Environment & Energy

phantom power

(25,966 posts) Sat Mar 24, 2012, 06:59 PM Mar 2012

Americans have pumped less gas every week for the past year.

Americans have pumped less gas every week for the past year.

During those 52 weeks, gasoline consumption dropped by 4.2 billion gallons, or 3 percent, according to MasterCard SpendingPulse. The decline is longer than a 51-week slide during the recession.

The main reason: higher gas prices. The national average for a gallon of gas is $3.89, the highest ever for this time of year, and experts say it could be $4.25 by late April. As a result, Americans are taking fewer trips to restaurants and shopping malls. When they take a vacation, they're staying closer to home.

http://www.philly.com/philly/business/personal_finance/20120323_ap_stuckwithhighgaspricesdriversjustpumpless.html?c=r

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Americans have pumped less gas every week for the past year. (Original Post) phantom power Mar 2012 OP

Oil is $105-110 a bbl. Why is gas $4? louis-t Mar 2012 #1

Your numbers are wrong Yo_Mama Mar 2012 #2

ok, my numbers are wrong. louis-t Mar 2012 #3

No, look at the context of what you were suggesting Yo_Mama Mar 2012 #4

louis-t

(23,309 posts)

1. Oil is $105-110 a bbl. Why is gas $4?

Reply to phantom power (Original post)

Sat Mar 24, 2012, 07:31 PM

Mar 2012

It was $4 when oil was $140 a bbl. I almost had a Cheney when I went to Kmart to buy a single quart of oil to get me to the next oil change. $6 a quart! $6!

Yo_Mama

(8,303 posts)

2. Your numbers are wrong

Reply to louis-t (Reply #1)

Sat Mar 24, 2012, 09:34 PM

Mar 2012

Some oil is supplied on contract and some is bought on the market. Brent spot has been running above 120 and WTI spot has been in the 106-115 range.

The cost of oil that matters is the acquisition cost of oil to refiners:
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=R0000____3&f=M

As of January 2012, it was $107.24 in comparison to January 2008's $86.48. Those are the latest figures we have, but the cost since has gone up.

It really is the price of oil, but the price of oil is partly determined by buys to hold on the theory that prices will rise, and ECB's large money injections over the last few months have probably increased the available cash to do this.

In 2008 prices went up, but for quite a while refining price impacts were limited because of much lower supply contracts.

The peak cost of oil to refiners in 2008 was under $130; it is not that far off what refiners are paying now, which is probably above $113.

Page 26 (external) of the US International Trade report gives a table (Exhibit 17) of average imported crude prices per barrel. Of course it only goes up to January, it will be a bit before we even get February figures. But it does give you an idea of where prices are for imports.

You cannot look at WTI spot prices and claim that that is what refineries are paying.

louis-t

(23,309 posts)

3. ok, my numbers are wrong.

Reply to Yo_Mama (Reply #2)

Sun Mar 25, 2012, 03:29 PM

Mar 2012

But you just spent 5 paragraphs to tell me I was off by $3 on the low side and $10 on the high side.

Yo_Mama

(8,303 posts)

4. No, look at the context of what you were suggesting

Reply to louis-t (Reply #3)

Mon Mar 26, 2012, 09:18 PM

Mar 2012

It was $4 when oil was $140 a bbl.

To which I replied:
As of January 2012, it was $107.24 in comparison to January 2008's $86.48.

Perhaps I explained myself badly - oil is often bought months in advance, and demand drops during the peak pricing during 2008 produced a glut of product so that refineries stopped making profits and stopped buying that much oil.

I share your shock at the costs, but I think the current effective price of oil pretty well explains it; I don't believe that these oil prices are produced by anything except speculation, however. And I think the speculation comes mostly from the money dumped into the marketplace by the ECB, combined by withdrawals from other commodities and a relative shift to oil.

As in 2008, demand is being affected by oil prices and it does not appear like the speculative bubble can run much longer. China raised fuel prices recently. Car sales are falling off in China. And Europe.

If you will go to this link, you will see what I am talking about:
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMA_EPM0_PTG_NUS_DPG&f=M

(I hope)

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