Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
put the dollar back at $1.20/Euro and gas drops by $1/gallon (25%).

take out the fear premium on crude and another leg down of crude to maybe half what we are now.  Saudi was just as happy at $60 as they are now at $140, though that may well change now that they see $140 without the world coming to an end.

As for Hughs "three iron laws", I'd say 3 pieces of ossified camel droppings.

Gasoline prices are very highly correlated with crude oil prices with a seasonal overlay of low margins for mogas in winter when distillates rule and higher margins in summer (until this year) when gas is king.  Chinese and Indian demand for mid distillates is changing the equation.

Mogas prices are always manipulated.  Sans proof, this is just left wing bullshit.  Mogas prices at the wholesale level can crap out to crude + $2/bbl in winter.  Most of the differential to pump price is taxes and a bit of distribution and dealer profit.  With country wide prices at fairly similar levels (after backing out taxes) other than places far from supply points or requiring specialty blends like in LA, this is a charge that can't be substantiated though many have tried.

Low in the long run ignores how far crude could collapse is we develop great batteries that make electric cars as flexible as the ICE.  And High in the short run is based on a wish rather than any economic calculation.  Walk 2 miles with a couple of bags of groceries.  Oil is still cheap.

by HiD on Sat Jul 12th, 2008 at 07:43:08 PM EST

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