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dan45mcc

Price Spread about to Narrow

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unfortunately (for us e85 users) when gas goes down, the consumption of gas goes up, causing an increase in demand for ethanol for e10 blending, which causes ethanol prices to go up...

 

I prefer to see gas prices going UP, causing a decreased demand for gas, therefore a decreased demand for ethanol for e10 blending, which causes ethanol prices to go DOWN...

 

Not only does this encourage more to try e85 and mid level blends (for the obvious cost savings), but it also should lead some blenders to widen their e10-e0 spread, so that people should be able to see that "if it weren't for ethanol, fuel prices would be higher..."  Instead they keep the spread the same, pocket the difference, and blame ethanol for the high prices...

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This is the bottom line on how the average person decides to use gasoline or e-85, PLAIN AND SIMPLE. This does not look good. I will go back to being all alone at the pump with no fellow E-85 users to talk to  :(   

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Doesn't the gas price tend to go up as we get to summer?  I don't think we are looking at a long term drop in gas prices here.  The way I look at it, we are already down quite a bit from 1-2 years ago when gas spiked, I don't really see it trending down much further.  With the turmoil (no pun intended) in the middle east and Russia...  I would think that prices would be edging up as people sought to lock in prices BEFORE they spiked.

 

If I was a betting man (which let's face it, is all trading in commodities is)... I'd be willing to bet that with prices going down, and the instability in the market, buyers will be buying up this even cheaper oil, driving up prices, and then raking in profits when instability hits and they can sell at the inflated prices.

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Something is going to cave, simply put. This is in fact the time of year when tar sands prices trend upward. We still have E10 around $3.60 here, and I just saw that prices are spiking in Kentucky and Illinois. You know this is the time of year when refineries "shut down" for "maintenance", and when we switch to the summer blend of paint thinner (cough) gasoline. Last year, we had several pipelines in the Midwest experience supply disruptions, a couple of refinery fires in Illinois, and refinery maintenance last summer in May. We peaked at $4.299 for regular benzene in mid June. When we had a random, no "holdouts" hike on Saturday, June 1st. It was an awesome early birthday present to have paint thinner at $4.15 and have E85 at $2.99. I got more full of myself than I had ever been!

 

Trust me, when the weather warms up, you can bet gasoline will be going up with the temperatures. Remember, we're still only 2/3 of the way through March.

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