OT - Gas Prices

[JohnnyFairPlay001]

Why is this happening? Gas went up 20 cents in the last week and I dont know why? Just wondering if anyone can fill me in and make me understand?

[philburger1]

Why is this happening? Gas went up 20 cents in the last week and I dont know why? Just wondering if anyone can fill me in and make me understand?

407655[/snapback]

 

Oil charged to a record $66 a barrel Thursday as Iran's nuclear work put it at odds with the United Nation's atomic watchdog, and more U.S. refinery snags threatened gasoline supplies to the world's biggest consumer.

 

Earlier the International Energy Agency said non-OPEC oil output growth was falling short of expectations, putting more of a burden on OPEC's stretched production capacity to meet rising demand.

 

Light, sweet crude for September delivery ended up at 90 cents, reaching $65.80 a barrel, after hitting a record-high of $66. London Brent was up $1.39 at $65, after touching $65.66.

 

"The presence of significant headline risk, most particularly from Iran's international relations, the Atlantic hurricane season and from tightness in refining, is continuing to support prices at higher levels," said Barclays Capital.

 

Treasury Secretary John Snow on Thursday said the question of releasing oil from U.S. emergency stockpiles to ease lofty oil prices was "off the table."

 

"That's really off the table for circumstances like the ones we're facing now," Snow said in an interview with CNBC.

 

In Vienna, the board of governors of the International Atomic Energy Agency approved a resolution demanding that Iran suspend all nuclear activities, a diplomat said.

 

EU diplomats said if OPEC's second biggest producer failed to comply with the resolution they would push that Iran be referred to the UN Security Council for punitive action.

 

Refinery strain

In the United States, where refinery problems have strained gasoline stocks during the peak demand season, BP shut several units at its Texas City refinery, the company said.

 

And ConocoPhillips Wood River refinery suffered a power problem that briefly forced shut some units, the company said.

 

The news came on the heels of U.S. stock data on Wednesday that showed another fall in gasoline inventories in the world's biggest consumer that brought inventories 3.7 percent below a year ago.

 

Edward Meir, of Man Energy, said oil price forecasts were running the gamut. "In markets like these, it is best to let things run their course, especially given the fact that there are no resistance signposts to guide us."

 

The International Energy Agency, adviser to 26 industrialized nations, earlier nudged up its world oil demand growth forecasts for this year and next, leaving already stretched OPEC to fill the supply void.

 

The IEA cut non-OPEC supply growth this year by 205,000 barrels per day, with production problems in the U.S. Gulf, Mexico, Norway and Britain accounting for most of the shortfall. Russia is also pumping less than expected.

 

"The extent to which [the IEA] felt compelled to cut its estimates of non-OPEC production is a bullish factor," said Deborah White, senior energy analyst at SG Commodities.

 

Even with U.S. crude averaging above $53 a barrel for the year to date, in real terms prices are still below the $80 a barrel average of 1980, after the Iranian revolution.

[CoachChuckDickerson]

It depends who you listen to. The most retarded company line I have heard in a long time coming from the White House is we need more refineries. Dumbest excuse ever. Pee on my leg and tell me its raining.

[Movinon]

It depends who you listen to. The most retarded company line I have heard in a long time coming from the White House is we need more refineries. Dumbest excuse ever.

407663[/snapback]

That’s like saying Anhauser Bush needs more breweries since my local convenience store was out of Budweiser yesterday.

[The Tomcat]

That’s like saying Anhauser Bush needs more breweries since my local convenience store was out of Budweiser yesterday.

407666[/snapback]

 

You should drink Labatts Blue Light Bottles.....yum!

[Fan in Chicago]

It depends who you listen to. The most retarded company line I have heard in a long time coming from the White House is we need more refineries. Dumbest excuse ever. Pee on my leg and tell me its raining.

407663[/snapback]

 

I am sorry to tell you this, but that is indeed true. I work in this industry and analyze the data very carefully. I can write a FFS type post and still would not cover half of the aspects but here are some quick notes:

- Refinery capacity is near maximum and demand has SURGED since 2004. We were on the edge of the supply demand curve and now it has been tipped over - too much demand for the supply. The market is still trying to get the demand curve down with increasing prices.

- Oil is high cos of the high end products demand and political uncertainty around Middle East (Gaza pullout, Iraq war, Saudi premier's death)

- MTBE was taken out of gasoline because of political pressure. We lost 3% of the total gasoline pool in the US because of that. This was the most moronic non-science based political move in the history of petroleum. We are replacing it with ethanol which has lower clean-air properties.

[IUBillsFan]

It depends who you listen to. The most retarded company line I have heard in a long time coming from the White House is we need more refineries. Dumbest excuse ever. Pee on my leg and tell me its raining.

407663[/snapback]

 

Well that depends. If you consider that in the summer if CA needs more gas they can't just get what IA isn't using since they have all these different types of blends. So the amount of refineries is an issue.

[Mickey]

I am sorry to tell you this, but that is indeed true. I work in this industry and analyze the data very carefully. I can write a FFS type post and still would not cover half of the aspects but here are some quick notes:

- Refinery capacity is near maximum and demand has SURGED since 2004. We were on the edge of the supply demand curve and now it has been tipped over - too much demand for the supply. The market is still trying to get the demand curve down with increasing prices.

- Oil is high cos of the high end products demand and political uncertainty around Middle East (Gaza pullout, Iraq war, Saudi premier's death)

- MTBE was taken out of gasoline because of political pressure. We lost 3% of the total gasoline pool in the US because of that. This was the most moronic non-science based political move in the history of petroleum. We are replacing it with ethanol which has lower clean-air properties.

407676[/snapback]

The inherent problem in hoping, in the short term, that higher prices will dampen demand is that gasoline is a necessity. Consumption can't be willy-nilly altered by the consumers in direct response to price shifts. Most of us have no other way in to work thus, whatever the price is, we have to pay. In the long term we might opt for better mileage cars with our next vehicle purchase and we might even start car pooling it when we can but those are all long term responses that will take time to develop.

[Fan in Chicago]

The inherent problem in hoping, in the short term, that higher prices will dampen demand is that gasoline is a necessity.  Consumption can't be willy-nilly altered by the consumers in direct response to price shifts.  Most of us have no other way in to work thus, whatever the price is, we have to pay.  In the long term we might opt for better mileage cars with our next vehicle purchase and we might even start car pooling it when we can but those are all long term responses that will take time to develop.

407715[/snapback]

 

And I agree with you on this. But oil is used for making gasoline, diesel, plastics, electricity .... Overall the demand surge has caused this major spike.I think we got so used to the low prices of gasoline etc. that entire generations have been brought up to not think about conservation. Little things do add up. It will take a long time for Western society to get used to the fact that the more careless we are with using non-replenishable natural resources, the more we have to pay for it eventually. I think a period of sustained high prices will cause us to think about (1) higher mileage vehicle purchases (2) Renewable sources of energy. See more windfarms for electricity yet ? (3) More nuclear plants around the world - probably not the US (4) More overall conservation efforts

[philburger1]

It depends who you listen to. The most retarded company line I have heard in a long time coming from the White House is we need more refineries. Dumbest excuse ever. Pee on my leg and tell me its raining.

407663[/snapback]

 

 

there hasn't a refinery built since the 70's, but demand has increased by more than 200%.

[philburger1]

And I agree with you on this. But oil is used for making gasoline, diesel, plastics, electricity .... Overall the demand surge has caused this major spike.I think we got so used to the low prices of gasoline etc. that entire generations have been brought up to not think about conservation. Little things do add up. It will take a long time for Western society to get used to the fact that the more careless we are with using non-replenishable natural resources, the more we have to pay for it eventually. I think a period of sustained high prices will cause us to think about (1) higher mileage vehicle purchases (2) Renewable sources of energy. See more windfarms for electricity yet ? (3) More nuclear plants around the world - probably not the US (4) More overall conservation efforts

407727[/snapback]

 

 

while it would be tough short term to replace gas as fuel for cars, there is no reason home should be using oil for heating, there a bunch of other things we could us for that....

[KD in CA]

I am sorry to tell you this, but that is indeed true. I work in this industry and analyze the data very carefully. I can write a FFS type post and still would not cover half of the aspects but here are some quick notes:

- Refinery capacity is near maximum and demand has SURGED since 2004. We were on the edge of the supply demand curve and now it has been tipped over - too much demand for the supply. The market is still trying to get the demand curve down with increasing prices.

- Oil is high cos of the high end products demand and political uncertainty around Middle East (Gaza pullout, Iraq war, Saudi premier's death)

- MTBE was taken out of gasoline because of political pressure. We lost 3% of the total gasoline pool in the US because of that. This was the most moronic non-science based political move in the history of petroleum. We are replacing it with ethanol which has lower clean-air properties.

407676[/snapback]

 

 

I'm sorry, but your post doesn't fit in with the "BUSH BAD" logic that so many simpletons use to form virtually all their opinions. Thus, your expertise in the field is meaningless.

[Fan in Chicago]

I'm sorry, but your post doesn't fit in with the "BUSH BAD" logic that so many simpletons use to form virtually all their opinions.  Thus, your expertise in the field is meaningless.

407745[/snapback]

 

I speak from data unfortunately. I am anti-Bush in terms of his foreign policy but chose not to color my explanation accordingly. {I know your post was sarcastic}

[Fan in Chicago]

there hasn't a refinery built since the 70's, but demand has increased by more than 200%.

407731[/snapback]

 

Thanx for the acknowledgement of what us in the oil industry never get credit for - cheap capacity increase without parallel in any other industry.

[VABills]

I am sorry to tell you this, but that is indeed true. I work in this industry and analyze the data very carefully. I can write a FFS type post and still would not cover half of the aspects but here are some quick notes:

- Refinery capacity is near maximum and demand has SURGED since 2004. We were on the edge of the supply demand curve and now it has been tipped over - too much demand for the supply. The market is still trying to get the demand curve down with increasing prices.

- Oil is high cos of the high end products demand and political uncertainty around Middle East (Gaza pullout, Iraq war, Saudi premier's death)

- MTBE was taken out of gasoline because of political pressure. We lost 3% of the total gasoline pool in the US because of that. This was the most moronic non-science based political move in the history of petroleum. We are replacing it with ethanol which has lower clean-air properties.

407676[/snapback]

It's Bush's fault that everyone bought an SUV over the last 10 years.

[KD in CA]

It's Bush's fault that everyone bought an SUV over the last 10 years.

407768[/snapback]

 

 

It's also Bush's fault that oil prices reflect the forecast for a very active hurricane season as well as a more active long term hurricane cycle.

[Crap Throwing Monkey]

Light, sweet crude for September delivery ended up at 90 cents, reaching $65.80 a barrel, after hitting a record-high of $66. London Brent was up $1.39 at $65, after touching $65.66.

407662[/snapback]

 

Another point no one ever mentions: oil isn't all the same. Some makes "better" gasoline than others. With refinery capacity practically maxed, the only way to squeeze more gas out of the refining process is to refine the lighter low-sulfur oil...which means demand for that type goes up, because the lack of refinery capacity is driving the demand for it.

[drnykterstein]

It's Bush's fault that everyone bought an SUV over the last 10 years.

407768[/snapback]

Personally I don't mind the gas hike. I don't drive my car much anyways. It's my opinion though that everyone who is stupid enough to buy an SUV or Hummer is now getting what they deserve.

[Fan in Chicago]

Another point no one ever mentions: oil isn't all the same.  Some makes "better" gasoline than others.  With refinery capacity practically maxed, the only way to squeeze more gas out of the refining process is to refine the lighter low-sulfur oil...which means demand for that type goes up, because the lack of refinery capacity is driving the demand for it.

407832[/snapback]

 

But the crude oil is getting heavier on average. Lighter crude is at a premium over the lighter variety. One way or the other, a refiner has to pay.

[CoachChuckDickerson]

That’s like saying Anhauser Bush needs more breweries since my local convenience store was out of Budweiser yesterday.

407666[/snapback]

 

Exactly. Imagine we live in a world where milk suddenly spikes to $100 a gallon. Ben and Jerry's then releases a statement that the reason their ice cream is so expensive is because they can't keep up with demand and they need more facilities. Okey Dokey!