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100 low lead prices


nels

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Just that unfortunately it’s at a price the market will bear. 87 regular is still too high at $47/barrel.

 

It was about this time last year that the refinery in Canada gave us this story about the fuel having conductivity issues messing with fuel senders. The “issue” was resolved and we haven’t seen a change since the Dec 27th.

 

 

 

Sent from my iPhone using Tapatalk

 

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One part market pricing...

The other part is production time, and inventory...

Automotive fuel price is based on a recent barrel of oil price converted quickly to gasoline and delivered to the fuel station in weeks...

Aviation fuel takes months to go through the same process.  So your raw material is based on the price of a barrel of oil that was purchased months ago...

Have you seen a graph of the price of a barrel of oil lately?

There is quite an oddity in the oil market lately. Lots of production going on, and a possible slowing of the world’s economy... a tug between supply and demand... some think it is over supply, others think world demand is dropping off...

While you are looking, the stock markets are also dropping as if they are attached to the price of oil...

For additional info... look up the price of a barrel of oil from the North Sea. This is a traditional starting point for pricing gasoline raw materials.  There is also gasoline contracts called RBOB... these are an interesting way to get a view of gas prices a few weeks in advance...

Nels, see if this is recognizable... a one year chart, of what I think is a gallon of gas, wholesale, prior to shipping... NJ gas price at the pump is about 2X the RBOB price... including all the taxes that go with it...

The important part of the graph is the price falling off the map as of the first week of October...

In other news, the federal reserve raised the overnight interest rate by a 1/4 of a percent...  important to know if anyone is going to be getting a loan soon... sooner is going to be better than later, as the interest rates are expected to be rising through next year...

 

PP thoughts only, not a world economist or fuel expert...

Best regards,

-a-

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I got my hands on 460 gallons last week.

was $3.40 Gal.

The Supplier said same thing as Landscaper.

100LL is a very small market, but a high demand “willing to pay” Market.

I didn’t get a very good feeling that it would be falling in price anytime soon.

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There is lots of spensive fuel still sitting in tanks.   Have to use that up to get some cheaper fuel to sell.  So it will depend on how long it stays low.  I have got to work on parts of the value chain through the refinery, but the key parts of the chain are pretty well secured.

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As has been said before, Auto gas pump prices are changed daily according to the spot price of gasoline. Avgas pump prices are set when the fuel was purchased. 

In a falling price scenario, people will avoid high priced fuel, so it could take a long time to empty the tank so the seller can buy cheaper fuel. In a rising price scenario, the tanks of cheap fuel get emptied quickly so the prices go up way faster than they go down. 

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A corner auto gas station will go through 4-8 thousand gallons a day, a busy one near a freeway even more.  An airport tank holding 2-4 thousand gallons might be refilled a few times a year so prices are much stickier.  Since 100LL is a specialty fuel without alternatives, there is no substitution effect so prices are much slower to respond.

If crude is sub $50 for a year, then we should be 100LL ~ $3.50 but it will take a while.

 

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37 minutes ago, Immelman said:

I used to pay more attention to this in prior years. What I noticed is that avgas does follow crude (and car gas), but due to the lower volumes and time between deliveries to a typical GA airport, its price increase or decrease typically lagged crude by about 2 months.

I think along your thought pattern but passenger car gas prices have been down for awhile, way more than two months, and they are continuing to drop. Aviation fuel around Cincinnati seems to be going up. Sporty’s (I69) is $5.45/gal and most of the small airports in the area are all pushing $5/gal with LUK and CVG both well over $6. Just looking at gas prices on FLYQ around the country there seem to be fewer airports selling under $4/gal. I do hope they start to trend down but I don’t see it yet.

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9 hours ago, INA201 said:

Just pulled this.  Looks like Midwest is seeing a drop!  We are still at $4.60

 

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I would consider these to be more south than Midwest. The prices down there and Florida, Georgia etc always seems to be way less than the Ohio, Indiana, Illinois, etc, etc.

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On the other hand, be glad that you are not based at an airport with an FBO (hint: begins with the letter "S") who feels they are entitled to $7.57 per gallon of 100 LL, and has written their hangar and tie-down leases to require the Lessee to purchase "substantial amounts of fuel" from them as a condition of the lease.

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1 hour ago, whiskytango said:

On the other hand, be glad that you are not based at an airport with an FBO (hint: begins with the letter "S") who feels they are entitled to $7.57 per gallon of 100 LL, and has written their hangar and tie-down leases to require the Lessee to purchase "substantial amounts of fuel" from them as a condition of the lease.

Likely not enforceable due to vagueness. But they certainly can choose not to renew the lease.

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10 hours ago, markejackson02 said:

A corner auto gas station will go through 4-8 thousand gallons a day, a busy one near a freeway even more.  An airport tank holding 2-4 thousand gallons might be refilled a few times a year so prices are much stickier.  Since 100LL is a specialty fuel without alternatives, there is no substitution effect so prices are much slower to respond.

If crude is sub $50 for a year, then we should be 100LL ~ $3.50 but it will take a while.

 

I was at the airport Tuesday mid-afternoon.  The guy fueling my plane said he'd been pretty busy.  Already pumped over 300 gallons. 

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2 hours ago, nels said:

I think along your thought pattern but passenger car gas prices have been down for awhile, way more than two months, and they are continuing to drop. Aviation fuel around Cincinnati seems to be going up. Sporty’s (I69) is $5.45/gal and most of the small airports in the area are all pushing $5/gal with LUK and CVG both well over $6. Just looking at gas prices on FLYQ around the country there seem to be fewer airports selling under $4/gal. I do hope they start to trend down but I don’t see it yet. 

Perhaps it depends on the airport?

I use airnav to scan the prices close to my home airport. There are 4-6 fields that very consistently deliver the best prices. These are the ones I watch. They probably sell more avgas because of this and I would then expect them to be the first to reduce pricing with cheaper crude.... Then there are the very small, remote places with little traffic. I see these fields update their prices less frequently. As mentioned above, any big airport/big FBO, I just avoid all together unless the mission justifies it.

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I wonder if that sub 5 price in Medford is real...

Somebody had organized a special Mooney fly-in with extremely low 100LL pricing... 

Might have been DMax around 5 years ago... I think I remember @201er stopping by on of the first world tour flights he has... the Parrots accross America flight....  :)

I’m looking forward to the low prices to come...

If it is based on over-supply, I hope it stays this way for a long while... under-useage or lack of demand just isn’t as much fun.

Best regards,

-a-

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Also remember that most FBOs don’t mark on on percentage but they mark up on margin.  They might purchase at a 10% lower price this cycle than last cycle.  But let’s say that is 20c less per gallon.  They are still charging a margin of $1-2 per gallon.  They may increase their margin accordingly if there’s no local competition. Thus you’re still seeing $4+ at the pump  

There was some interesting article about the history of LL pricing strategies over the years some time back. 

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