Somethign else interesting. When Trump took office and relaxed the regulations on oil, gas prices in HI didn't drop quickly. In fact, it took about a year or more. Some say it's because gas stations buy in advance and the prices agreed upon cannot change with the market. So the stations paid for higher priced gas.
But yet, it took less than a week for the gas prices to increase due to the Iran attacks.
Maybe there's a clause that prices can go up at any time for X reason, but cannot drop for X reason.
Can anyone provide input?
Do some reading on the commodities markets and how prices are set for contracts based on a lot of variables, making them very risky investments -- lot of unknowns.
trading oil futures usually follow a 30-day cycle. Without even owning the oil. you can sell contracts to buyers such as refineries or oil/gas companies. The price you negotiate in the future hedges the price against unexpected changes. So, for example, if you offer to buy 1 billion barrels of crude sweet oil from me on April 15th at $90/bbl, you're protecting against the oil being more than $90 on the expiration date, and i'm speculating the price will be less than $90. If it's less, I buy at whatever the market price is -- let's say $85. That means i just made $5 per bbl profit x 1 billion bbls = $5B. But, if the war in Iran causes a spike in prices, say $100/bbl, then the seller has to buy it at a $10/bbl loss, creating a $10B loss on 4/15.
So, it's not that there is a massive amount of oil being purchased 3 months ahead of selling it at the pump. The contracts allow trading of oil that has yet to be pumped out of the ground and shipped tp market.
Then there's the capitalistic concept of competition. If the Middle East oil prices rise, oil from S. America or Japan will rise due to an increase in demand for their comparatively cheaper oil. HI is more tied to Japan suppliers than the ME.
None of this would matter now if Biden hadn't canceled the pipeline projects Trump started in his first term.