Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
17 September 2008
16:256247At one time there was talk of oil soaring through the 300$ per barrel mark but it never happened, although this horrible prospect had been seriously on the cards. The consequences would have been fairly dire for all, for businesses, for prices, for general life for the man/woman in the street, but as we say it mercifully swung back down.
The AA said today however.....
"Falling oil prices, that have now crashed through the $100-a-barrel mark, have yet to be reflected in UK pump prices. Over the month, petrol prices rose briefly before dropping back to barely below where they started. In some parts of the country there has been virtually no change in price."
So why the heel dragging. Of course the longer the delay in getting the price to the pump the more money the oil companies, and everyone in between, makes. Its scandalous.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
17 September 2008
16:376250PaulB - I dont pretend to be an expert on commodity prices but I understand that supply is secured on the futures market so the petrol in the pumps reflect the oil prices agreed months ago. I caught the tail end of a radio discussion along those lines today but because I didnt hear all of it I cannot be certain. It would certainly explain this. The need to use the futures market is one of securing supply.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
17 September 2008
19:416263i have to agree with barry there, a lot of commodities are handled through the "futures" market.
on the obverse side, it can work in the consumers favour, if the price is on the up.
Guest 651- Registered: 12 Mar 2008
- Posts: 5,673
17 September 2008
21:586269Understand the need for the price to work it's way through, but it has gone from $147 to $91, but I can't imagine that anything like this will be reflected at the pump
Been nice knowing you :)
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
17 September 2008
22:076270Paul. The price paid now at the pump may be petrol bought at the £147 level..... Dont forget though that the price is made up of a lot of elements (profit margins, tax, storage and refinement costs and transport costs). So if the raw material price drops 50% it does not mean that the retail price will drop that much as each of the other elements within the price may not have done so. We have seen some reduction in pump prices and hopefully they will continue to fall.
Guest 651- Registered: 12 Mar 2008
- Posts: 5,673
17 September 2008
22:496272Yes but when oil was last about $90, the petrol price was about £1 a litre, cannot imagine it getting back to that level whatever happens... everything is about fleecing the motorist
Been nice knowing you :)
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
18 September 2008
07:206282Yes the Press Release at top of page was from AA Roadwatch and issued only yesterday so they clearly feel that's the case....as Scotchie says.
Yorkshire and Humberside have the cheapest petrol at 111.9 per litre
the SouthEast has it at 113.4 per litre. These prices are of course average. You may come across cheaper or indeed dearer stuff. Anyone know where its cheapest around here?
Guest 651- Registered: 12 Mar 2008
- Posts: 5,673
18 September 2008
08:046289Cheapest petrol round here is 109.9 at Asda Canterbury and 121.9 for diesel there
http://www.petrolprices.com/Been nice knowing you :)
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,695
18 September 2008
18:436301The headline price of oil we see on the news is the "spot" price and is for oil bought and paid for on the open market today.
However, oil companies need security of supply and therefore need to buy forward, hence they will purchase oil in one of 2 ways,
either by entering into long term contracts with some form of price determination mechanism
or by buying futures to hedge against price movements
either approach has cost implications and these will be fed into the retail price, they also have timing lags which means it takes time for lower market prices to feed through to pump prices
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Guest 668- Registered: 13 Apr 2008
- Posts: 91
19 September 2008
13:416316Strange though Ross, if the price of Oil goes up the price is instantly filtered through to the pumps...