$1.99/gallon for regular gas at Costco now, (well, last night, actually)

am I the only one who thinks that's ridiculously low?

not that I'm complaining or anything....

but something just doesn't feel right...

sorry... I made a mistake... it's $1.98 not $1.99

Is that the member price? It seems low, but not to an absurd level. I think that I saw regular gas in Woodbridge over the weekend at $2.21 per gallon.

My gas guzlers need 1.50 gas. Not low enough.

$1.80 south of Richmond... if you want to take the road trip...

http://www.virginiagasprices.com/index.aspx?s=Y&fuel=A&area=All+Areas&station=All+Stations&tme_limit=24&site=Virginia&srch=1&list=0

$1.99 in Front Royal last Sat. night, $1.99 in Gainesville on Mon night. $2.09 in Manassas this evening, down from $2.15 this morning. Prices are coming down and I love it!!

With unemployment heading to 8 percent (a figure that is actually worse than it appears because the massive number of illegal immigrants who are and will continue to lose employment do not get factored in), we will face shrinkage in our economy even worse than we saw at the end of the Carter administration, which was pretty dismal. The demand for oil will continue to decline along with the economy for some time. We may see petrol at a $1.15 in 09, irrespective of what the highly imperfect cartel known as OPEC may attempt.

If the new administration raises taxes in an absolutely credit paralyzed economy, we may see a depression. On the bright side, gas will be even cheaper. Time to be disciplined and tough things out in 09.

I went to South Carolina last weekend and when I passed through NC I stopped to get gas. It shut off at $30.74. I thought the pump stopped because of my grip or something at first, but it stopped because the tank was full.

It was between $2.25 and $2.65 all the way down to SC.

I remember it taking $60 to fill my tank only a few months ago.

But don't worry, the gas companies will surely crank the prices back up since the election is over.

Jaybee - while I do think that oil companies do engage in price manipulation and in the short run do harm consumer welfare (in a way that is often subtle and exceedingly difficult to prove, unfortunately), they cannot run away from supply and demand and right now the demand curve is imploding, meaning that prices will not go up after the election, and given the significant recession at hand which we may only be a sixth or a fourth of the way through, prices will continue to go down. This is so irrespective of what OPEC may purport to do (they are lousy at enforcing their cartel). This doesn't mean everday Joe's or even reputable traders should go out and nakedly short oil futures, because volatility will likely remain high and hence the markets will be a risky game, but it is hard to imagine a scenario where prices will go up in the near future. Lower gas prices will only be a small solace to those facing bleak employment prospects, however. I don't envy the job the Democrats now have before them.

On a local angle, I am constantly irritated at how much more gas is in Fairfax, than, let's say, in Haymarket or points west. It would be interesting to see how the oil distribution players are maintaining that premium. Nice study for a business prof - maybe someone at GMU could do it.

Every penny per gallon that the price is inched up is another 15-20 cents from each customer at each fill-up.

It adds up and quickly, since most people fill up once/twice a week. 20 cents doesn't seem like much, right? But now multiply it by 200 million Americans, per week and that 20 cents becomes 2 trillion (with a T) dollars over the course of a year. 2 trillion taken out of the economy for every penny the price of a gallon is increased.

Can you imagine how much money that was sucked up into this when the Oil companies (who made 160 Billion last year in profits), helped pushed the price of a barrel of crude to $137 just this Fall, from a low of $24 in 2004?

I am convinced that Oil prices sucked so much out of the economy so fast that it sparked the downturn in spending, which precipitated the housing crisis, general collapse of the credit markets, banking industry and now stock market. The softer markets, such as Real Estate, which were (are) over-leveraged and over-valued were the first to fall.

It was big news when gas went up so fast, but it was life altering when people lost their home. The Real Estate market got all the attention and blame, but Oil is what, I feel, precipitated this crisis.

My 2 cents.

If the lower price pulls the rug out from efforts to conserve...efforts to develop alternatives we will find ourselves in the same boat over and over again.

Vince(1) Wrote:
-------------------------------------------------------
> If the lower price pulls the rug out from efforts
> to conserve...efforts to develop alternatives we
> will find ourselves in the same boat over and over
> again.


I'm pretty sure that Vince is actually Gerry Connolly. Fess-up 'vince'

Bluetec09 Wrote:
-------------------------------------------------------
> $1.99/gallon for regular gas at Costco now, (well,
> last night, actually)
>
> am I the only one who thinks that's ridiculously
> low?

considering in the 90's it was $1, it's not ridiculously low.


"the wisdom of the wise will perish, the intelligence of the intelligent will vanish."



Edited 1 time(s). Last edit at 11/08/2008 04:51PM by Gravis.

I figure that with the value of my house going down every month...and the value of my stock portfolio going down every month..the recent "reduction" in gas prices, gas is now costing me about $100 per gallon. Of course for you folks who dont own a house or stock portfolio this constitutes nothing less then a transfer of wealth and income from me (and 100s of thousands just like me) to you. This country has truly become a socialist country almost overnight...and that helps me sleep a little better at night.

$1.98 wont last long, Connolly is coming to the rescue.

Tax the crap out of me Wrote:
-------------------------------------------------------
> $1.98 wont last long, Connolly is coming to the
> rescue.


you are a socialist..income distributor

Jaybee = as hard as it is to believe, especially given their net profits lately, being in the oil is not such a great business in terms of return on investment. Exxon Mobil's PE is at 8...fair enough, but it is not a blockbuster business in terms of ROI and sucks up billions in capital. This is an unpopular view but the oil doesn't leap out of the ground - it is hard to find, extract, and refine - a return on an investment is not a bad thing. Nationalized oil companies are less efficient, don't have the technology, and typically as such operate with allocative inefficiency. Thank goodness we don't have PEMEX. The Exxon's of the world are easy targets politically, but they are not fantastic businesses in the long run.

Moreover, in terms of alternative energy, the oil companies will have to find them irrespective of how oil prices may decline in the near future and putatively inhibit incentives for alternative sources.

Ask any one skilled in the energy business what is happening. Historically, oil companies have been valued basis their reserves. That is changing and will continue to change. Nation states - Russia foremost among them but there are any number that belong in the same category - are increasingly owning the oil and only relying on the Exxon's of the world for drilling technology and operations. It is a brand new world for oil companies - and their value will decline unless they can in the long term control both the means and have title to the source of production - which they could do with alternative forms but will no longer be able to do with oil. This is not to say that the Government should not take wise steps in its energy policies to incent alternative development - it should - but it makes sense to see where the market is taking these companies and it is in our national interest to have them make an adjustment away from the reserve valuation model as smoothly and as fast as they can. To do that they will have to continue to succeed in their mature business but at the same time use that capital wisely. Being anti-oil out of a sense of class or wealth envy is poor policy.

Being anti-oil out of a sense that it is 18th century solution to a 21st century demand for clean energy is great policy.

oil companies Wrote:
-------------------------------------------------------
> Jaybee = as hard as it is to believe, especially
> given their net profits lately, being in the oil
> is not such a great business in terms of return on
> investment. Exxon Mobil's PE is at 8...fair
> enough, but it is not a blockbuster business in
> terms of ROI and sucks up billions in capital.
> This is an unpopular view but the oil doesn't leap
> out of the ground - it is hard to find, extract,
> and refine - a return on an investment is not a
> bad thing. Nationalized oil companies are less
> efficient, don't have the technology, and
> typically as such operate with allocative
> inefficiency. Thank goodness we don't have PEMEX.
> The Exxon's of the world are easy targets
> politically, but they are not fantastic businesses
> in the long run.
>
> Moreover, in terms of alternative energy, the oil
> companies will have to find them irrespective of
> how oil prices may decline in the near future and
> putatively inhibit incentives for alternative
> sources.
>
> Ask any one skilled in the energy business what is
> happening. Historically, oil companies have been
> valued basis their reserves. That is changing and
> will continue to change. Nation states - Russia
> foremost among them but there are any number that
> belong in the same category - are increasingly
> owning the oil and only relying on the Exxon's of
> the world for drilling technology and operations.
> It is a brand new world for oil companies - and
> their value will decline unless they can in the
> long term control both the means and have title to
> the source of production - which they could do
> with alternative forms but will no longer be able
> to do with oil. This is not to say that the
> Government should not take wise steps in its
> energy policies to incent alternative development
> - it should - but it makes sense to see where the
> market is taking these companies and it is in our
> national interest to have them make an adjustment
> away from the reserve valuation model as smoothly
> and as fast as they can. To do that they will
> have to continue to succeed in their mature
> business but at the same time use that capital
> wisely. Being anti-oil out of a sense of class or
> wealth envy is poor policy.

"especially given their net profits lately" ?? Really?

P/E ratios and ROI aside, $14 billion in quarterly profits is still nothing to cry about.

In fact, citing the P/E ratio is actually an attempt to misdirect attention away from the $60 billion a year in profits.

P/E ratios are really only good for comparing one company in an industry to another company in the same industry.

$60 billion in profits is still $60 billion in profits. Tell me you wouldn't want to own a business that does $60 billion in profits. Sure, they may spend a lot in finding oil and in extracting it, but even after they spend all that money, they wind up with $60 billion in profits. It doesn't matter if they spent a trillion dollars to get that oil, because they obviously sold that oil for $1.06 trillion dollars, leaving them $60 billion in profits.

Of course I would love to own a business that generates 60 billion in profits. But since that business would require accumulating hundreds of billions in capital, no one individual can do that. And that capital didn't just appear by magic - we have a low cost of capital in this country - historically one of the lowest - because of focus on innovation and our respect for the rule of law and stability in our securities markets - not conservative tenets - but actually liberal ones that recognize that the appropriate dose of regulation and oversight make for a favorable and responsible business environment. As difficult as it sounds, profit is a good thing - and in a commodity business, when prices are high, those businesses make impressive profits.

So instead we have millions of shareholders owning that business. Most are institutions, although with benefits redounding to millions of ordinary people and pension holders through mutual funds and retirement accounts. So it is a mistake to view oil companies' profits as a zero sum game, where they retain sizable earnings simply for themselves. (This is not to say executive compensation isn't a problem - it is - but that has more to do with the failure of corporate governance - a problem neither political party has come to grips with, than anything else).

Put simply, we all have an enormous stake in seeing the oil companies take their sophisticated (and exceedingly expensive) distribution networks and further that advantage to new forms and sources of energy. It will benefit us all. To do that they will need to take their profits from their very mature business - one which needs to keep operating to keep both their companies and this country going - and use them wisely and in a way that the market will accept over time. That kind of innovation doesn't come about solely by regulation, but at the same time the regulatory environment ought to be supportive of innovation and technology transfer. Adaptation to alternate energy sources is all about cost and economies of scale - and we can learn from stupid policies we have now - like ethanol - which costs us more (in every way) and is environmentally harmful. Doing the right thing requires more from policy makers than an anti-oil company screeds or special interest lobbies (in the case of ethanol, the ag lobby), and we should avoid stances reflexive of emotions and little else.

By the way, the oil companies in no way deserve a free pass. Some of their pricing practices just don't seem right to me - they appear to have become sophisticated price manipulators and delay or impede the clearing of some markets - and it has continuously bothered me over the years. It is no accident that so many anti-trust cases historically have revolved around the oil and energy business - where's there's smoke there is some fire.

And they likely fail in many environmental respects, although in a capitalist economy that punitively values negative externalities they have not failed in the spectacular and awful way that state controlled entities such as we have seen in the Soviet Union (perhaps the worst polluter in the history of the world) and in China. But these are discrete subjects for criticism, far more helpful than a broad diatribe. We ought to responsibly regulate them, and at the same time, reasonably support them in their transitions that will inevitably be required.

$1.94 in Warrenton yesterday. I splurged for the 93 octane for my Acura at $2.19...

Bluetec09 Wrote:
-------------------------------------------------------
> $1.99/gallon for regular gas at Costco now, (well,
> last night, actually)
>
> am I the only one who thinks that's ridiculously
> low?
>
> not that I'm complaining or anything....
>
> but something just doesn't feel right...


I saw gas that cheap at a regular gas station in Prince William County. It is coming down below $2 a gallon.

bob doesn't understand economics Wrote:
-------------------------------------------------------
> Of course I would love to own a business that
> generates 60 billion in profits. But since that
> business would require accumulating hundreds of
> billions in capital, no one individual can do
> that. And that capital didn't just appear by
> magic - we have a low cost of capital in this
> country - historically one of the lowest - because
> of focus on innovation and our respect for the
> rule of law and stability in our securities
> markets - not conservative tenets - but actually
> liberal ones that recognize that the appropriate
> dose of regulation and oversight make for a
> favorable and responsible business environment.
> As difficult as it sounds, profit is a good thing
> - and in a commodity business, when prices are
> high, those businesses make impressive profits.
>
>
> So instead we have millions of shareholders owning
> that business. Most are institutions, although
> with benefits redounding to millions of ordinary
> people and pension holders through mutual funds
> and retirement accounts. So it is a mistake to
> view oil companies' profits as a zero sum game,
> where they retain sizable earnings simply for
> themselves. (This is not to say executive
> compensation isn't a problem - it is - but that
> has more to do with the failure of corporate
> governance - a problem neither political party has
> come to grips with, than anything else).
>
> Put simply, we all have an enormous stake in
> seeing the oil companies take their sophisticated
> (and exceedingly expensive) distribution networks
> and further that advantage to new forms and
> sources of energy. It will benefit us all. To do
> that they will need to take their profits from
> their very mature business - one which needs to
> keep operating to keep both their companies and
> this country going - and use them wisely and in a
> way that the market will accept over time. That
> kind of innovation doesn't come about solely by
> regulation, but at the same time the regulatory
> environment ought to be supportive of innovation
> and technology transfer. Adaptation to alternate
> energy sources is all about cost and economies of
> scale - and we can learn from stupid policies we
> have now - like ethanol - which costs us more (in
> every way) and is environmentally harmful. Doing
> the right thing requires more from policy makers
> than an anti-oil company screeds or special
> interest lobbies (in the case of ethanol, the ag
> lobby), and we should avoid stances reflexive of
> emotions and little else.
>
> By the way, the oil companies in no way deserve a
> free pass. Some of their pricing practices just
> don't seem right to me - they appear to have
> become sophisticated price manipulators and delay
> or impede the clearing of some markets - and it
> has continuously bothered me over the years. It
> is no accident that so many anti-trust cases
> historically have revolved around the oil and
> energy business - where's there's smoke there is
> some fire.
>
> And they likely fail in many environmental
> respects, although in a capitalist economy that
> punitively values negative externalities they have
> not failed in the spectacular and awful way that
> state controlled entities such as we have seen in
> the Soviet Union (perhaps the worst polluter in
> the history of the world) and in China. But these
> are discrete subjects for criticism, far more
> helpful than a broad diatribe. We ought to
> responsibly regulate them, and at the same time,
> reasonably support them in their transitions that
> will inevitably be required.

Unless I pissed you off for some other comment I made in the past, I don't know why you have to use the name "bob doesn't understand economics".

You don't write anything here that contradicts what I said, and I studied economics and my father has a PhD in Macroeconomics and applied systems theory from USC, and I've discussed this sort of thing with him on many occassions.

$1.99 in VA on the delmarva near the Bay Bridge/Tunnel last night.

It was $2.16 in the Boston, MA area a couple days ago.



Edited 1 time(s). Last edit at 11/13/2008 10:13PM by Spacy.

Which Costco are you going to?

$1.99 at the Shell on Lee Hwy & Union Mill....is that the lowest in FFX County?

tubby Wrote:
-------------------------------------------------------
> $1.99 at the Shell on Lee Hwy & Union Mill....is
> that the lowest in FFX County?


I think BJ's in Fair Lakes is $1.93. Does anyone know if you need to be a member to buy their gasoline?