Ga$ Price How high will they go?

[Mike Trout]

My father has a patient who is a deep sea fisherman and gets his feul in Venezuela, last week he said gas, was 16 cents a gallon and disel was 14 cents a gallon, this was last week, now I go to my pump I am paying $3.79 for a truck that gets 10mpg I use $105 a week to go to work and back, somethin aint right here anymore. I herd gas will be 4 by memorial day and 7 by labor day.
I may just get a goverment job and have them pay for feul for almost anywhere I go. its nuts. but I aint telling ou all anything you dont know
Mike,

[opelbits]

If you are an oil company exec or stockholder, why would you want to do anything that would ease the problems causing the high prices. High prices equal high profits and as long as they are not allowed to drill in the gulf or in ANWR or build new refineries, they have a perfect excuse for NOT spending the profits on exploration and increased capacity. Wouldn't be surprised if oil company profits are finding their way into the coffers of the conservation groups fighting against new drilling and refineries. The oil companies were claiming for a while) that their profits were the result of the foodmarts and such, not their gas sales. But yet I'll bet their profits are going up in lockstep with the price of gas, and not because they are selling more Twinkies and 64 oz Diet Gutbusters.

They know that the future of gas as a fuel is going to come to a close. With it will be an end to their high volume sales of gas. It might be 30 40 50 years, but they know it. It may sound like a long time, but it isn't. The oil companies know that they stand to make far more money right now on gasoline and diesel with restricted refining and drilling and the speculators (the oil companies also blame the speculators, but guess who the speculators are?), than they will if they spend that money on an industry that is going to change significantly. Why build more refineries if we trying to shift away from gasoline? How much money would you spend on something that will not give as much of a return as if you took profit now and invested that profit elsewhere, in something with a burgeoning future?

Nevermind the fact that some very important people (the ones that make decisions about the federal oil reserves) have mucho oil stock or very strong ties to the oil industry. I understand that the Bush family has recently purchased 98,000 acres in Patagonia. Right on top of one of, if not the largest, underground fresh water acquifers. Fresh water is the next big commodity and of course, those in government have all the info and a headstart in being at the right place at the right time.

Anyway, Clinton's/McCain's proposed tax holiday is pointless. Unless you are trying to get the votes/support of the Teamsters, independents, and the trucking industry. Or anyone who uses enough fuel for it to matter. I have a decent commute that uses 3 gallons a day. How much do you think that will save me?

In the 70's we lowered the speed limit to save fuel. Now it is time to outlaw drive-thru's.

[RallyBob]

Got a call from my friend Greg in Nantucket yesterday. Gas is now $4.60 per gallon for regular unleaded, with premium closing in on $5 per gallon. Is this the highest price in the US right now?

[West Coast GT]

If we're serious about conserving fuel we would mandate cash-only transactions at the pump.

It's too easy to fill a large vehicle and not truly feel the pain of the cost when it goes onto a credit or debit card. This is especially true when the spouse writes out the check at the end of the month.

But when one has to reach into a pocket, pull out cash, count it out, and hand it over, well, its a whole different game altogether.

Considering its a rare day that I have $100 in my pocket, handing over 75 of it to fill the Bonneville would make me cry. Most days I'd have to plan on taking an anti-depressant and going to the bank before going to the gas station.

[PROPEL]

But when one has to reach into a pocket, pull out cash, count it out, and hand it over, well, its a whole different game altogether.

I think that would work for taxes, too... if everybody had to hand over the cash each week for the amounts withheld, there would be a massive march on Washington!

Bob, San Francisco is (once again) listed as having the highest gas prices in the country, according to GasPriceWatch. Hope Greg didn't just get hustled by his local 7-11 station on the Cape.

[traytodd]

The history of crude oil prices:
History and Analysis -Crude Oil Prices

Cost breakdown for a gallon of gas:
Estimated Gasoline Price Breakdown & Margins Details

By far the major cost in a gallon of gas is the price of the crude. While the major oil companies do have vast reserves scattered around the world, they do not control all of them, hence they do not have total control over the price.

The majors are building refineries, just not in the US. The largest refinery in the world is now in India (750Kbbl/d) with a sister plant being built next door entirely for US export.

[RallyBob]

Bob, San Francisco is (once again) listed as having the highest gas prices in the country, according to GasPriceWatch. Hope Greg didn't just get hustled by his local 7-11 station on the Cape.

I wonder if they don't count Nantucket since it's an island. Islands traditionally have higher costs of everything because of transportation costs.

There are only a 1/2 dozen or so stations on the island anyway, they pricing is locked in. He told me that was the cheapest price he found. They charge what they want, you have no choice unless you leave the island, fill up on the mainland, and then return to the island. But the cost of the ferry and the time alotted severely offsets any gas price savings.

Gas lines form on Nantucket before prices jump 60 cents - Local News Updates - The Boston Globe

[traytodd]

Gas is always more in remote tourist locations. It is transportation and the fact that a years salary must come in a few short months.

I saw one station here (Sacramento) drop from 3.99 on Thursday to 3.89 on Friday. Most othe stations were running 3.87-3.89 here so I think that station saw a drop in sales. Market forces do work.

One of the things I learned while working for Exxon was that most of the earnings are made at the well head in part to capture the oil depletion allowance. Refineries operate on a small margin except during times when the crude prices are in flux such as now. They seem to make money as the market goes up because they raise prices quickly to sell their inventory. When prices come down, they are slow to reduce. During steady state times though, the make small margins. This is partially due to competition and partially to prevent competition. It is hard for independent refiners who do not have ready access to oil reserves to survive. Small margins are counter intuitive since crude is useless except as a feedstock to a refinery. It is the refinery that adds the value. The refineries are also capital, manpower, and energy intensive.

[neuropel]

Anyone ever see "Who Killed the Electric Car?" from a year or two ago? If not, you should rent it and watch it. Then we can all smile as we pay $4+ per gallon at the pump.

It's an eye-opening documentary.

[namba209 (R.I.P.)]

Gas is always more in remote tourist locations. It is transportation and the fact that a years salary must come in a few short months.

That thought ran rampant here inSANe Diego for many years, until it was found there was a pipeline from the refineries in LA to a tank farm here. I've noted through the years, that when a price increase in a barrel of crude is announced, the increase in the price of gas is immediate at the pumps, but when there is a decrease, the price remains the same until the crude actually gets out of the refineries. Also, with 20% of all the cars made being in CA, it is interesting to note the price of gas is higher here than anywhere else in the country. I guess the idea of all those cars using all that gas, they can have the price higher here and only have one State complain than to have the same price across the country and have everybody irate, and we have the rifineries here too. Bean counters at work.

[traytodd]

I would not consider San Diego remote or a tourist location. It is a major metropolitan area. Bridgeport, CA does qualify being on the Nevada side of the mountains about half way between Tahoe and Lost Wages. Gas is always 25 to 50 cents higher there.

Gas is higher in CA thanks to our CA Air Resources Board (CARB) and the state legislature. Only refineries certfied with CARB can sell gas in CA. CA has historically led the rest of the nation in fuel restrictions such as lower sulfur, Reid Vapor Pressure, benzene content, etc. There are costs associated with that leadership and we pay dearly for them, the oil companies not being bashful about that. Some of the mandates are necessary to clean up the air. Others are just political in nature and do little for air quality. CARB periodically threatens the existance of our classic cars and is currently on an anti-CO2 kick.

The legislature encourages CARB, prevents drilling, and generally misuderstands the whole economics of the oil industry. The state has made millions of dollars off this run up of pump prices, as much or more than the refineries.

Overall, fuel would be less costly in this country if we could get rid of local mandates (called designer gasolines) and go to a common standard across the country.

[West Coast GT]

Well, now that fuel prices have jumped, the local news (television & paper) were full of stories about the woes of our Bay Area bridges. People are car pooling (3 or more in a car and the toll id free) and riding trains, buses & boats to work. The Bay Bridge usage this week was down 20%. So the transportation districts are poor-mouthing it.

All Bay Area bridge toll are $4.00, except the Golden Gate which is $5.
________________

Friday afternoon I'd wrapped up a long week (working from home) and wanted to top the Opel off before the weekend crowds stack up at the stations. But the weather was great, roads were still relatively empty before the Friday get-away stampede made them miserable. So I took an hour long ride down some local 2-lane routes. You know, just in case I'd over-filled the tank or something.

[kwilford]

By far the major cost in a gallon of gas is the price of the crude.

That may be true in the USA, but is certainly not in Canada or Europe, where taxes constitute the majority of the price of gasoline. And as crude oil prices rise, the government "take" goes up along with it, not only in the form of road, excise and sales taxes which are typically a percentage of the pump price, but also in the form of crude oil royalties, as much of Canadian petroleum is produced from "Crown" as in Government land, and virtually all of Alaska. Most of the remaining world's oil also pays some form of production royalty or revenue tax. So complain to your elected representatives...

[PROPEL]

Perhaps 60 percent of today’s oil price is pure speculation.

[jlthunder]

The question is when and if the bubble will burst? Just like dot coms & housing. Who will be the victims in its aftermath? Increased supply & increased prices, it just doen't make sense. If there was an actual shortage, then I would understand this.

[PROPEL]

Goldman's Murti Says Oil `Likely' to Reach $150-$200

And an analysis.

[jlthunder]

If Oil has dropped $6 /barrel over the past few days. Down to a cheap 113.00/barrel. Probably just a blip in the long run though.

Yup, just a blip. In 4 days(including a weekend) it has gone up another 9 dollars/bbl. It is out of control.

why can't my salary do this?

[tomking]

Well oil is priced around the world in dollars. And dollars are getting less and less valuable around the world due to our voracious appetitie for spending money that we dont have. Spending due to the war on poverty, due to trying to provide health care to all, due to the war against terrorism, due to pork barrell spending by polictians trying to buy votes, due to the "tax rebate" to stimulate the economy by borrowing from future generations, etc. etc. and on and on

[West Coast GT]

Again, I am so glad my hobby car is a sports car that gets good mileage.

I would be depressed if it were a muscle car with a chromed big-block crate engine and duel 650 cfm Dominators pouring buckets of gas down the intake.

One can almost hear the GT sipping fuel like an old lady nursing her champagne at Sunday brunch after church.
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One of these days the moderators are going to change this thread's title to:

"It Was a Dark and Stormy Night"

[ungermm]

One can almost hear the GT sipping fuel like an old lady nursing her champagne at Sunday brunch after church.

Ya, I can visualize that pretty easily. I guess the opposite would be the big ol' beer guzzling guy with his head under the keg at the Saturday BBQ after his release from prison. Hmmm...I've heard that opposites attract.
Jerry