Got Gas? U.S. Economy to Worsen as Gas Prices Skyrocket

[Engineer]

If the refineries here are artificially moving gasoline to other countries, then they have to do so in a manner that would inflate the price of gasoline in the US with respect to the global market price. In that situation, then foreign refineries could come in and undercut the US refineries and supply the US since they could sell gasoline to the US at a higher price than locally.

Not if the rising economies of the world lack refining capacity to export gasoline. Just a few years ago, India was building a super refinery to ship refined gas to the US (because it was cheaper to refine it there). Now the US just ships the gas to countries willing to pay more for it. A relatively few pockets in the US are lined and the rest of the pissants in the US are...well, pissed upon with higher, economy killing prices (on everything else too when expensive shipping from rising fuel is factored in).

 

[Londo_Jowo]

But again, there never was any kind of shortage whatsoever. The refineries, wholesalers, "speculators" are trying to see how far they can push the US economy before it breaks down. People now see $3.50 gas as CHEAP. Dave is right in that we have become brainwashed. I see it as bullshit and will call it as such. You guys can cheerlead it all you want.

I'm glad you consider yourself to be brainwashed as it explains much. The refineries make 7% on a gallon of gas. Taxes are more than 13% of the price, in many areas tax is even higher as there's a local tax added (Cook county/Chicago). Not to mention areas that require special blends not used anywhere else in the US...California...Chicago....

I'm looking for forward to the prices getting back closer to the $3/gal (or less) in a few months once all refineries have performed maintenance (many in the moderate climates are starting this month/next month and in the colder regions will start maintenance as late as May) and the summer blend supplies reach higher levels.

 

[Engineer]

I'm looking for forward to the prices getting back closer to the $3/gal (or less) in a few months

Quoted to see how well that works out for us. I highly doubt, barring a recession, that we will get $3 per gallon of gas during the summer months when we have nearly $4.00 per gallon of gas in the winter, maintenance or not.

As for your comment, I'm not brainwashed at all in context to my comment (but you knew that too and tried to throw a cheap shot in). I feel that the prices are too damn high and simply lowering the prices to $3.00 does not make it CHEAP. It's more economical than it was but it is far from CHEAP. The average American, brainwashed, would call $3.00 at this point CHEAP.

 

[Londo_Jowo]

I paid $2.86/gal just 3 months ago. Unless oil prices go through the roof I see it hitting those prices again.

http://forums.anandtech.com/showpost.php?p=34255274&postcount=3840

 

[Engineer]

I paid $2.86/gal just 3 months ago. Unless oil prices go through the roof I see it hitting those prices again.

http://forums.anandtech.com/showpost.php?p=34255274&postcount=3840

We will see....and $2.86 is still not CHEAP.

 

[DucatiMonster696]

But again, there never was any kind of shortage whatsoever. The refineries, wholesalers, "speculators" are trying to see how far they can push the US economy before it breaks down. People now see $3.50 gas as CHEAP. Dave is right in that we have become brainwashed. I see it as bullshit and will call it as such. You guys can cheerlead it all you want.

This is conspiracy theorist thinking.

An interruption in the refining process of something as in demand and as useful as gasoline (yes federally mandated refinery maintenance is indeed significant in terms of the marketplace pricing even if gasoline inventory has kept pace with demand) will have an impact on future prices and drive demand for prices of future contracts for oil in the market place higher because gasoline stations must ensure that they have enough gas to fulfill demand.

Of which the the inverse is true when production as usual occurs and but demand decreases due to other issues in the economy. Yet I don't see you applying that same logic of a conspiracy of "greed" when gas prices declined due to a "unforeseen" lack of demand last year as a result of economic reasons which kept many people at home rather than on the road. Where was the collusion seen in driving prices down? One could easily state that they were as "greedy" now as they were "selfless" in the past when prices declined using your rationale.

 

[dmcowen674]

Originally Posted by Engineer
But again, there never was any kind of shortage whatsoever. The refineries, wholesalers, "speculators" are trying to see how far they can push the US economy before it breaks down. People now see $3.50 gas as CHEAP. Dave is right in that we have become brainwashed. I see it as bullshit and will call it as such. You guys can cheerlead it all you want.

This is conspiracy theorist thinking.

An interruption in the refining process of something as in demand and as useful as gasoline (yes federally mandated refinery maintenance is indeed significant in terms of the marketplace pricing even if gasoline inventory has kept pace with demand) will have an impact on future prices and drive demand for prices of future contracts for oil on the market place higher because gasoline stations must ensure that they have enough gas to fulfill demand.

Of which the the inverse is true when production as usual occurs and but demand decreases due to other issues in the economy. Yet I don't see you applying that same logic when gas declined in price due to a "unforeseen" lack of demand last year due to economic reasons which kept many people at home rather than on the road.

"conspiracy theorist thinking"

"because gasoline stations must ensure that they have enough gas to fulfill demand"

Bahahahhahaha

That's the best you got.

Did you conveniently forget Gasoline is the number one export of the United States?

Engineer has got you Oil Thug Supporters in a tail spin so hard I see poo flying.

 

[Born2bwire]

Not if the rising economies of the world lack refining capacity to export gasoline. Just a few years ago, India was building a super refinery to ship refined gas to the US (because it was cheaper to refine it there). Now the US just ships the gas to countries willing to pay more for it. A relatively few pockets in the US are lined and the rest of the pissants in the US are...well, pissed upon with higher, economy killing prices (on everything else too when expensive shipping from rising fuel is factored in).

The US is not the exclusive supplier of gasoline to the world. There is no reason why a refinery in Venezuela wouldn't divert gasoline from Brazil to the US if the US market became artificially inflated with respect to the market in Brazil. If you believe that the refineries in the US are willing to undercut its local populace then why wouldn't the refineries in other countries do the same? So why didn't this refinery in India get built if it was meant to supply the US market? You are already contending that the US market is being artificially undersupplied to capitalize off of the foreign markets. This would make the Indian refinery more appealing because it could help supply the Indian market (reducing costs since it is cheaper and improving the trade balance) while at the same time profiting from the arbitrage with the US market. The oil industry is not exclusively American, I don't see any reason why say Sinopec wouldn't jump at the chance to profit off of the US in this manner.

But we've given you good reasons why gas prices can still be high despite the reduced domestic demand and increased production. What evidence do you have that the local gasoline supply is being artificially manipulated?

 

[Londo_Jowo]

We will see....and $2.86 is still not CHEAP.

Did I say it was cheap? No. However, don't let that stop you from trying to speak for me. I watch McOwned pray for $5 gas and the prices kept dropping until the refineries shutdown for maintenance.

 

[DucatiMonster696]

This will just push for more efficient technology. That is all.

As fuel efficiency increases so does the decline of the use of gasoline in the marketplace in the US. Which basically translates into less gas being sold here and more being sold overseas were demand is higher and prices are higher as a result. This means prices will not be dictated by US consumer demand of gasoline but instead by foreign demand by gasoline in places such as China, Brazil, India, etc.

Additionally increases in fuel efficiency and newer technology to gain access to oil (which was once considered to costly or difficult to tap) are just a few reasons why the constant fear mongering and predictions of "peak oil" in the world have been far off their mark in terms of accuracy.

 

[dmcowen674]

Here is more of where the Oil Thug supporters on here are getting their talking points from:

3-4-2013

http://blogs.marketwatch.com/thetel...-are-high-even-though-oil-prices-are-falling/

Why gasoline prices are high even though oil prices are falling



Consumers are continuing to pay high prices at the pump for gasoline, even as oil prices are falling.


“Traditionally, the two are reasonably well related,” said Andrew Wilkinson, strategist at Miller Tabak & Co., in a note Monday.



“But the relationship has morphed over the years as refineries go offline and as the price of Brent crude, from which gasoline is refined, remains historically high.”

Tom Kloza, chief oil analyst at the Oil Price Information Service, believes that the news this week will “involve pump price cuts for gasoline — and in some cases they may be quite substantial.”

But it’s still too early to say that the recent climb above $3.78 a gallon is the likely peak for 2013, said Kloza.


“Some markets have clearly not peaked,” he said. “We suspect that we’ll see higher Northeastern and Midwestern prices as summer blends take hold in the second quarter, but we also suspect that many markets may soon trade for $3.25 a gallon or so.”

====================================================================================

"but the relationship has morphed"

That's their new line of bullshit because the old excuses can't hold water any longer.

 

[Londo_Jowo]

Tom Kloza, chief oil analyst at the Oil Price Information Service, believes that the news this week will “involve pump price cuts for gasoline — and in some cases they may be quite substantial.”

But it’s still too early to say that the recent climb above $3.78 a gallon is the likely peak for 2013, said Kloza.


“Some markets have clearly not peaked,” he said. “We suspect that we’ll see higher Northeastern and Midwestern prices as summer blends take hold in the second quarter, but we also suspect that many markets may soon trade for $3.25 a gallon or so.”

Imagine that, he just said the same things I said in my argument with Engineer.

 

[dmcowen674]

The Oil Thug Fuckers already export so much Gasoline causing Americans to subsidize the world in gas now they want to send all the oil they are getting from fracking out of the country too.

3-5-2013


http://www.bloomberg.com/news/2013-...consider-allowing-oil-exports.html?cmpid=yhoo

Conoco Says U.S. Should Consider Allowing Oil Exports



ConocoPhillips, the largest independent U.S. oil and natural gas producer, said the government should consider future exports of crude as domestic output rises.

Rising oil and gas production from the “shale revolution” means North America may become an energy exporter in the next decade, Ryan Lance, chief executive officer of ConocoPhillips, said in prepared remarks for a speech at the IHS CERAWeek conference in Houston today.

The U.S. became a net exporter of petroleum products in 2011 for the first time in 62 years, according to the Energy Information Administration. Monthly U.S. oil production exceeded 7 million barrels a day in November, for the first time in 20 years.

Exports of U.S. crude have been banned except for limited exceptions since 1975.

Exporting Oil

U.S. oil may potentially be exported to areas of the world that have refineries that process light, sweet crude, Lance said during a news conference in Houston today. Oil may be sent to locations such as Mexico, South America and Europe, he said.



Oil exports could follow gas projects. Companies including Cheniere Energy Inc. (LNG) are proposing to export liquefied natural gas, or LNG, amid a surge in production. Combined, there are planned projects to liquefy more than 29 billion cubic feet a day for export from the U.S.




ConocoPhillips, based in Houston, became an independent producer last year with the spinoff of refining, chemical and pipeline businesses to form a separate company known as Phillips 66. (PSX) Independent oil companies don’t have refineries or a chemical unit.

 

[dmcowen674]

Just got word from a friend that the domestic Oil Company Thugs have sprung a plan to pull out of the retail business in the U.S. to replace with Foreign owned operations. They expect to at least quadruple gas prices and profits.

I'll post more when I get more info.

This will be huge.

 

[chucky2]

Quadruple gas prices? Not even remotely close to happening. Quadruple profits? That'd I'd believe. Huge stretch, but, within the realm of possibility. Quadrupling prices is in no ones realm of believability, even out in Moonie land.

 

[OverVolt]

I paid $3.72 before it rose to $3.85 and didn't need a tank until its now back down.

Go me.

 

[Doppel]

Just got word from a friend that the domestic Oil Company Thugs have sprung a plan to pull out of the retail business in the U.S. to replace with Foreign owned operations. They expect to at least quadruple gas prices and profits.

I'll post more when I get more info.

This will be huge.

"just got word from a friend" = "voices in my head just told me"

"I'll post more when I get more info." = "voices in head are resting now, will be back for more bullshit later, stay tuned"

 

[dmcowen674]

In 2007 to 2008 I lived in Morristown New Jersey and we had friends in nearby Woodbridge that work at Hess. I spoke with one, he still has a job at least till 2014. It will take a long time to close down almost 1,400 stations.

He said there are no domestic replacements coming unlike the Refinery in Pennsylvania that was bought by Delta Airlines.

The plans of the Oil Thugs are that Americans have to depend on Foreign Companies to bring Refined Gasoline that meets local code.

This gets them out from under the EPA while making them more money than ever before.

Americans bend over with no lube.

You want lube you have to pay a Foreign Country for it.

This sounds like OPEC plans since domestic oil production has gone through the roof.


3-5-2013

http://haddon.patch.com/articles/hess-to-rid-itself-of-its-retail-gas-station-businesses

Hess to Rid Itself of Its Retail Gas Station Businesses


The Woodbridge-based oil business will now divest itself of 1,350 gas stations, many of which operate in New Jersey and 17 other Eastern Seaboard states.

The familiar green and white Hess signs that dot the Woodbridge landscape and much of New Jersey may soon be no more.

Hess Corporation announced Monday in a letter to shareholders at their annual meeting that it was divesting itself of its retail gasoline and convenience store operations, in an effort to restructure the company and improve its balance sheet.

The move will affect 1,350 gas stations - many owned by Hess itself - that operate in 18 states on the Eastern Seaboard. The gas stations serve as many as 1.3 million customers a day

The changes began in January, when Hess announced it would be permanently shutting its oil refineries, including the one located in the Port Reading section of Woodbridge. Hess said it was leaving the gasoline refining business because of weak demand and the cost of complying with E.P.A. regulations.


The refinery was closed at the end of February.



http://www.wltx.com/news/story.aspx?storyid=225379

HESS Says Goodbye: End Of A Family Tradition


The Hess Corporation has been in our country for more than 85 years and Monday they announced that they will be closing their gas stations.

Most people remember collecting the HESS trucks every year. For one Sumter family collecting the trucks was a Christmas tradition.

 

[Londo_Jowo]

As always McOwned has no clue as to what he's reporting. The refinery that Delta bought refines jet fuel, there are many refineries located throughout the US that refine jet fuel.

This was a wise move by Delta as the refinery is making them a decent profit.

http://www.marketwatch.com/story/delta-starting-to-profit-from-penn-refinery-buy-2012-11-07

Delta Air Lines Inc. is starting to realize gains from its purchase of a 185,000-barrel-a-day refinery in Trainer, Pa., earlier this year, Monroe Energy LLC chief executive Jeffrey Warmann said Wednesday.

Monroe is a wholly owned subsidiary of Delta, and purchased the idled refinery from Phillips 66 (PSX) earlier this year in an effort to control Delta's jet fuel costs. The refinery shipped its first batch of jet fuel on Sept. 25 after a few months of turnaround over the summer aimed at retrofitting the plant to maximize output of that product.

Many airline and refining analysts perceived the move as a risky one. Airlines generally try to manage their fuel costs by hedging crude oil.

"We've seen a number of different areas where we've been able to influence the jet fuel price to the advantage of Delta," Mr. Warmann said while speaking at the Global Refining Strategies Summit in The Woodlands, Texas.

"We don't have to go beg, borrow or steal from various suppliers...If I can supply my own and don't have to take your jet fuel, that's negotiating, not begging," Mr. Warmann said.

The Trainer refinery is ramping up toward producing 52,000 barrels of jet fuel a day, most of which will be used at JFK and LaGuardia airports in New York, Mr. Warmann said

 

[Svnla]

Cheapest gas around here is down to $3.46/gal for regular unleaded.

 

[Doppel]

Just got word from a friend that the domestic Oil Company Thugs have sprung a plan to pull out of the retail business in the U.S. to replace with Foreign owned operations. They expect to at least quadruple gas prices and profits.

I'll post more when I get more info.

This will be huge.

Mcowen, any update from your head voices yet on this?

 

[Londo_Jowo]

I like the way McOwned acts like the Woodbridge (Port Reading) refinery is so much different than other refineries. It's just another Fluid Catalytic Cracking unit like many others in the US.

http://woodbridge.patch.com/articles/hess-refinery-in-port-reading-to-be-closed-today

Following a technical evaluation, Hess Corporation announced it was shutting the fluid catalytic cracking unit (FCCU) at its Port Reading plant on Friday for maintenance work, according to DowJones.com.

 

[dmcowen674]

3-7-2013

http://finance.yahoo.com/news/why-us-gas-exports-shake-155906246.html

Why US Gas Exports Will Shake Up Global Market



Despite objections, the U.S. is heading down the road to export natural gas, and that could ultimately help shake up world energy markets.


The boom in U.S. natural gas, thanks to new drilling technologies has resulted in a record amount of recoverable gas at cheap prices.


But there are concerns that the shipments out of the country will mean higher prices in the U.S. which has enjoyed extremely low prices recently.

Natural gas futures on the NYMEX have been trading at about $3.50 per million BTUs. Natural gas is much more expensive in other parts of the world, especially Asia where the price is oil-linked.

Japan is one country hungry for U.S. liquified natural gas (LNG), since the Fukushima earthquake forced Japan to increase high-priced natural gas imports, with its nuclear power industry off line. Japan pays about five times more for natural gas than the U.S.

It was not long ago that the U.S.was considering importing LNG, but the "shale gale" has helped give the U.S. 2,200 trillion cubic feet in recoverable gas resources, enough for 100 years by some estimates.

"Now is the time for the DOE (Department of Energy) to make case by case decisions, " said Carlos Pascual, State Department Special Envoy and Coordinator for International Energy Affairs.

He explained that after the Energy Department determined last year that exporting gas is not against the interests of the U.S., there was a commentary period that has now finished.
================================================

Bullshit

Natural Gas will skyrocket again just like Gasoline and Americans know it.

Whether Americans can stop the Oil\Gas Thug Industry from shipping it all out of the country I doubt it.

So far Americans have shown like they to be raped and pillaged by these Thugs.

 

[Charles Kozierok]

Natural Gas will skyrocket again just like Gasoline and Americans know it.

Yes, just like Romney was going to win the presidency, or gas would "skyrocket", or any of your other utterly baseless, paranoid, ridiculous predictions.

Even at $3.50/mmbtu, gas is cheaper today than it averaged through the first decade of the century.

 

[dmcowen674]

3-7-2013

http://www.cnbc.com/id/100530572?__source=yahoo|headline|quote|text|&par=yahoo

Berkshire's Oil Hauling Railroad Tests Switch to Natural Gas


The domestic oil and gas drilling boom has made oil more plentiful and gas abundant and cheap. The oil is locked in the mid-Continent, awaiting new pipelines, but it already is moving on trains.


Natural gas is now cheap enough to be considered as a fuel for locomotives and other vehicles.

BNSF CEO Matt Rose said the railroad now ships 525,000 barrels a day and expects that to grow to 700,000 barrels by the end of the year. Shipments could reach 1 million barrels in the next 18 months.

"Over the last several years, we've been working with our two rail engine suppliers, General Electric and Caterpillar, and we believe they have some real solutions"

Rose said the company plans to pilot a program for an LNG engine and will work with policy makers and regulators to seek approval over the next year.

"This would be the largest transformation since from the steam locomotive to the diesel locomotive," he said. If approved, the engines would reduce emissions and provide more competitive rail product versus the highway, he said.