Lowering gas price futures will probably not be seen at the pump

From Bloomberg:

Gasoline futures will average $1.40 a gallon during the summer, a 17 percent decline from May 15, according to surveys of five analysts by Bloomberg. Refiners are finishing seasonal shutdowns to increase production just as the global recession reduces oil demand by the most since 1981 and U.S. imports rise.

Bets that gasoline will fall below $1.40 by May 26 have risen almost 10-fold in a month on the New York Mercantile Exchange. While a drop would hurt profits at Valero Energy Corp. and ConocoPhillips, the two biggest U.S. refiners, it would do little to help consumers. The Energy Department forecasts pump prices of $2.21 a gallon on average this summer, little changed from today.

-snip-

Gasoline output should increase 3.7 percent this summer, more than twice the growth in demand, as refiners take advantage of wider profit margins, the EIA said.

The government anticipates margins of about $12.60 a barrel for April through September, compared with $8.40 a barrel last year, and refiners will increase rates to capture the higher returns, said Doug McIntyre, a senior Energy Department oil market analyst.

One other highlight I wanted to mention:

- Refiners reduced production to its lowest level in 17 years (other than for hurricanes) to drive up profit margins


http://www.bloomberg.com/apps/news?pid=20603037&sid=a3rxVC6U4CeY&refer=home

So yeah, we will not be seeing a 17% drop in price this summer as companies will attempt to take advantage of the wider per barrel margin as compared to last year. Wonderful.

This news could help push popular sentiment to support Obama's plan to rescind the tax breaks the oil companies have been enjoying!

Or even better, let's have a conversation NOW about a windfall-profits tax plan! Our country is hurting and the oil companies need to pitch in and do their share! :D

same as always

Costs are down = Lower prices (but held above real value) = massive profits
Costs are up = Higher prices (but raised faster than costs) = massive profits

The derivatives players are in the market big time. We're fucked again.

Wheres the oversight?

I predict that just like last year, once the first storm enters the Gulf, we'll be flirting with $3.50-4.00 here in Florida again