm out before this really goes south.
 
I'm a data driven guy (I run a data analytics team, afterall) so here's your graph of the day, made by yours truly off of NYSE RBOB data and EIA national pump averages. Sure, this isn't avgas, but it is interesting anyway. It's interesting that the back half of 2021 didn't fully follow the curve like it did in 2020. Then the ramp up in price stayed in line for March and April 2022 and then June again. Right now another gap has formed on the downside. This supports the argument that things don't fall as fast since you don't see the same kind of gap on the way up. Either way, as long as futures start to stay steady or continue to fall, the graph would indicate we are on track for a 75 cent per gallon drop at the pump. Oil is down to $92 and falling at the moment.

gas prices.JPG
 
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NealRomeoGolf said:
I'm a data driven guy (I run a data analytics team, afterall) so here's your graph of the day, made by yours truly off of NYSE RBOB data and EIA national pump averages. Sure, this isn't avgas, but it is interesting anyway. It's interesting that the back half of 2021 didn't fully follow the curve like it did in 2020. Then the ramp up in price stayed in line for March and April 2022 and then June again. Right now another gap has formed on the downside. This supports the argument that things don't fall as fast since you don't see the same kind of gap on the way up. Either way, as long as futures start to stay steady or continue to fall, the graph would indicate we are on track for a 75 cent per gallon drop at the pump. Oil is down to $92 and falling at the moment.

View attachment 108622
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is the RBOB always front month? or just the historical pricing of the current front month?
 
kaiser said:
is the RBOB always front month? or just the historical pricing of the current front month?
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I'm not a futures trader so I don't know the lingo. The price I used for yesterday's close is the August contract. However, as you can see above, I forced the axes to match at the front so I could see how they move together. The correlation for 2020 and most of 2021 was pretty close so I felt it worked. Open to suggestions on other ways to view it.
 
My FBO is on a tank that’s priced at the same level as it was last year. They won’t raise the prices until a new tank comes in. I will support these guys forever as a result.
 
NealRomeoGolf said:
I'm not a futures trader so I don't know the lingo. The price I used for yesterday's close is the August contract. However, as you can see above, I forced the axes to match at the front so I could see how they move together. The correlation for 2020 and most of 2021 was pretty close so I felt it worked. Open to suggestions on other ways to view it.
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If the graph is RBOB Aug22 only, then you'll see lower volatility (& pricing changes/response) the further you are from the contract date.

Since I know you're a data guy, another interesting way to view this relationship would be to take each front month and meld the data - say on a rolling 6 weeks or so. On that note, volatility spikes inside 2 weeks to the expiration. Back when I did stuff like this, I'd always focus on the time between expiration -6/8 weeks and -2 weeks.

This is all assuming futures pricing actually matches reality - which sometimes it doesn't.. like when front contract oil went to zero (Apr 2020?)
 
kaiser said:
If the graph is RBOB Aug22 only, then you'll see lower volatility (& pricing changes/response) the further you are from the contract date.

Since I know you're a data guy, another interesting way to view this relationship would be to take each front month and meld the data - say on a rolling 6 weeks or so. On that note, volatility spikes inside 2 weeks to the expiration. Back when I did stuff like this, I'd always focus on the time between expiration -6/8 weeks and -2 weeks.

This is all assuming futures pricing actually matches reality - which sometimes it doesn't.. like when front contract oil went to zero (Apr 2020?)
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I don't think that is what the data is doing. I think it's a rolling one-month ahead view (meaning the June data in the graph is the July contract, etc.). I'll have to check the source.
 
Zeldman said:
Of course.

Anyone wanna learn how to invest should follow me and do the opposite of what I do...
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Corn fell out of bed this week too if it makes you feel any better.
 
Chip Sylverne said:
When I went to school, the way the market was supposed to work was high prices was supposed to lead to more competitors entering the market. Instead, we have refiners closing, and aging plants going without required maintenance to keep operating...and massive share buybacks.
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except when governmental policies are set up to put you out of business when I went to school that was called investing in a soon to be extinct asset. We haven't built new refineries in decades and some oil refineries have switched over to produce biofuels because that is where the "market" is going due to govt policy picking a winner.
 
Why are oil prices dropping did we find an alternative to Russia
 
I won’t be excited until gas gets back to $2 per gallon again (or less)
 
And if anyone doesn't believe my statement above, here is the data. You don't usually see a drop like that in the middle of summer. Also, gasoline inventory is up, which you don't typically see in the summer either.
gasoline demand.JPG
 
The oil market is also global. So as Russia has secured contracts with other nations like India and China, the pressure on the overall supply has lessened. More supply, less demand as people change habits, and prices come down.
 
How low do you want a twin to go? In the market?
 
I just walked past a 310 with a for sale sign in the window ...


Sent from my iPhone using Tapatalk
 
sonopoa said:
Why are oil prices dropping did we find an alternative to Russia
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Oil prices collapsed in 2015 because the Saudis were trying to destroy US oil production. US oil rigs started dropping quickly due to cheap oil. Then the Covid outbreak of 2020 destroyed demand - again rig counts dropped. Since then US rigs have steadily been coming back so there's more supply out there than before.

upload_2022-7-23_21-51-56.png
 
Are y'all seeing any relief yet? I bought a tank of 87 octane E10 for $3.59 yesterday, and the predominant price now is $3.89, which is 70 cents less than the peak. On the other hand, 90 octane E0 is still $6.29 at the marina.
 
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