Original Gas Thread: Americans enjoying $4 gallon despite oil oversupply highest in 8 yrs

[Engineer]

Canada offers to help.

 

[kyparrish]

Originally posted by: Engineer
Canada offers to help.

How? Are they going to stop driving the tank around so much?

Sorry, I had to. Back to OT... (oh teh noes, I've never posted in teh P&N!!!11)

 

[luigi1]

(oh teh noes, I've never posted in teh P&N!!!11)

You are now a political hack and party lacky. Can you live with that?
These will be strainge strainge week friends. Good luck, stay safe.

 

[PCMerlin]

Originally posted by: Gamingphreek
Ok, i haven't been reading this thread.

Can some explain to me if gas prices will ever drop to a reasonable price again (Im only a Senior in HS). Also, aside from losing the refineries in New Orleans, what is causing prices to go up.

As i am a HS student and taking 5 AP classes i can only work 15 hours a week. This is almost taking my entire salary just to fill up on gas ('92 Toyota 4x4).

I live in Fredericksburg VA, and i jumped into Wawa before they changed the price. Everyone around them had just finished jumping to $3.30, i got in a $2.99.

-Kevin

Kevin,

Some of my earlier posts (within the last couple of pages) should explain why prices are as high as they are. Bottom line is the lack of refinery capacity. The major economists are saying this should all pass within a matter of weeks. I think that they are trying to pacify the public for as long as they can, but that is only going to put off the inevitable. Gas prices are going to stay at least $3/gallon, if not higher, through the end of the year. Needless to say, retailers will have to start recouping their losses getting inventory to stock the shelves. Inflation will pinch people in ways it will be hard for all but those 60 and over to imagine. In addition, people have been stretching their credit limits to the max trying to pad the spikes in costs in order to maintain the lifestyle they have been accustomed to over the last decade or so. Sales during the all-important Holiday season will remain stagnant, causing many big-name retailers to cut back tremondously not only in terms of employees, but in the number of stores they operate.
Only one thing could make things any worse: If people start pulling money out of their 401k and other retirement funds to finance their holiday purchases. Most of these funds are in the form of mutual funds, directly linked to the stock market. This could be seen as a mass sell-off making the "market correction" after 9/11 look just like blip.

My advice to you: Keep up the good work in High School - you aren't taking AP classes for the fun of it. I'd keep the truck, but cut down a little on the cruizin' - that should save a little as far as the gas. You must have plans for next year at some college or another. Keep working towards that goal as that will be the safest (economically speaking) place to be should the economy collapse. Your room and board will be taken care of for the next four years. By then the economy should be in the middle of a major rebound (with any luck we should be halfway through some MAJOR political reform) and we will be needing all the educated individuals possible to contribute towards completing that rebound.

Just MHO.

 

[PCMerlin]

Originally posted by: Engineer
Canada offers to help.

I love Canada and have quite a few friends from there. From what I understand, they are also at (or close to) 100% capacity. How much of their "nothing left" can they send us?

 

[Trevelyan]

Well, just to update. In Pensacola, FL on my 20 mile trip home from campus today there were a total of 3 gas stations with gas, and at each there was a line about 1/2 mile long.

Insanity. Honestly, I don't know how I'm going to drive to school next week unless something changes.

 

[Icepick]

A woman phoned into CNN and is reporting a four mile long line at a gas station in Covington, LA. This amounds to at least a 6 hour wait for gas!! This woman who was being interviewed stated that she's packing as a precaution because she fears violence at the lines. :shocked: Holy sh**!

 

[conjur]

A gas station is open on the North Shore? They're luck to even have that, I'd say.


It's up to $3.39 here...stations getting low...some arguments but nothing tooo bad yet.

 

[Icepick]

Luckily I filled up both of my minivan last week and didn't use it yet. My other car still has 3/4 tank and I haven't had to bother with the gas stations around here yet.

I just checked www.albanygasprices.com and prices here are as low as $2.95/gallon!!!

 

[conjur]

Gas down $0.30 in Louisville...down to $2.89 at all Speedway stations.

 

[Engineer]

Consequences of panic by the public. So very sad!

 

[Pabster]

Originally posted by: icepik
A woman phoned into CNN and is reporting a four mile long line at a gas station in Covington, LA. This amounds to at least a 6 hour wait for gas!! This woman who was being interviewed stated that she's packing as a precaution because she fears violence at the lines. :shocked: Holy sh**!

Yeah people are just getting ridiculous.

I love seeing the pictures of those idiots with the entire bed of their full-size pickup truck filled with 2-3 gallon gas jugs filling them all up.

All this insane panic has caused a HUGE jump in demand and thus an artificial "shortage" which our oil companies are more than happy to perpetuate. Idiots.

 

[conjur]

Originally posted by: Engineer
Consequences of panic by the public. So very sad!

That's beyond just panic....

 

[GoPackGo]

Gas just dropped by 20 cents here...2.79.

Sounds like the rest of the world is going to step up to help.

I am quite impressed.

 

[PCMerlin]

Don't get too excited about the price drops.
As soon as stations get wind of this:
Major Oil spill in Mississippi River
you can expect prices to jump right back up again.
It's still ranging from $2.99 (old gas stations that dont have the digital systems in - $2.99 is the highest they can charge, but most are reporting "Out of gas") up to $3.49 for regular.

 

[charrison]

Originally posted by: PCMerlin
Don't get too excited about the price drops.
As soon as stations get wind of this:
Major Oil spill in Mississippi River
you can expect prices to jump right back up again.
It's still ranging from $2.99 (old gas stations that dont have the digital systems in - $2.99 is the highest they can charge, but most are reporting "Out of gas") up to $3.49 for regular.

I think the worst on gas prices is over now. Gaspipelines are coming back on and the refinaties should start coming back online soon as well.

 

[Gamingphreek]

PCMerlin, thanks for that post.

I knew about the refineries and what not, but what caused gas prices to go up before that? I remember a couple years back when it was ~$.80 a gallon. I know supply and demand and the basic principle, but why did it all of a sudden start going up and keep going up. (Could you keep your political views out of the response to that)

Thanks,
-Kevin

 

[dmcowen674]

Originally posted by: Gamingphreek
PCMerlin, thanks for that post.

I knew about the refineries and what not, but what caused gas prices to go up before that? I remember a couple years back when it was ~$.80 a gallon. I know supply and demand and the basic principle, but why did it all of a sudden start going up and keep going up. (Could you keep your political views out of the response to that)

Thanks,
-Kevin

Don't expect an honest answer. Most P&Ner's are on the side of the Oil Barons.

 

[ECUHITMAN]

3.29 to 3.49 (regular) here in eastern North Carolina (at least 6 hours ago).

All I know is this can't be good for the economy.


EDIT:
BTW on the high end that is almost a $1 increase in the past few days (gas last week was 2.69...ahhh the good old days....)

 

[Gamingphreek]

Originally posted by: dmcowen674

Originally posted by: Gamingphreek
PCMerlin, thanks for that post.

I knew about the refineries and what not, but what caused gas prices to go up before that? I remember a couple years back when it was ~$.80 a gallon. I know supply and demand and the basic principle, but why did it all of a sudden start going up and keep going up. (Could you keep your political views out of the response to that)

Thanks,
-Kevin

Don't expect an honest answer. Most P&Ner's are on the side of the Oil Barons.

Hey i can hope

I just want a definite reason of what has happened. I would just rather keep presidential bashing out of this... although it seems unlikely that that would happen.

-Kevin

 

[ECUHITMAN]

All I know is the lady on Science Friday on NPR that worked for the National Oil (something) said that with crude oil being what it is the base cost of a gallon of gas is 1.60 so figure with taxes and such, that the price we actually pay being doubled is fair...that?s it fair....

 

[mithrandir2001]

Originally posted by: charrison

Originally posted by: PCMerlin
Don't get too excited about the price drops.
As soon as stations get wind of this:
Major Oil spill in Mississippi River
you can expect prices to jump right back up again.
It's still ranging from $2.99 (old gas stations that dont have the digital systems in - $2.99 is the highest they can charge, but most are reporting "Out of gas") up to $3.49 for regular.

I think the worst on gas prices is over now. Gaspipelines are coming back on and the refinaties should start coming back online soon as well.

I strongly disagree, unfortunately. I think gas prices could if not should rise, temporarily, to $6-8/gallon. We need to cut back aggregate gasoline consumption by 10% and I just don't see people changing their driving habits yet. The price needs to rise so that drivers get the message that all is not good at all with the national fuel refining and distribution system. $3-3.50 gas makes the problem seem minor. It's not.

I would "welcome" pricey gas because then I could rest assured that there would be enough to go around. But there are occassional gas lines and station shortages here...which tells me the price is not high enough. You gotta get people to stop driving as much and the price mechanism is probably the surest way of enforcing that. Such high price need last for 4-6 weeks max until the system comes back closer to 100%.

 

[PCMerlin]

Originally posted by: Gamingphreek
PCMerlin, thanks for that post.

I knew about the refineries and what not, but what caused gas prices to go up before that? I remember a couple years back when it was ~$.80 a gallon. I know supply and demand and the basic principle, but why did it all of a sudden start going up and keep going up. (Could you keep your political views out of the response to that)

Thanks,
-Kevin

Kevin,
In all reality it's the basic economics of supply and demand. When Gulf War II started 2 1/2 years ago, Pres. Bush tapped the strategic oil reserves to pad the loss of oil production from Iraq. OPEC stepped in and did just what we thought they wouldn't do: They increased their output. This created a glut of available crude oil, the price per barrel (55 gallons) dropped to $20/barrel. We still had a somewhat plentiful supply of refined oil, so supply greatly exceeded demand. Prices dropped to ridiculously low levels (I think I even saw it as low as $0.69). With prices this low, many consumers traded in their somewhat efficient autos for gas-guzzling monstrous sized SUV's that got about 1/3 the mileage as their previous car. This translates into using 3 times the gasoline they were using previously. As prices for crude oil balanced back out at normal ($40/barrel) levels, the price of gas rose back to $1.39 - $1.59/gallon. The problem was, that with all these extra gas-guzzling vehicles on the road, oil companies could not refine the oil fast enough to meet demand. As soon as demand exceeded the available supply, oil companies started charging more and more for refining the oil, which translates into higher prices at the pumps.
Now, let's take a look at where gas SHOULD be (ECUHITMAN may want to pay attention here, rather that listen to the oil company try to explain ):
When crude oil was $20/barrel that translates into .363636... per gallon. If gas was being sold at .80/gallon, we can assume the cost to process and distribute a gallon of crude oil into a gallon of gasoline is roughly .80 - .363636 or .43636... per gallon.
When crude oil was $40/barrel (.7272.../gallon) gasoline was around $1.39/gallon. Cost to process and distribute jumps to .6627/gallon.
Even before the Katrina disaster, crude oil was trading at $60/barrel ($1.09/gallon). Assuming a similar increase in the cost to distribute (gas tankers use fuel, hence higher fuel costs would increase cost to distrubute), cost to process and distrubute would be in the range of .889/gallon, meaning gas should have been at MOST $1.99/gallon, not the $2.59 that we were seeing around here.
mithrandir2001: Which oil company (or comapanies) do you own stock in? Because that the only explanation I can come up with that you would WANT gas prices to go higher. Do you not realize (or care, even) how many elderly and infirm would DIE this winter if prices went up that high? Keep in mind that these prices affect heating oil, kerosene, and LP gas prices as well. Can you not imagine the riots that would ensue at gas stations and how many station owner's lives would be in peril from the threats?

 

[PCMerlin]

Originally posted by: Gamingphreek

I just want a definite reason of what has happened. I would just rather keep presidential bashing out of this... although it seems unlikely that that would happen.

-Kevin

Gosh, you take all the FUN out of it!

 

[Gamingphreek]

Thanks!

So basically, by hitting that "wonderful" period of low gas prices, we were essentially shooting ourselves in the foot? That is just GREAT

What should prices stablize out at, after everything gets back on track? Is there a definite answer? If not, what would your estimates be?

-Kevin