Gas Prices 6/1/2026
- Jun 1
- 4 min read
And I John saw the holy city, new Jerusalem, coming down from God out of heaven, prepared as a bride adorned for her husband. And I heard a great voice out of heaven saying, Behold, the tabernacle of God is with men, and he will dwell with them, and they shall be his people, and God himself shall be with them, and be their God. And God shall wipe away all tears from their eyes; and there shall be no more death, neither sorrow, nor crying, neither shall there be any more pain: for the former things are passed away.
Oil is the basic lifeblood of an economy. It is the simplest energy source ever invented since it is fairly simple to drill, transport and turn into usable energy. Once it is broken into its different types of gas or diesel it becomes very transportable and then used by cars, trucks, trains, and planes. Oil is a nearly perfect energy source which is why it is the main source in the world.
Most people do not understand how oil is priced and are confused about the pricing of oil and gasoline. They tend to look at it through the prism of a retail product rather than a wholesale commodity. Commodities are larger bulk sizes such as trucks, railcars or in this case tanker loads.
Large wholesalers will gamble on which way the market will go on their commodity. If a wholesaler owns a tanker of oil at $80/bbl. and the market goes to $100 then he makes millions of dollars in profit. If he buys at $100/bbl. and it goes to $80 he loses millions.
Normally it is sold with a dollar or two profit which is still very large amounts of money since very few institutions can purchase tankers full and lots of times it is broken up into parts of tankers or tens of thousands of barrels which all are gambled or sold the same way since this is simply a way to distribute large quantities of different commodities.
Most the time it is just normal distribution where a commodity dealer will simply sell the tanker to a smaller user or users for a price which is agreed to by both parties. The smaller distributor cannot get the volume discount the larger dealer receives, which is how the dealer makes his money in most cases the market is not moving up or down.
Gas stations work the same way. If the owner thinks prices are going up he may buy more expecting to make more profit and if it is going down buys less so he minimizes his losses. This is why it tends to go up faster since he is trying to maximize profit while lowering it slowly to minimize losses. If the station across the street lowers his price he will be forced to lower since he owns high priced gasoline and the longer he holds it the lower he has to sell it for.
It is great when he buys it at $3/gal and the market goes to $3.50 which allows him to make his normal margin of 10 cents plus an additional 50 cents as he sells thousands of gallons. It is not as much fun when he has $5/gal gas and it begins to start falling and tries to drop it as slow as possible since he does not want to lose 40 cents to sell tens of thousands of gas.
He is a slave to the market and cannot sell it at $5 if everyone else is selling at $4.90 since the longer he holds it the lower the sell price likely becomes. This is why he will try to buy heavier when prices have a potential to go up and lighter when those prices are coming down to maximize profit and minimize losses.
This is why prices at the pump go up and down when people try to gamble up and down the oil pipeline. They all try to guess the market and most of the pipeline is guessing long term prices are going to go back to normal barring any surprises and it is a matter of when. This is why it has not gone to $200 per barrel and is hovering around 90 fairly stable.
At $90/bbl. it should lower gas at the pump after the higher priced oil goes through the pipeline. There will be a stabilizing down although everyone is trying to avoid losing money before the prices begin lowering since the distributors up and down the chain do not want to see a bloodbath which could happen once the strait is open and everyone sees prices dropping dramatically.
Hope this helps people understand what these people are talking about with the supply shortage and how it is distributed all around the world and to your tank. Everyone is a slave to oil prices including President Trump since it will do what it does depending on supplies and what people are expecting it to do. Most are expecting stable prices until the choke point is no longer choking and then it will likely go back to around $60 and gas station owners will be lowering their tanks.
Pray for President Trump
Comments