Skyrocketing Gas Prices

[ou48A]

ok... if it's inaccurate, why not discuss *why* you think it's inaccurate? -M

The author says that “It’s not because we have fewer barrels of oil. It’s not because demand is up.”

Crude is traded on a world market. World demand for crude is up.

The price depends on what world investors think the price of oil will be in the future. When world traders think oil will be high, they bid it up even higher. Traders around the world know demand for gasoline rises in the summer. They therefore start buying oil futures contracts in the spring in anticipation of that price rise.

There are costs differences in the different blends of gasoline at certain times of the year…The author write like he doesn’t believe so.

Refinery’s shut downs have a significant impact on price particularly when there are unscheduled shut downs.
The author says “that oil refineries have been running at or near capacity.” The current refinery utilization rate is at 88.0%. But it’s been as low as 81% this spring… That’s not near capacity.

The author says that “Oil company profits have not slumped during the nation’s Great Recession.”
While they have come back, it totally false to say they did not go down during parts of the “nation’s Great Recession”
Furthermore most of the major integrated oil companies profit margins that are close to the averages of many other major companies.


The author makes several inaccurate statements. The author lacks specific information and engages in way to many broad generality’s. Its lazy journalism and a low information article that only a low information reader would find acceptable.

There are many shorter term reasons that have helped cause the current price spike in the USA and around the world.
But the 2 biggest long term reasons why prices are rising in my view is the increases of world crude demand, and in the USA the drop in value of the dollar that was caused by the decision to massively increase federal government spending and borrow the money.

[sacolton]

double post

[Just the facts]

$4.00 would be hard to deal with. Already cut my Cox bill by eliminating TV. No more Netflix. Tightening the belt and eating out less. All these things I'm doing to save myself money is hurting the economy. I'm spending less to budget for gasoline.

I have been saying for a while now - if we want to keep the economic lights on we better find a way to live without gasoline.

[zookeeper]

OU48a, Come join us in the No Spin Zone. It couldn't have a simple answer? You know, Occam's razor?
Speed Trap: Big Oil Profits from High Gasoline Prices | Center for American Progress

[Bellaboo]

OU48a, Come join us in the No Spin Zone. It couldn't have a simple answer? You know, Occam's razor?
Speed Trap: Big Oil Profits from High Gasoline Prices | Center for American Progress

The article states how they are 'sitting on leases and not drilling'.....these are in the Gulf, very expensive to drill compared to the new technologies in the continental US. This is the reason Devon exited offshore drilling a couple of years back. They were ahead of the curve...

I don't blame them one bit for cutting the risk of off shore drilling for the less risky on shore drilling reward.

Not only that, that article bases its substance from politicians....you really want to go there ?

[Ginkasa]

I have been saying for a while now - if we want to keep the economic lights on we better find a way to live without gasoline.

I thonk almost anyone can agree that society needs to find a cheaper and sustainable alternative to gasoline. I think it is more difficult for an individual to abstain from gas right now. It depends on their situation.

[venture]

I thonk almost anyone can agree that society needs to find a cheaper and sustainable alternative to gasoline. I think it is more difficult for an individual to abstain from gas right now. It depends on their situation.

$4/gal gas and higher is definitely going to be a killer for a commuter/sprawl prone area like OKC - which Kerry has been saying for ages. Perhaps we need to push for it to get to $5-6/gal to force things to finally change. Of course at that time we might see an all out riot against the Oil/Gas industry coupled with another recession. There really should be a major push to have all new build cars utilized CNG or have a gas and CNG version that people can pick from.

[ou48A]

. There really should be a major push to have all new build cars utilized CNG or have a gas and CNG version that people can pick from.

The best solution IMHO would be to manufacture duel fueled vehicles that use both NG and gasoline.
The NG would work well for shorter trips and the gasoline for longer trips.

Perhaps this is where a government mandate is needed. For most, there are currently very few options for duel fueled vehicles.
A mandate to produce a few each year might be worth a look?

[Just the facts]

You can make a car that runs of dried leaves and dry leaves will start costing $3.95 per gallon equivalent. If CNG ever becomes common place the price will skyrocket (newsflash - that is what the NG companies want). The only real solution is to eliminate the distance between point A and point B that makes the car a requirement in the first place. Instead of living 3 miles from the Super Wal-Mart grocery store - live 3 blocks from the corner grocery store, and then who cares how much transportation fuel cost - it isn't needed.

[kelroy55]

I was in Ft Worth Wed/Thur and stopped at the gas station at Walmart. It was 3.25 there and yes there was a line but I was able to fill up fairly quickly.

[mkjeeves]

You can make a car that runs of dried leaves and dry leaves will start costing $3.95 per gallon equivalent. If CNG ever becomes common place the price will skyrocket (newsflash - that is what the NG companies want). The only real solution is to eliminate the distance between point A and point B that makes the car a requirement in the first place. Instead of living 3 miles from the Super Wal-Mart grocery store - live 3 blocks from the corner grocery store, and then who cares how much transportation fuel cost - it isn't needed.

Someone drove the groceries to the corner market, in a smaller, less efficient vehicle than at the super-center, where economy of scale is less and groceries cost more as a result...

The other option is to dramatically improve the well to wheel efficiency, (or tree to wheel, or fusion reactor to wheel.)

2013 Ford Tauras EPA Combined 23 MPG. Most of the electrics are around 100 + or -.

[king183]

You can make a car that runs of dried leaves and dry leaves will start costing $3.95 per gallon equivalent. If CNG ever becomes common place the price will skyrocket (newsflash - that is what the NG companies want). The only real solution is to eliminate the distance between point A and point B that makes the car a requirement in the first place. Instead of living 3 miles from the Super Wal-Mart grocery store - live 3 blocks from the corner grocery store, and then who cares how much transportation fuel cost - it isn't needed.

Transportation fuel is most certainly needed, which is why I would still care about it if I didn't own a car. The food that you purchase from the corner market was delivered there by some method of transportation. The food was transported off the farm or ranch to the distributor or the seller via some method. What is that method? Almost certainly a truck that runs on fuel. So higher fuel costs lead to higher food and product costs. Even if you don't own a car and never have to put gas into a vehicle, you're still paying for the high costs in every product you buy. So, we won't find a way to live without transportation fuel as suggested earlier.

Now, if most people moved to the urban core, where it was highly walkable and you didn't need a car, the demand for that transportation fuel, ceteris paribus, would drop, leading to a decrease in the transportation costs.

[Bellaboo]

2013 Nissan Altima 2.5 Litre 4 cyl. 38 mpg Highway - 31 mpg avg

[Dubya61]

2013 Nissan Altima 2.5 Litre 4 cyl. 38 mpg Highway - 31 mpg avg

Doesn't that seem kind of sad, though? We used to aspire to much higher mileage cars. It's like satisfaction at just going to the contest rather than winning it. Why are we still content with 38 hwy/31 avg?

[ou48A]

Vehicles that get better gasoline mileage help, but they won’t slow down the world’s increased demand for gasoline / crude that is much larger than what is saved.

If we want lower prices more production is needed along with better government fiscal responsibility.
A stronger dollar helps lower oil prices.

[LandRunOkie]

Someone drove the groceries to the corner market, in a smaller, less efficient vehicle than at the super-center, where economy of scale is less and groceries cost more as a result...

Time to crawl out from under that rock ... the local food movement started over 20 years ago. Places like the Earth in Norman grow their own produce.

[Stew]

I read not too long ago that oil based fuels was the USA's number one export for the first time in some number of years YET prices didn't drop as predicted by the drill baby drill crowd.

I never pay attention to gas prices and had no idea they had risen so much in the last few weeks and heck I just filled up yesterday. Hopefully they'll drop back down soon.

[ou48A]

I read not too long ago that oil based fuels was the USA's number one export for the first time in some number of years YET prices didn't drop as predicted by the drill baby drill crowd.

I never pay attention to gas prices and had no idea they had risen so much in the last few weeks and heck I just filled up yesterday. Hopefully they'll drop back down soon.

If you will consider how much higher prices would be without it, drill baby drill works and would work much better with lower prices if not for a government that slows massive energy development in several areas.

[king183]

If you will consider how much higher prices would be without it, drill baby drill works and would work much better with lower prices if not for a government that slows massive energy development in several areas.

Absolutely. Prices are assuredly lower relative to what they would be without the extra drilling. If we could get better, faster government approval of energy development, we could become the world's largest exporter of oil and gas within five years.

[Achilleslastand]

Absolutely. Prices are assuredly lower relative to what they would be without the extra drilling. If we could get better, faster government approval of energy development, we could become the world's largest exporter of oil and gas within five years.

If
If
If
Chugh
Chugh
Chugh
Its almost as if those in power do not care.

[mkjeeves]

Time to crawl out from under that rock ... the local food movement started over 20 years ago. Places like the Earth in Norman grow their own produce.

What would be your guess of the percent of sales produce is in the average purchase at the wal-mart super center JTF compared the local market to? I'm going to make a wild guess at less than 5% of sales.

I'm with you though, I posted some things about the local food movement awhile back.

http://www.okctalk.com/general-civic...tml#post623531

However, after 20 years, we have one place and it isn't local to most people in OKC. We're also in an extended drought. It's probably a good thing the majority of Oklahomans haven't relied on local produce. I'm not so sure we have the water supply. Are you?

BTW...what's going to be the energy cost to manufacture brand spanking new materials, truck it all in and build new housing for close to a million people in downtown when you move everyone from the burbs there? (Not to mention all the other resources that would be gobbled up.) Too much! There are better solutions.

[Stew]

If you will consider how much higher prices would be without it, drill baby drill works and would work much better with lower prices if not for a government that slows massive energy development in several areas.

Lets see... The USA has increased domestic oil production by over 25% in the last four or so years yet in the same time period gas prices have risen by well over 50%. I'm not saying you're wrong, I just have a hard time believing it.

[venture]

Sounds like several refineries are shutting down all at once. So its only going to get worse until they come back up. Seems to back up the notion that it isn't a supply (raw material) problem but a refining problem. At least we finally saw the permit for the first new refinery issued this year in 30 years. Now we just need to get more built.

Of course doesn't solve the long term problem. I'm sure I am not the only one that scoffs at the commercials of "amazing low MPG of 31" and the like. We've been at that level for years. We should be well on the way to 100 mpg by now or higher. Unfortunately it'll take a gov't mandate to happen and that'll never happen.

Lets see... The USA has increased domestic oil production by over 25% in the last four or so years yet in the same time period gas prices have risen by well over 50%. I'm not saying you're wrong, I just have a hard time believing it.

We could open ANWR and everything else up to drilling and I bet everything I have prices won't go down. Oil & Gas companies aren't interested in the prices going back down. It is like the cost of water. It is something that we essentially need to function and those guys know it. They will get whatever price they feel they need to get and no one will stop them.

[Stew]

Sounds like several refineries are shutting down all at once. So its only going to get worse until they come back up. Seems to back up the notion that it isn't a supply (raw material) problem but a refining problem. At least we finally saw the permit for the first new refinery issued this year in 30 years. Now we just need to get more built.

Of course doesn't solve the long term problem. I'm sure I am not the only one that scoffs at the commercials of "amazing low MPG of 31" and the like. We've been at that level for years. We should be well on the way to 100 mpg by now or higher. Unfortunately it'll take a gov't mandate to happen and that'll never happen.



We could open ANWR and everything else up to drilling and I bet everything I have prices won't go down. Oil & Gas companies aren't interested in the prices going back down. It is like the cost of water. It is something that we essentially need to function and those guys know it. They will get whatever price they feel they need to get and no one will stop them.

No kidding. The 1986 Chevy Sprint got 48 MPG. You'd think with all the advances in technology since then we'd have a plethora of gas powered cars that got at LEAST 48 MPG. Id-a-make-a-no sense.

I never heard of a Chevy Sprint. I wonder if they were good cars.


25 All-time Best Gas Cars by MPG - Energy Maters - Green Transportation

[ou48A]

Sounds like several refineries are shutting down all at once. So its only going to get worse until they come back up. Seems to back up the notion that it isn't a supply (raw material) problem but a refining problem. At least we finally saw the permit for the first new refinery issued this year in 30 years. Now we just need to get more built.

Of course doesn't solve the long term problem. I'm sure I am not the only one that scoffs at the commercials of "amazing low MPG of 31" and the like. We've been at that level for years. We should be well on the way to 100 mpg by now or higher. Unfortunately it'll take a gov't mandate to happen and that'll never happen.



We could open ANWR and everything else up to drilling and I bet everything I have prices won't go down. Oil & Gas companies aren't interested in the prices going back down. It is like the cost of water. It is something that we essentially need to function and those guys know it. They will get whatever price they feel they need to get and no one will stop them.

What you need to know is that prices wouldn’t go by as much if more drilling and energy infrastructure was allowed to be built and that our economy would be better off for it.
You / we need to know the real reason why prices go up and down over the long term.