Just to follow up on my previous post on the price of gasoline. Here is something else to think about. We all know that the volatility of the price of crude oil and the price of gasoline are closely related. This is because gasoline is refined out of crude oil. The weird thing is there are many other things that flow from refining towers. The main one I want to talk about is....motor oil. How many times have you gone into your local auto parts store and seen the price of motor oil change along with the market for crude? When I worked at a national auto parts store(which will remain unnamed), I didn't see any changes in the price of motor oil on a day to day basis. Why is this? Why would the price determination for two things coming from the same (crude oil), be so different? I don't know...I don't know...maybe it's just because it tastes so good....It just tastes soooo good.
Just some questions I ask myself before I fall asleep at night.
posted by Nicholas @ Tuesday, June 29, 2004
2 Comments:
could it be because we use more gasoline than motor oil? that means thier is an increased demand for gas. so the price of motor oil should stay more stable right? i don't know YOU are the one with an econ degree! ~sheva
good point nick, or should i call you dr. molina? wouldn't you think that there would be an incentive for a gas station to sell for as cheap as possible just to capitalize on the sheer volume of buyers? but i guess that assumes that many buyers are price sensitive like me. its possible though that there are more people who just look for the nearest gas station...do you think that companies are making more profit now because of the higher prices? i think they can only make a reasonable profit based on what they pay, it seems that there's too much of an incentive to undercut the competition (of course you have to make sure that there's always at least one open pump because people will choose convenience unless the price difference is very significant)...no funeral...erik
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