“Fuel prices are INELASTIC when the price of oil goes down and ELASTIC when the oil prices go up.” (wink – nod) ~~ A Gelbert

https://wolfstreet.com/2022/03/06/crude-oil-wti-futures-go-bananas-briefly-hit-130-this-is-whats-happening-at-my-gas-station/

and 

http://renewablerevolution.createaforum.com/geopolitics/us-federal-reserve-notes-($)-world-reserve-currency-privilege-in-jeopardy/msg17364/#msg17364

Crude Oil WTI Futures Go Bananas, Briefly Spike to $130: And this  Is What’s Happening at my Gas Station

Speculators are reacting to other speculators who are reacting to whatever.

by Wolf Richter • Mar 6, 2022 • 247 Comments

SNIPPET:

The reason the price spiked isn’t because the US is suddenly running out of crude oil or anything, but because 🐍 traders and algos smelled an opportunity and jumped on it, and drove up the price of those futures, and it’s pure speculation, but that’s what futures trading always is.

The US doesn’t import much Russian crude and could do just fine without Russian crude – and that’s why the import ban is even proposed. And if some buyers in the US actually buy Russian crude, it’s simply another trade, like a gazillion others, but Russian crude is a big part of the gigantic complex global oil trade.



For example, California is cut off from other US producing regions because there’s no pipeline across the Rockies. It produces some of its own crude oil and imports some crude oil from Alaska, and imports crude from the rest of the world. The local refineries, such as those in the Bay Area, buy this imported crude and refine it and export large quantities of gasoline, diesel, and jet fuel to Latin America, which is a  huge profitable business.

Those exports of gasoline, diesel, and jet fuel also go to Mexico, which in turn sells a large amount of crude oil to the US. This is all part of the vast and complex global oil trade. Everyone’s doing it, and it is now getting thrown into chaos.

So far, Russian crude oil exports have been very carefully exempted from the sanctions, but there is such chaos around blocked payment systems and shipping involving Russia that buyers are reluctant to buy physical Russian crude and ship owners are reluctant to transport it. And futures traders are jumping all over this.

Now, the  “76” tourist-trap gas station here in my neighborhood in San Francisco – the brand “76” is owned by Phillips 66 – doesn’t sell crude oil, and it doesn’t sell futures either. It sells physical gasoline that has been in its tanks for some time. That gasoline came from the Phillips 66 refinery in the Bay Area, which took delivery of the crude oil well before then at prices that were set even before then – when prices were a lot lower.

Nevertheless, even as the cost of the gasoline in the tanks hasn’t changed, the price has been surging. And the difference is just extra profit.

Full article: 👀
https://wolfstreet.com/2022/03/06/crude-oil-wti-futures-go-bananas-briefly-hit-130-this-is-whats-happening-at-my-gas-station