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<blockquote data-quote="greybeard" data-source="post: 1113708" data-attributes="member: 18945"><p>Retailers, especially in chain convenience stores with many stations, set their prices according to Rack Price, which is set by Oil Price and Information Service (OPIS) and that is a replacement cost----what it will cost to replace the fuel in the retailer's tank. A retailer "can" set a higher price (within state price gouging laws) or a lower price than rack price, it doesn't happen very often. Rack Price changes (assuming it doesn't stay the same as the day before) every day at 5:59 pm Eastern time when the New York market closes. Between 9 and 10am the next morning, the Rack Price from the wholesaler to retailer is available to the retailers. That 10am price is frozen for 24 hours. </p><p></p><p>OPIS sets the Rack Price according to the Spot Price, which is a trend of what is happening during that particular day's market across the country in demand and useage. It isn't the high of the day or the price at the end of the day's trading, but is an indicator what OPIS believes the market is going to do the next day and overnight. </p><p></p><p>Neither Rack, Retail, or Spot prices are set by the refiner or producer, any more than beef prices are set by the farmer or rancher. </p><p>Anyone here ever been able to go to a sale barn and set the price they will get for their cattle? No? Neither can the refiner. </p><p>Can't count the # of times I've had to explain this to various people in my lifetime.</p><p><a href="http://www.opisnet.com/about/methodology.aspx" target="_blank">http://www.opisnet.com/about/methodology.aspx</a></p><p><a href="http://www.opisnet.com/about/methodology.aspx#RefinedSpots" target="_blank">http://www.opisnet.com/about/methodolog ... finedSpots</a></p></blockquote><p></p>
[QUOTE="greybeard, post: 1113708, member: 18945"] Retailers, especially in chain convenience stores with many stations, set their prices according to Rack Price, which is set by Oil Price and Information Service (OPIS) and that is a replacement cost----what it will cost to replace the fuel in the retailer's tank. A retailer "can" set a higher price (within state price gouging laws) or a lower price than rack price, it doesn't happen very often. Rack Price changes (assuming it doesn't stay the same as the day before) every day at 5:59 pm Eastern time when the New York market closes. Between 9 and 10am the next morning, the Rack Price from the wholesaler to retailer is available to the retailers. That 10am price is frozen for 24 hours. OPIS sets the Rack Price according to the Spot Price, which is a trend of what is happening during that particular day's market across the country in demand and useage. It isn't the high of the day or the price at the end of the day's trading, but is an indicator what OPIS believes the market is going to do the next day and overnight. Neither Rack, Retail, or Spot prices are set by the refiner or producer, any more than beef prices are set by the farmer or rancher. Anyone here ever been able to go to a sale barn and set the price they will get for their cattle? No? Neither can the refiner. Can't count the # of times I've had to explain this to various people in my lifetime. [url=http://www.opisnet.com/about/methodology.aspx]http://www.opisnet.com/about/methodology.aspx[/url] [url=http://www.opisnet.com/about/methodology.aspx#RefinedSpots]http://www.opisnet.com/about/methodolog ... finedSpots[/url] [/QUOTE]
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