Why gasoline prices have risen sharply in the last month and why they should start to fall relativel
73 replies, posted
[QUOTE]NEW YORK (CNNMoney) -- After one of the fastest and steepest runups in recent memory, it's possible gasoline prices may have peaked.
Retail gas prices fell more than half a cent Friday to a [B]nationwide average just above $3.90 a gallon[/B], according to AAA, continuing a decline started late last week that has shaved almost 4 cents off the price of gas.
[img]http://i2.cdn.turner.com/money/2012/04/13/news/economy/gas-prices/chart-oil-gas.top.gif[/img]
The decline mirrors a moderate drop in crude oil prices, which account for roughly 70% of the cost of gas.
Crude prices have fallen for a few reasons, [B]but the biggest is Iran's decision to negotiate over its nuclear program.[/B]
"All of the bad things we were really worried about don't look like they will happen," said Kevin Lindemer, an independent energy consultant that has worked for Irving Oil and Cambridge Energy Research Associates. "If we have an uneventful summer, there's nothing fundamental that should cause prices to go much higher."
[B]But having an uneventful summer is still a big if.
Iran could walk out of the nuclear negotiations -- beginning Saturday in Istanbul -- at any time. A hurricane could hit the Gulf of Mexico. Protests could again rock the Middle East.[/B]
But barring a big event, it appears [B]the world is adequately supplied[/B] with crude oil.
[B]"Oil prices should fall," said Chris Lafakis, an economist at Moody's Analytics. "That should provide a tail wind for the economy."[/B]
As tensions ease with Iran, markets become less fearful of a major disruption in oil supplies. Iran, after all, has repeatedly threatened to close the Strait of Hormuz, through which a fifth of the world's oil passes.
But there are other factors pushing down oil prices as well.
[QUOTE][B]Saudi Arabia:[/B] Assurances from Saudi Arabia that the country stands ready to cover any loss of oil from Iran due to tightening sanctions appears to have calmed markets.[/QUOTE]
[QUOTE][B]The economy:[/B] A weaker jobs report from the United Sates last week and growing fears of a slowdown in China are tempering demand projections. High prices and better fuel efficiency in the United States have also been cutting into demand.[/QUOTE]
[QUOTE][B]Pipeline reversal:[/B] Pipeline operator Enbridge plans to reverse the flow of a pipeline in the U.S. Midwest.
The pipeline currently brings oil from the Gulf of Mexico to Cushing, Okla., where there is a bottleneck of supplies. Reversing that flow will add another 400,000 barrels a day to global oil markets.[/QUOTE]
[QUOTE][B]Return of offline supplies: [/B]On Thursday, the International Energy Agency said it expects some of the 1.1 million barrels of oil a day that's currently offline from places such as Canada, the North Sea, and South Sudan will return to world markets in the second half of the year. IEA expects an additional 700,000 barrels a day in oil production from non-OPEC countries in 2012.
IEA also notes that OPEC production is at 3-1/2-year highs.
"Amid rising actual OPEC production, and a sizeable implied build in global stocks, prices have subsequently eased," the agency said in its report. "For now at least, the earlier tide of remorseless market tightening looks to have turned."[/QUOTE]
[QUOTE][B]Caution ahead:[/B] However, all analysts warn that the situation can turn quickly, and some remain skeptical that Iran will stay out of the headlines throughout the summer.
"The odds of a military conflict are higher than what's being discounted today," said Robert McNally of the Rapidan Group, an energy consultancy. "I think the market is relatively complacent."[/QUOTE]
Gasoline prices could also rise as the industry switches over from winter gas to cleaner summer blends.
Tom Kloza, chief oil analyst at the Oil Price Information Service, noted that the switch currently underway in the Chicago region led to a 40 cent spike in prices there.
Despite the recent dip in gas prices nationally, Kloza is sticking to his earlier prediction for a national average of $4.25 a gallon by Memorial Day -- which would be a new record high. [/QUOTE]
Source: [url]http://money.cnn.com/2012/04/13/news/economy/gas-prices/index.htm?source=cnn_bin[/url]
I knew it all would come down to something in the middle-east
Hahaha lowering prices after they've raised them. Like they'd do that.
Regardless of extraordinary factors, gas still goes up every summer and lowers every winter. It isn't like gas will magically fall a euro/dollar or more, since demand is still rising.
The article's reasons for gas prices to fall are also incredibly major what-ifs, like how the recent jobs report will effect consumer demand or even business growth, and the pipeline and offline supplies bit is still very much a down-the-road thing, and wouldn't effect gas prices on the short term.
To be honest it's high time it fell. The prices are almost 20% higher than what they were in the beginning of the year here.
1.88€/liter here :(
I hate to be a cynical, conspiracy nut type, but I'm pretty sure the only real reason that gas has gone up in price is really because the oil barons want more money and had an excuse to raise it.
[QUOTE=BananaFoam;35570447]I hate to be a cynical, conspiracy nut type, but I'm pretty sure the only real reason that gas has gone up in price is really because the oil barons want more money and had an excuse to raise it.[/QUOTE]
That is certainly affecting it, but another reason is the increasing global demand because of the industrialization of other less-developed nations (for example, India is rapidly getting more modern and their population is enormous). It's speculated that prices will get much higher in the coming years because of these nations' increased demand, thus raising the global demand. This is another major reason an alternative and reusable fuel source needs to be utilized on a massive scale.
I really hope that doesn't pan out, though. In Chicago, prices are getting WAY too close to $5/gallon. And to think a few years back, $3 felt absurd.
No! It's all Obummer's fault! This man is using his voodoo magical powers to make our hard working citizens pay more for gas!
[IMG]http://i.imgur.com/aweV5.png[/IMG]
That picture has some truth to it. Ignoring obama, the constitution really has no point in America now-a-days
I think it's OPEC trying to starve our economy to weaken us.
[QUOTE=BananaFoam;35570447]I hate to be a cynical, conspiracy nut type, but I'm pretty sure the only real reason that gas has gone up in price is really because the oil barons want more money and had an excuse to raise it.[/QUOTE]
As much as I hate to be a cynical, conspiracy nut, too, I recall hearing something about the raising on oil taxes by the government as the cause of the rising gas prices.
[QUOTE=BananaFoam;35570447]I hate to be a cynical, conspiracy nut type, but I'm pretty sure the only real reason that gas has gone up in price is really because the oil barons want more money and had an excuse to raise it.[/QUOTE]
I could really only see this as a legitimate claim if the oil barons knew that Iran was going to cooperate. Even then, the rise in gas prices in this circumstance was more due to market forces. Since the price of oil would be far higher in the future if a conflict with Iran occurred, futures contracts for oil of course went into high demand. Maintaining or lowering oil prices while futures contracts are in such high demand doesn't particularly make economic sense, so the price of oil in the future has to rise. If it doesn't quite make sense why, it is because the oil companies would have no incentive to sell oil at a low price when they know they can sell it at a higher price in the future. It's like if you knew something was likely to be worth twice its value tomorrow, you would prefer to sell it tomorrow as opposed to today. This doesn't at all imply that speculation is bad, especially in that it provides a critical market force of preventing overproduction in the present and preventing underproduction in the future.
[QUOTE=The Baconator;35570642]No! It's all Obummer's fault! This man is using his voodoo magical powers to make our hard working citizens pay more for gas!
[IMG]http://i.imgur.com/aweV5.png[/IMG][/QUOTE]
It's funny that people blame Obama directly for the gas prices when he's actually been trying to ween us off of middle eastern oil. I find it even funnier that ultra-conservatives like my dad want to call Obama a Christian hating Muslim who wants to run our country into the ground, but when you look at a lot of his policies and ideas it's more or less to become less involved with the middle east; hence why he's not a big supporter of Israel. :v:
But if gas prices will go down Newt Gingrich will lose his campaign platform!!
[QUOTE=POLOPOZOZO;35571523]But if gas prices will go down Newt Gingrich will lose his campaign platform!![/QUOTE]
what was that? Drill the moon for oil?
[QUOTE=BananaFoam;35570447]I hate to be a cynical, conspiracy nut type, but I'm pretty sure the only real reason that gas has gone up in price is really because the oil barons want more money and had an excuse to raise it.[/QUOTE]
no that's just capitalism. not really a conspiracy.
Obama needs to hit his magical gas price raising/lowering button, simple!
It's been stuck at 3.78 a gallon here in Nevada for about 3 weeks.
I'm hoping it goes down, taking a large chunk out of my paycheck every week to pay for gas isn't cool.
[quote]Crude prices have fallen for a few reasons, but the biggest is Iran's decision to negotiate over its nuclear program.[/quote]
bullshit
these companies are just looking for excuses to increase their profit margins
11 dollar/gallon master race
I still remember when it was $3.50 a gallon, those were the days....
[QUOTE=thisispain;35571752]no that's just capitalism. not really a conspiracy.[/QUOTE]
exactly the reason why capitalism is fucking revolting
[QUOTE=Drsalvador;35573173]exactly the reason why capitalism is fucking revolting[/QUOTE]
please go on, i would love to hear your opinions on global economics and how you think that Stalin was just misunderstood.
I haven't even noticed a change, I'm dumping shell v-power in my car and it's been 4 even for ages
[editline]14th April 2012[/editline]
[QUOTE=Dr.C;35573120]I still remember when it was $3.50 a gallon, those were the days....[/QUOTE]
I remember gas being under 1.50 a gallon, my conscious memory just barely missed under a dollar
Among the wide range of idiotic things Obama has done during his presidency, having fuel prices skyrocket is one of them. His administration uses the turmoil in the middle east as a scapegoat for the high oil prices and continually preaches "his hands are tied".
The thing that he isn't telling everyone is that he and the tree hugging EPA are cock blocking everyone who is trying to start up oil exploration in territories within the U.S. that would drastically reduce oil prices. The U.S. has enough oil in its own territories to supplant nearly the entire dependence on foreign oil.
Even if he keeps cock blocking the domestic oil exploration, he could open up the strategic oil reserve and break the nose of all the speculators that are driving the price of oil through the roof globally.
[QUOTE=Mon;35572456]bullshit
these companies are just looking for excuses to increase their profit margins[/QUOTE]
The companies that produce crude oil have nearly nothing to do with the final price per barrel of oil. Oil is a commodity and is not linked with the cost of production. Speculators who have no ties or interests in oil companies are the ones that drive the cost of crude oil up or down, and they can do it for any and every reason.
The same speculators that buy and sell oil and gas futures also buy and sell commodities in other markets and fuck with their pricing too, it's not just oil.
4.40$ a gallon, unleaded, over here in Southern California... Cheers to a regular bicycling routine.
[editline]14th April 2012[/editline]
[QUOTE=bohb;35573888]The U.S. has enough oil in its own territories to supplant nearly the entire dependence on foreign oil.[/QUOTE]
Yes, but for how long? It was never a matter of money- it was always a matter of outlasting every other superpower by consuming everything else, the subsequent monopoly is just a sweetener.
[QUOTE=NightmareXx;35573233]please go on, i would love to hear your opinions on global economics and how you think that Stalin was just misunderstood.[/QUOTE]
no i acknowledge there is honestly no better way but that doesn't stop it from being disgusting
analogy/simile time: it's like laxatives, if you want to cease your constipation you have to take them, but theyre really embarassing and an unpleasant experience
Gas prices would fall if Obama would let us drill oil off the coast.
The only risk would be environmental
[QUOTE=bohb;35573888]Among the wide range of idiotic things Obama has done during his presidency, having fuel prices skyrocket is one of them. His administration uses the turmoil in the middle east as a scapegoat for the high oil prices and continually preaches "his hands are tied".
The thing that he isn't telling everyone is that he and the tree hugging EPA are cock blocking everyone who is trying to start up oil exploration in territories within the U.S. that would drastically reduce oil prices. The U.S. has enough oil in its own territories to supplant nearly the entire dependence on foreign oil.
Even if he keeps cock blocking the domestic oil exploration, he could open up the strategic oil reserve and break the nose of all the speculators that are driving the price of oil through the roof globally.[/QUOTE]
What would you rather we do? Tear the planet apart? Turn green fields and forests into scarred oil fields and refineries? The biggest problem with oil is that it's running out, and we need to find something else or the entire planet will be left without electricity and transportation, set back 200 years because everything we use relies on oil and we're too stubborn to change that.
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