General Discussion
In reply to the discussion: I know when gas prices will drop [View all]ProfessorGAC
(65,042 posts)In addition, the price of refined fuel is set by the traders/speculators, not by the producers (refiners).
Right now, I will admit I believe there is massive price manipulation going on by the traders.
They are, without economic cause, propping up futures to max out profits before they ultimately take a beating on their last 30 or 90 day contracts.
Given that the embargo on Russian oil is FAR from complete, and that all other producers are operating at 80% capacity or lower, there is no crimp on supply.
Plus, historically the wholesale price for each gallon of refined fuel has been a bit over 2.8% the cost of the crude per barrel.
It's now over 3.4% and has been over 3% for several weeks. There's no economic fundamentals to justify that either.
People go nuts over the huge extra profits the refiners are making, but they're just lucky beneficiaries of an out of control market. Anger should be directed at the people who appear to be price fixing to save their own butts from overestimating the impact of Russia's invasion.
I'd also start having regulators snooping around the commodity markets, as I'm not convinced this sustained overpricing occurs without collusion.