Reuters reports that U.S. gas prices have returned to summertime price levels, north of $3 a gallon. With the cost of crude oil jumping 17 percent to more than $96 per barrel, the AAA figures three buck a gallon gas was overdue. "We are surprised we didn't hit $3 sooner,” admits spokesman Geoff Sundstrom. “Prices could go higher now that we are moving into the higher-demand season that coincides with Thanksgiving and the year-end holidays." The US government says gasoline prices rose to $3.01 per gallon this week; diesel fuel is at a record high of $3.30 a gallon. “If we stay at $95 to $100 per barrel crude,” Sundstrom said. “It wouldn't be out of the question to see $4 in some places.” Additional insight arrives via the US Energy Information Administration (EIA). In its Short-Term Energy Outlook the EIA predicts “crude oil prices are expected to remain high and volatile.” Ya think?
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They’ll come back down for the next election ;-)
remember when oil hit 40 dollars a barrel and they said it was because of tensions in the mid-east and that in case iran sunk an oil tanker or something then the price was worked in–why is it at almost 100 dollars now? things havent changed that much -we’re just getting hosed by the oil companies and refineries on the futures market-remember theyre making billions in profit a QUARTER,not year. used to be alot more oil companies in the early nighties so there was competition in the industry-now theres like five big ones and they seem to charge what the futures market wants and cooperate on price kinda like the airlines. they say now that the price will go up because of winter heating cost–i thought it went up because of the summer driving season? i know for a fact the refinery by me is paying canada less than 10 dollars a barrel for oil but charging the futures market price for the cost of gasoline it refines.
Stuntnun, nice post but it misses the mark in a few areas. Oil companies make billions in profit because they have hundreds of billions in sales. the government makes more from a gallon than Exxon does, and with worldwide demand at an all time high the real winners are those countries that not only have oil but are pumping it out and selling it.
We have lots of oil in Amerika, we just are not allowed to take it. Ask the enviromentalists about that. While we are at it, let’s ask them to OK building Nuke plants, how about a new oil refinery or 3, and forget about enthanol.
Funny how ethanol refineries get
“greenlighted” but oil refineres don’t.
ya i know but theyre making the best recorded profits in human history and are giving out weak excuses for doing it–i wish theyd just say if you can afford to drive that hummer around town we must not be charging enough. about the ethanol-wait till theres a major drought in the midwest like in the dust bowl and the price of ethanol sky-rockets- that will raise prices on gas and that means it will raise the price of every thing-and no way to use 100 percent gas in that case even if oil is cheap because the gov. has mandated the use of ethanol.
It’s not just tight supplies, refinery capacity, and rampant demand, add the oil traders, too:
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/04/AR2007110401753_pf.html
Traverse City Michigan gas prices are running $3.17 per gallon minimum – but we’re always highest in the state (after Beaver Island), ‘coz – well – the local distributors “Can” and “Do” charge what they please. 40 miles away, it is almost always 5 to 20 cents a gallon less. BUT there’s no price collusion here – the state says so. (You have to wonder how much money goes into their re-election campaigns, huh?). Yeah, it’s a “tourist” area here. Welcome to northwestern Michigan, bend over.
As for global oil prices, well, we’ve been warned and warned and warned since 1970 that we are going to reach peak oil (first, nationally – then globally) – we had the fuel crisis of 1973, then 1979, oil shocks in 1990 and of course we had 9/11/01. We’ve had at least 37 years to prepare – and what do we do as a nation? Buy 12 mile per gallon SUV’s so one person can drive to work in it, produce ethanol to add to gasoline and thereby use food production for SUV use (and waste it all – every single vehicle I’ve ever had since 1979 and tried E10 / gasohol in has obtained 7% to 20% LESS mileage than pure gasoline). In the meanwhile, Mexican peasants were rioting recently due to a 300% increase in the price of their staple food based on corn… As a Christian, I can’t see the typical American attitude towards ethanol use as anything but the sin of gluttony – which doesn’t have to involve only the over-consumption of food, you know.
Solutions at this point? As mentioned, we’re a third of a century behind the eight ball. As time progresses, it will be more and more difficult – if not impossible – to be able to afford the oil required because of the society we’ve literally built around the altar of oil AND develop viable alternatives (plural – there is no magic single replacement – that’s important to remember!)
Solutions may include the theremal depolymerization process invented in the US which can convert offal, sewage and waste into, essentially, light heating oil/diesel fuel (one refinery step away from gasoline); Bio-butanol from sugar beets (can be pipelined and has higher energy than ethanol); using hybrid technology (be it electric, kinetic or hydraulic) to “stretch” efficiency and waste less on all vehicles as well as capture kinetic energy from stopping or slowing the vehicle; purely electric vehicles; wind power; solar power.
Now, this might also “get your attention” my friends. (And to my friends here at TTAC, didn’t I mention “buy gold” and get mocked for my trouble by some?) How does $98 a barrel for oil sound?
http://www.bloomberg.com/apps/news?pid=20601012&sid=ay5g_cxanVBI&refer=commodities
In the meanwhile, I’ll have to get busy and re-adjust my household budget soon. I “only” calculate gas prices at $3.50 per gallon for my Prius.
Is it really that the refineries aren’t being approved more so than the oil companies bitching about the cost to build one? If they increase capacity, then they increase supply, which reduces demand, which lowers their profits. I think it boils down to more than approval – there hasn’t been a new refinery built in the US in what, 20 or 30 years?
As for nuclear power plants, I’m for those. Compared to what we are using now they are a relatively clean form of energy, although the byproduct is nasty.
$4/gallon. Just wait. $4/gallon, easy, everywhere, not just in California. I think it’ll be the norm by next spring. The food prices that have increased already because of higher demand for corn (thanks ethanol) will increase again with the shipping costs. Part of me hates it and is kind of freaking out, but my wife and I can afford it right now. Part of me is interested to see how many of these reality-denying SUV buyers still show up at the lots demanding something that can tow all their boats.
I don’t know, but the US is in for some Euro-style fuel prices, and this more than any advocacy movement will change American buying habits. Unless the stupid government steps in to give the oil company billionaires a few billion more dollars to stabilize prices, things are going to change around here.
“why is (oil) at almost 100 dollars now?
Because they’ve extracted most of the easy oil and nearly all of the super giant oil fields, like Burgan and Cantarell, are in decline. What’s left is:
Crude oil from rival countries like Russia, and going to rival countries like China,
Crude oil in dangerous places like Iraq and Nigeria,
Crude oil very deep underwater,
Heavy, sulfurous crude that takes more refining,
Bitumen/Tar sands/Oil sands that must be mined instead of pumped, and must be heated at high temperatures into synthetic petroleum before refining,
Kerogen/Oil Shale that must be expensively mined and separated from shale, then heated at high temperatures and distilled into synthetic petroleum before refining.
And two other reasons:
(1) We Yanks always forget, we are no longer the only customer in town. Demand from China, India, and Europe has gotten stronger over the last 10 years. We have to compete for every barrel of oil produced.
(2) The falling US dollar. Don’t forget, we import a lot of oil. It simply takes more US dollars to buy the same item from overseas. Just like German cars will cost more now, so will oil.
Simple supply and demand.
Supply is flagging (see also “depletion”), demand surging.
Add in the falling dollar (losing nearly a penny of value a week now), and I would not expect to see $4/gal average nationwide by next summer.
Thankfully I have reached a state of full independence from foreign oil for my daily driving needs. All I can say to my fellow Americans is “Keep eating those french fries!”
–chuck (BioDiesel Homebrewer)
http://chuck.goolsbee.org
Well thank God the LS600hL and Two-mode Tahoe will soon be saturating the automotive market to lessen the demand for oil.
Donal : the refinery by me that supplies most of my state uses tar/sands oil from Canada-thats what it was set up to refine and our prices here were always average to below average on prices at the pump pre- 2000–so the owner of the refinery can refine it at the going national rate because its set up for it,and i know when oil was 40 bucks a barrel the refinery was paying 4 dollars a barrel for the Canadian oil. when katrina hit our gas prices went up and we didn’t export gas from here to there because our gas blend was different,and we don’t import oil from the gulf coast to refine at this refinery so the prices should not have gone up but they did because they can. thats why i question why its at 100 dollars a barrel– i don’t believe there excuses for doing it.
stuntnun, a rising tide lifts all boats – and rising oil prices worldwide lift all oil prices.
Not that we want to hear it, but it’s what’s happening.
Look at it another way. A guy makes “widgets” and starts selling them locally for $4. He finds that “widgets” are in phenomenal need elsewhere, and that he can sell them for $6 and make extra profit, but as he does that he requires a new factory – which costs him money to build, meaning his extra profit is cut by 1/2. So he goes ahead, and locally starts charging $6 for his widgets instead of $4.
So the locals whine. But the locals don’t mind going to work at the widget factory and earn money.
Kind of like that. We whine about gas prices, but without oil – we’re totally screwed.
So the thing is – we need to find alternative energy. You know, like driving electric cars powered by wind or solar, and butanol from sugar beets, and see this for yourself http://www.changingworldtech.com – these brainiacs know how to turn offal, sewage and garbage into home heating oil / diesel fuel (bio-fuel, but chemically identical to “oil” oil). One refinery step away from gasoline.
As I’ve mentioned before, we’ve not exactly been Johnny on the spot when it comes to using our collective brains about doing this – it’s not like we weren’t warned with a shot across the bow in 1973, 1979, 1990, and 9/11/01, is it?
ajla: Well thank God the LS600hL and Two-mode Tahoe will soon be saturating the automotive market to lessen the demand for oil.
And things just keep getting better and better. Life is great!