Huge lineup for Costco gas!!!

[Ken07AOVette]

Originally Posted by Zip

It just sucks when the greed is so powerful that an entire country cannot manage to shake things up and get a stop to all this over pricing/gouging/stealing...we are all so small that they do not care about our wallet being empty...there are always those who will pay and that's a given.
Zip

I agree completely. So many excuses and stories just to make more BILLIONS in profits off our backs. The price of fuel raising for supply and demand means that they are unable to meet demand, so essentially they are pricing people out of the market that can not afford to drive. What a crock of manure. When Canada sells it to the USA at $.65c/l then buys it back at $.85c/l it is a payoff, nothing else.

[Sundancefisher]

Originally Posted by Ken07AOVette

I agree completely. So many excuses and stories just to make more BILLIONS in profits off our backs. The price of fuel raising for supply and demand means that they are unable to meet demand, so essentially they are pricing people out of the market that can not afford to drive. What a crock of manure. When Canada sells it to the USA at $.65c/l then buys it back at $.85c/l it is a payoff, nothing else.

US is making billions off Alberta not having better access to tidewater.

You bark but have no bite. You seem to be a businessman however know nothing about economics or running a business. You must of gone through many failed businesses since you seem to emotionally state companies should not make a profit when they sell to you.

I proved profit is reasonable. I proved Taxes are very high.

Without having a beer with you to walk you through the facts I fear your ability to judge is impaired. You refuse to accept facts. You refuse to acknowledge reality.

No company is making unfair rates of return. None. In fact almost all oil companies are struggling compared to most business sectors.

I can prove I am right because if you were right we would all be heavily invested in these mysterious companies rolling in unbelievably unfair profits.

[RandyBoBandy]

We'd be making 5 cents per gallon and with the conversion to metric way back then, they'd be making 15 cents for the same amount of fuel, just a different measurement

[Sundancefisher]

Originally Posted by RandyBoBandy

We'd be making 5 cents per gallon and with the conversion to metric way back then, they'd be making 15 cents for the same amount of fuel, just a different measurement

How much did a gallon of gas cost back when the profit was 5 cents?

[madshawn]

Jesus, The price of gas in some areas of Alberta are just as expensive as British Columbia right now.

That just seems wrong considering whats been going on lately. It's almost like a bad joke. Gas in Vernon is cheapest in BC at 117.9

I am paying 131.9 in Prince Rupert and we are at the end of the line here. I am personally sick of BC NDP/GREEN government and I hope for the short term you guys can put the screws to our coalition government hippies.

Shawn

[Ken07AOVette]

Originally Posted by Sundancefisher

US is making billions off Alberta not having better access to tidewater. You bark but have no bite. You seem to be a businessman however know nothing about economics or running a business. You must of gone through many failed businesses since you seem to emotionally state companies should not make a profit when they sell to youI proved profit is reasonable. I proved Taxes are very high.without having a beer with you to walk you through the facts I fear your ability to judge is impaired. You refuse to accept facts. You refuse to acknowledge reality.No company is making unfair rates of return. None. In fact almost all oil companies are struggling compared to most business sectors. I can prove I am right because if you were right we would all be heavily invested in these mysterious companies rolling in unbelievably unfair profits.

I know nothing about running a business? Gone through many failed businesses? Same one for over 30 years, sport.
You have gone beyond utter arrogance to completely ignorant now.
I had a reply for when you went into your ignorant shot against my parents for price fixing and your crap about knowingly breaking the law and statute of limitations, but knew it would fall on deaf ears because you would never believe that prices are set by head office, not the Manager of the station.
You should stop your crap now. It is beyond tiring and boring. And I am getting real tired of your insults and insinuations of legal wrong doing.

[gevarm guy]

They jerk the price to 1.30 a liter so when they move it back to 1.18 you feel like your getting a deal, when in fact your still getting bent over...

[CBintheNorth]

Originally Posted by Sundancefisher

US is making billions off Alberta not having better access to tidewater.

You bark but have no bite. You seem to be a businessman however know nothing about economics or running a business. You must of gone through many failed businesses since you seem to emotionally state companies should not make a profit when they sell to you.

I proved profit is reasonable. I proved Taxes are very high.

Without having a beer with you to walk you through the facts I fear your ability to judge is impaired. You refuse to accept facts. You refuse to acknowledge reality.

No company is making unfair rates of return. None. In fact almost all oil companies are struggling compared to most business sectors.

I can prove I am right because if you were right we would all be heavily invested in these mysterious companies rolling in unbelievably unfair profits.

I'm having trouble understanding the bolded text, as I'm sure many are.
Can you explain to the group what you mean by that?

[Sundancefisher]

Originally Posted by Ken07AOVette

I know nothing about running a business? Gone through many failed businesses? Same one for over 30 years, sport.
You have gone beyond utter arrogance to completely ignorant now.
I had a reply for when you went into your ignorant shot against my parents for price fixing and your crap about knowingly breaking the law and statute of limitations, but knew it would fall on deaf ears because you would never believe that prices are set by head office, not the Manager of the station.
You should stop your crap now. It is beyond tiring and boring. And I am getting real tired of your insults and insinuations of legal wrong doing.

Hmmm. Again. You spout insults and insinuations against an entire business demographic yet have ignored facts.

Arrogance and ignorance are interesting words thrown from a glass house.

Some businesses have the price set by the brand company. Some are set by the individual retailer.

Neither scenarios suggest collusion nor price fixing nor gouging. You say you own a successful business. Maybe your just insular to general business concepts then.

[Sundancefisher]

Originally Posted by CBintheNorth

I'm having trouble understanding the bolded text, as I'm sure many are.
Can you explain to the group what you mean by that?

Sure. Internet blogging can miss lots into why he doesn't get certain business principles. A face to face chat over a beer can help one sleuth that out.

[dodger]

http://business.financialpost.com/co...ergy/oil-shock

Looks like we are in for some more hurt at the pumps. But - If we could get our oil to tide water !

Dodger.

[Sundancefisher]

Originally Posted by dodger

http://business.financialpost.com/co...ergy/oil-shock

Looks like we are in for some more hurt at the pumps. But - If we could get our oil to tide water !

Dodger.

Yikes. Probably another reason to not own a motorhome and expect to drive long distances.

[Don_Parsons]

I feel for you folks who don't get commercial construction fleet price for oil and fuel products.

Even our prices have jumped a bit.

Nothing major since we stocked up last summer way below the market value.

The gas held up good threw the winter as we will do a 20% refresh.
The diesel did realy good.

Don

[Big Grey Wolf]

Sorry Sundance, if US company can sell gas for 68 cents a liter and still make a decent profit please do not BS us that Alberta Big Oil companies need to charge $1.30/liter even with the enormous 5 cent/liter carbon tax.

[Sneeze]

Originally Posted by Big Grey Wolf

Sorry Sundance you are full of sh--. If US company can sell gas for 68 cents a liter and still make a decent profit please do not BS us that Alberta Big Oil companies need to charge $1.30/liter even with the enormous 5 cent/liter carbon tax.

I am curious what Alberta Big Oil companies I should be buying stocks in that are making crazy profits off selling you gas.

Honestly? I'd like to know. The companies are all public, you can look at the financial statements. I want to know which one is raking it in on gouging consumers so I can join the gravy train.

[Sundancefisher]

Originally Posted by Big Grey Wolf

Sorry Sundance you are full of sh--. If US company can sell gas for 68 cents a liter and still make a decent profit please do not BS us that Alberta Big Oil companies need to charge $1.30/liter even with the enormous 5 cent/liter carbon tax.

I like everyone else wants stuff for free...however I am also reasonable in my expectations.

Okay. Testing time. You put a few numbers down however are missing some critical numbers in your positioning statement.

How much is the wholesale cost of gasoline in Calgary?

All in...how much tax is their on today’s $1.30/litre price?

I know you can’t find a company making an unreasonable rate of return so I won’t ask.

Please answer the first two.

Cheers

Sun

[HVA7mm]

I found a pretty good write up on the fuel price influence chain in the US which is similar to the market trend in Canada. The NYMEX has a much larger effect on the price of fuel than refiners/retailers. Anytime you have speculation in the futures market, it can cause instantaneous/accumulative increases in pricing of any commodity be they gold/grain or petroleum products. Below is a bit of a long read, but I found it quite interesting.



But, before we delve into wholesale rack fuel pricing, let’s recap with a few glossary terms:

NYMEX: This is the first step in our fuel pricing structure – a mostly electronic platform exchange, where paper contracts of fuel are bought and sold for a period in the future. Hardly any physical barrels ever change hands.

It’s a transparent market, giving buyers and sellers a visible starting point for fuel supply agreements.


Spot Market: Spot purchases refer to commodities physically traded either on a pipeline or via barge or cargo. You negotiate for the fuel “on the spot” at the refinery gate or at one of the seven major refining hubs.

Spot transactions are large – pipeline deals are a minimum of 5,000 barrels (210,000 gallons) up to 50,000 barrels (2.1 million gallons).

Basis: Spot transactions for refined products are not done on a “flat price” basis (i.e. $2.00/gallon). They are done as a relationship to a related commodity on the NYMEX. That relationship is called a “differential” to the “cost basis,” which, in this case, is the NYMEX.

Example: $1.35 (NYMEX RBOB basis) +15cts (Differential) = $1.50 (Actual GC Spot price)

Why Is This Important?

NYMEX prices move up and down due to domestic and global influences. NYMEX price moves, in turn, influence the spot market because:

NYMEX cost basis+/- basis differential = Spot price
Basis differentials react to news as well. Gulf Coast spot differentials can “blow out” if there is, say, a fire at a Houston refinery. The differential to the NYMEX strengthens and spot prices rise independently of the NYMEX move.

The next link in the price influence chain is the wholesale rack. Spots have direct impact on rack prices.

What is a Wholesale Rack?

A rack is a fuel distribution point – usually along a pipeline – where fuel is supplied.

We call it a “rack,” because trucks pull up to an actual loading rack to receive fuel from their fuel suppliers. There are approximately 400 racks in the United States – 220 or so are on pipelines, and the rest are not.

They look like this:

Rack Transactions Are Much Smaller Than Spot

Unlike spot transactions, which, as we noted, are above are 10,000 – 50,000 barrels, these are typically “truck and trailer” quantity, or approximately 8,000 gallons.

Who Pulls Fuel from a Rack?

Jobbers (or distributors, companies who resell fuel, for whom fuel is a revenue center)
Retailers
End Users
Some of these customers own their own trucks to transport the fuel or they may hire common carriers to do it for them. They either take the fuel to their own bulk storage facility or to their own retail outlets.

How Spot Prices Affect Rack Prices

Imagine you are a refiner. You produce gasoline at your facility and then put it into a pipeline to send “downstream,” where wholesalers, jobbers and end users buy it at a wholesale rack.

Now, imagine you have a fire at your refinery that causes you to make less mogas. How do you make up the difference? Remember, you, as the refiner, have fuel contracts that you have to honor. So, you’re in a real pickle – you need to make up lost production.

You have to go out and replace those barrels through purchases in the spot market.

Refiners view spot barrels as “replacement barrels.” They view spot prices (remember, NYMEX +/- differential = price) as “spot replacement costs” – what it would cost them on any given day if they had to go into the market to buy lost supply.

A refiner’s calculated spot replacement cost changes every day based on the movement of the NYMEX and the corresponding movement in the spot market. They track that fluctuating cost throughout the day – every day.

Refiners increase or decrease their daily rack costs based on the average daily change in their spot replacement cost. That’s why rack prices move up and down!

Note! It's worth keeping an eye on the spot market to see how rack prices will react to big moves.
ULSD Spot Replacement Cost in Action – From the Spot Market to the Rack Market

Atlanta is served by the Gulf Coast spot market.

Let’s say today’s average spot price (remember, NYMEX +/- differential = price) for Gulf Coast ultra-low sulfur diesel is $1.58/gal.

To get the diesel from the Gulf Coast to Atlanta costs a shipper approximately $.0325/gal. Various other charges amount to $.0125/gal. That means that the refiner’s total cost to get the diesel from their refinery to the Atlanta rack is $1.625/gal.


Now, let’s say a day later the cost at the Gulf Coast rises from $1.58/gal to $1.63 / gal – a 5ct gal jump. Using the same math as we did above, the “spot replacement” cost jumped from $1.625 / gallon yesterday to $1.675 today.

You can bet that refiners (who look at the spot market all day) are not going to “eat” those 5cts/gal. They are going to raise their rack prices by some, or all of it, to absorb the change in their market cost. That increase is going to take effect sometime around 6pm local time at the corresponding rack.

So, Can I Do This Math For EVERY Rack In The U.S.?

No.

Approximately 220 racks link back directly to one of the seven U.S. spot markets.

Rack markets such as Salt Lake City, Boise, Cheyenne, as well as locations in Kentucky and Tennessee do not tie cleanly to a spot market, because they don’t sit directly on a pipeline.

These markets have their own unique economics that refiners consider when adjusting rack prices. Fuel has to be moved via alternate methods (trucking, water) from one rack to another.

Some markets (like Baltimore) can even be tied to two different spot markets.

But refiners chart most racks back to one of the seven spot markets, using that simple spot + freight + other equation.

5 More Things to Remember About Racks

The only charges included in a rack price are the charges that are incurred transporting the fuel from the refinery to the distribution rack.
Rack prices do not include taxes or freight charges to carry the fuel from the rack to the retail station.
The products sold at the rack include most grades of gasoline, distillate, biodiesel, pure ethanol and, in some cases, jet fuel.
Propane is sold at racks that are different from refined products. And....
5. Most importantly, there is no such thing as “just gasoline” or “just diesel.”

Let's Discuss...

Imagine walking into a Baskin Robbins and just asking for “ice cream.” The server will look at you like you’re nuts. What kind of ice cream?

It’s the same deal with fuel – there are now “31 Flavors” of fuel sold at the rack. Fuels vary depending upon the rack and what fuels are mandated in that state or county.

For example, many parts of the United States have been deemed particularly high in pollutants – those areas are deemed “non attainment” and are required by the EPA to have “reformulated gasoline.” That’s a special flavor.

Spot replacement costs vary depending on the fuel. So, to truly anticipate rack price changes accurately, it’s critical to know which fuel is required in your market, so you know what spot market to keep an eye on.

Having a Fuel Spec Book is critical, especially if you buy, or sell fuel in multiple geographic areas. That’s because fuel is not “fungible,” meaning there’s little or no interchangeability in the market.

Let’s Recap!

There are about 400 racks in the United States, where jobbers, retailers and end users pull truck-sized fuel volume to take to storage facilities or retail outlets.

Price changes, which go into effect at 6pm each day, are based on “spot replacement costs,” meaning spot + freight + other costs.

It’s critical to know what type of fuel is required in your particular region so you know what spot prices to track as you keep an eye on spot replacement costs – not to mention making sure you are pulling the right fuel at the rack.

We are almost at the end of the fuel influence chain. Our journey will wrap up with the retail market.

[Don_Parsons]

It is wize for us to play into our own futures that helps "smooth" out the lows and highs.

It's called putting away the goods when they are at low prices like last summer.

Stock pile when the price is right, then subisdize these over inflated times with stuff from the cooky jar.

Here is our brake down.

Stock pile gas that slowly brakes down over the year,,, then we blend 20 or 50% with new fuel so it burns nice.

We have gas and diesel from 7 years ago that is still ok so long as we filter and blend as needed. The trick to store today's crappy fuel is keep the tanks topped off so nill for air gets to it,,, this slows down the "milking" or brake down process that occur in todays fuels.



So with fuel at the high $X's blended with fuels at the low $X's = frugal X's when it's needed.

Stock pilling fuel has been around for years,,, one only needs to drive around to see all the huge fuel tanks threw out North America.

Large companies started doing this back in the 60's,,, now we get commercial fleet price and/or buy futures for our farm or commercial operations.

We all know how much energy we need each year, so it might be wize for those of us that choose to put away for a rainy day.

Not sure how most folks role, but we've had good success planing ahead for times like this.

Just sharing an idea that might work for those of us that put on the miles,,, that way the market swings don't affect our end dollars over the long haul.

Don

[Map Maker]

Originally Posted by Sneeze

I am curious what Alberta Big Oil companies I should be buying stocks in that are making crazy profits off selling you gas.

Honestly? I'd like to know. The companies are all public, you can look at the financial statements. I want to know which one is raking it in on gouging consumers so I can join the gravy train.

Shell.
When the downturn hit, their upstream side was down -300%.
They have control of pricing so they made it so they made +300% on their downstream side.
Its all in their financial statements. Who is going to fight them? Its all legal loopholes and gray areas.

Another one is Schlumberger. At the peak of the downturn, they laid off 2000 workers citing low price of oil. Next day, they did a dividend increase of 20%.

Im on the gravy train. I sold all my oily stocks and bought Shell at the downturn. I made 5% in dividends waiting and now it is above what it was before the downturn.

Cant beat them , might as well join them. But its not right.

[Sundancefisher]

Originally Posted by Map Maker

Shell.
When the downturn hit, their upstream side was down -300%.
They have control of pricing so they made it so they made +300% on their downstream side.
Its all in their financial statements. Who is going to fight them? Its all legal loopholes and gray areas.

Another one is Schlumberger. At the peak of the downturn, they laid off 2000 workers citing low price of oil. Next day, they did a dividend increase of 20%.

Im on the gravy train. I sold all my oily stocks and bought Shell at the downturn. I made 5% in dividends waiting and now it is above what it was before the downturn.

Cant beat them , might as well join them. But its not right.

What's not right? That they should operate at a loss? That won't work. But most people own stock in RRSP's, mutual funds etc. Plus those companies pay taxes, salaries that are taxed, royalties etc.

Good stuff.

[Map Maker]

Oil is a resource that belongs to the people of Alberta first.
We grant access to that resource for our benefit not for CEO profit.

We wont ever see eye to eye, and thats fine.

[Iskra]

Originally Posted by Sundancefisher

What's not right? That they should operate at a loss? That won't work. But most people own stock in RRSP's, mutual funds etc. Plus those companies pay taxes, salaries that are taxed, royalties etc.

Good stuff.

You own a gas station or are heavy in oil stock. Filled up over a 100ltr at Costco last night at 112.9. This morning Costco was at 115.9 so I went there with my wifey mini van and couple of jerry cans for the boat. Gas tanker was filling underground tanks, fresh delivery. All big guys were at 131.9. I hope Costco is not selling water from N Saskatchewan River.

[Sundancefisher]

Originally Posted by Map Maker

Oil is a resource that belongs to the people of Alberta first.
We grant access to that resource for our benefit not for CEO profit.

We wont ever see eye to eye, and thats fine.

We do see eye to eye. As an Albertans I have an ownership share in that resource.

As an Albertan I want to see a return on that resource.

Crown company can't do it. Too much waste. It has to be private.

So what do we do to ensure a return.

Firstly we auction the rights off in a highly competitive secret bid process.

Companies look at the risk and potential reward and try and bid to win. We Albertan pocket that money risk free. Don't have to spend a dime. Called the crown land sale bonus. Some areas of the world this is just a capital spend commitment. In Alberta it is in addition to any capital spend needed.

Now the oil company has to risk millions to drill a well. Some wells are dry holes. Some wells have some oil but not enough to pay back the cost and hopefully most meet the initial expectations set out in their bid economics.

Now the company needs to risk Alberta jacking the royalty rate.

Now the company has to risk the commodity price flux.

Now the company has to deal with pipeline takeaway capacity.

Now the company pays royalties and taxes.

Meanwhile I risked no tax dollars. Companies operate leaner and meaner.

I am good with the process.

Keeping it in the ground means huge lost time value of money. Leaving it the ground does risk another future power source negating that value.

[hal53]

Originally Posted by Map Maker

Oil is a resource that belongs to the people of Alberta first.
We grant access to that resource for our benefit not for CEO profit.

We wont ever see eye to eye, and thats fine.

Gotta love the "oil belongs to all Albertans" comment. Then go ahead and drill a well and fill up your gas tank...that's how it works...right?

[Sundancefisher]

Originally Posted by Iskra

You own a gas station or are heavy in oil stock. Filled up over a 100ltr at Costco last night at 112.9. This morning Costco was at 115.9 so I went there with my wifey mini van and couple of jerry cans for the boat. Gas tanker was filling underground tanks, fresh delivery. All big guys were at 131.9. I hope Costco is not selling water from N Saskatchewan River.

No. I don't own any direct oil company stock. Maybe in a mutual fund however I don't look that closely. Not the best investment in my opinion. Too cyclical. Way to hard to make money. Way too many risks/variables.

No I don't own a gas station. An environmental nightmare for some. Poor profit for others. Need a really good convenience store location so really I would just lease for that benefit.

I am the President of IWantToFish.com. http://www.iwanttofish.com/app/dkfish/

Struggling yet fun business. Has potential. Looking for a partner. Hopefully one who can program upgrade ideas.

If I find cheap gas and need gas I buy gas. Otherwise when I need gas I buy gas. I also mostly take transit.

[Don_Parsons]

Be glad we're not paying for gas in the UK. LOL

It's still a good deal since it cuts down on the manual labour thing

Don

[Badgerbadger]

Originally Posted by hal53

Gotta love the "oil belongs to all Albertans" comment. Then go ahead and drill a well and fill up your gas tank...that's how it works...right?

For your edification on this topic:

http://www.history.alberta.ca/energy...ip.aspx#page-1

[Sundancefisher]

Originally Posted by Badgerbadger

For your edification on this topic:

http://www.history.alberta.ca/energy...ip.aspx#page-1

So?

Alberta Crown owns 81% of all mineral rights.

And?

Why does Hal need a moral or intellectual improvement

😂

[hal53]

Originally Posted by Badgerbadger

For your edification on this topic:

http://www.history.alberta.ca/energy...ip.aspx#page-1

You really need to get a life other than sitting on AO waiting for me to post something..........

[Badgerbadger]

Originally Posted by Sundancefisher

So?

Alberta Crown owns 81% of all mineral rights.

And?

Why does Hal need a moral or intellectual improvement

😂

His comment intimated he was ignorant of that.