Have you noticed the cyclic trend in gasoline pricing?
There appears to be a trend between the price of gasoline and your local economy. There appears to be a firm relationship between gasoline prices and the general cost of living over a payday length period.
I first started noticing gasoline prices going up in anticipation of a formal holiday. It was odd to me gasoline prices went up before the holiday, and not after high holiday demand reduced the gasoline supply.
Here is what I think goes on:
Is there a formal holiday coming up?
In the past [years ago] gasoline prices went up on Friday before the long holiday weekend. My thinking was people leaving town for the weekend filled up their tanks on Friday and Sunday, which would drive up gasoline prices due to supply and demand. As years went by, I noticed gasoline prices going up on Thursday instead of Friday.
At the same time television news reporters were asking Gas Station Owners, ‘Why are gasoline was going up on Thursday?’ The pat answer was, ‘People are getting smarter, and filling up their tanks on Thursday instead of Friday.’
The fallacy is when gasoline prices go up is we blindly accept gasoline prices going up in anticipation of demand. We pay more for gasoline that is already at the station.
Is Fall and Winter weather warmer than the seasonal average?
If the weather is warmer than average for a period, there is a trend of gasoline prices going up.
I am not sure how many days weather has to be warmer than normal. I am guessing at least two weeks – the period between paychecks.
When Fall or Winter weather is warmer than normal, we do not pay as much for heating our homes. We have extra money to pay more for gasoline.
Is Summer weather cooler than the seasonal average?
If Summer weather is cooler than average for a period, there is a trend of gasoline prices going up. I am not aware of how many days weather has to be cooler than normal, or how much cooler.
When Summer weather is cooler than normal, we do not pay as much to keep cool. We have extra money to pay more for gasoline as utilities are low.
Is it early summer?
Early Summer is one of the most worn out excuses for gasoline prices rising sharply. It is summer time and everyone is going on vacation and driving more so there is less gasoline to meet the demand.
When early summer arrives, utilities are at their lowest point for the year. This time of year we can use extra money for our pared down driving vacation. We do have extra money to pay more for gasoline rather than vacation enjoyment.
Are food prices low right now?
If food is less expensive than average for a period, there is a trend of gasoline prices going up. This is a localized trend however. In some parts of the country food prices seldom go lower.
When food costs are lower than normal, we can eat for less, or eat better quality food. We do however have extra money to pay more for gasoline if we eat the same foods we always eat.
Have gasoline prices remained low for a period of time?
When gasoline prices remain lower than average for a period of time, get ready for sharp increase in gasoline pump prices. Suddenly demand will be outpacing supply.
The usual excuse is, China, India, or other heavily populated country suddenly has more drivers on the road and demand is outpacing supply. No explanation given of how these new drivers could afford cars and extra money to buy more gasoline.
This was a time we could pay off bills we accrued over the year. Instead we have extra money to pay more for gasoline.
Who crunches what numbers?
It may be true Big Oil Companies pay a fleet of carpet dwellers to crunch numbers on the daily cost of living in differing areas of our country.
I expect these cost indicators to gasoline price adjusting takes some serious computation. Several variables are compared to determine how much gasoline prices should rise. In other words, how much more we can afford to pay in the short term for gasoline. I am guessing at least a two week to three period – almost the time period between paychecks.
What is the correct ratio of low verses high indicators against short term cost of living? I do not know. Big Oil companies never seem to miss though. They are always on winning side of price adjustments, and always upward price adjustments.
I do know that a ball park formula should be fairly easy to reverse engineer. Increases in gasoline prices are weighed against various markers of area economies. If more markers go down than up, gasoline prices go up by that approximate amount.
Do Big Oil Companies miss profit expectations?
I am not a follower of stock prices of Big Oil companies. In fact I do not recall Big Oil companies ever making the news, except for two reasons.
- There was an oil based catastrophe of epic proportions
- Record Profits were announced
Is this my attempt at humor?
You might think this is a satire type of post, or maybe as usual I am seeing things where they do not exist. It may be I am. It may also be we are being scammed, and we sit around like sheep waiting for the next shearing.