I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: Dec 02, 2005 Posts: 6684 Location: Oil-addicted Southern Californucopia
Posted: Sat May 05, 2007 8:54 am Post subject: Re: Another Gasoline Record
Go figure:
I just don't get it... _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Jun 18, 2005 Posts: 3970 Location: In a van down by the river
Posted: Sat May 05, 2007 2:57 pm Post subject: Re: Another Gasoline Record
I disagree the refineries appear to be the bottle neck.
What we are seeing is that the refinery feed stock is steadily getting worse and worse as far as grade goes.
No where in the world has the best oil been saved for last. We have long since passed peak light sweet crude.
Now an increasingly larger larger proportion of feedstock is crap oil that is harder to process and harder on equipment. The current US refineries are having trouble adjusting to these tougher grades of oil.
So what we are seeing is a result of PO and the continuing fact that the good and easy oil is gone.
Why the gasoline market went down?
I would guess that the money is betting that an economic slowdown is coming and demand will drop.
But who knows markets are always doing crazy stuff, and they are definitely designed to make money for players on the inside.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Sat May 05, 2007 4:25 pm Post subject: Re: Another Gasoline Record
Eli wrote:
I disagree the refineries appear to be the bottle neck.
What we are seeing is that the refinery feed stock is steadily getting worse and worse as far as grade goes.
No where in the world has the best oil been saved for last. We have long since passed peak light sweet crude.
Now an increasingly larger larger proportion of feedstock is crap oil that is harder to process and harder on equipment. The current US refineries are having trouble adjusting to these tougher grades of oil.
So what we are seeing is a result of PO and the continuing fact that the good and easy oil is gone.
Why the gasoline market went down?
I would guess that the money is betting that an economic slowdown is coming and demand will drop.
But who knows markets are always doing crazy stuff, and they are definitely designed to make money for players on the inside.
Well put. As far back as two years ago, US gasoline production plus imports have started coming in less than total US gasoline demand. If not for an emergency transfer of gasoline inventories from a number of OECD countries after Katrina, we would have had gasoline shortages already.
PO is the primary problem here – more specifically light sweet crude which peaked two years ago also. Reorganizing the gasoline and supply and distribution network to adjust to diminishing peak light sweet crude is not something the refineries will voluntarily want to pay for. Apparently the technology for lower quality crude is more complex, and subject to more breakdowns, which has contributed to lower refinery utilization. No doubt the lame for failing to rapidly adjust to changing oil markets partly lies with the oil companies – as well as the government (for operating the SPR like some price controller) and even the American public (for not demanding higher mileage vehicles and standards). But more importantly, private industry does not have enough financial incentive to secure additional supplies and send them to the right refineries at the right time, at least not until national gasoline prices average somewhere around $3.50 or more (based on the present oil price). As the source, composition, and reliability of oil supplies continuously change, refineries will demand a higher return on investment for risks taken. _________________ It's already over, now it's just a matter of adjusting.
Joined: Aug 14, 2004 Posts: 2068 Location: San Diego, Ca.
Posted: Sat May 05, 2007 10:19 pm Post subject: Re: Another Gasoline Record
$3.46 at the corner for regular unleaded. That is the highest I have ever seen it. _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Joined: Sep 16, 2004 Posts: 4863 Location: Southwest WI
Posted: Sat May 05, 2007 10:41 pm Post subject: Re: Another Gasoline Record
2.99 out here in Omaha. I noticed 2 stations i've been @ in Des Moines and Omaha that atleast one pump was out of service which oddly, were the ones i pulled up to. _________________ Clothing should be optional.
Joined: Apr 07, 2005 Posts: 225 Location: West of Chicago
Posted: Sat May 05, 2007 11:08 pm Post subject: Re: Another Gasoline Record
Cyrus wrote:
JohnLudi wrote:
Saw $3.48 for regular unleaded in Chicago this eve. We have a tax here that pulls the price up a bit...but it was not that much cheaper when I and my GF took a foray out to the burbs a few hours ago.
Slowly catching up to CA...
Good to see another Chicagoan here!
Western 'Burbs, here - www.gasbuddy.com has us at 3.29 - 3.34 as of Saturday night.
Joined: Jun 23, 2005 Posts: 100 Location: Chicago!!!
Posted: Sun May 06, 2007 11:33 am Post subject: Re: Another Gasoline Record
Cyrus wrote:
JohnLudi wrote:
Saw $3.48 for regular unleaded in Chicago this eve. We have a tax here that pulls the price up a bit...but it was not that much cheaper when I and my GF took a foray out to the burbs a few hours ago.
Slowly catching up to CA...
Good to see another Chicagoan here!
Pleased to meet ya!!!
Nice to know I'm not the only one...
I think Chicago may be a bit more Peak-Oblivious than a lot of other cities due to the pretty (OK...COMPARATIVELY) stellar public transportation system we have here.
Posted: Sun May 06, 2007 11:57 am Post subject: Re: Another Gasoline Record
Regular gas is running around $3.259 to $3.539 or so in Sacracramento while the maximum premium price in the area (in Auburn at least) is about $3.759. The national average has now passed $3/gallon. It will pass $3.069, the Katrina high, this next Friday, May 11, 2007, and should pass the all time high in 1981 of about $3.229, about May 26, 2007 or so.
Here is an article that was printed in yesterday's S.F. Chronicle:
San Francisco Chronicle, Saturday, May 5, 2007.
Average gas price tops $3
Chonicle Staff and News Services
Drivers acrross the country now know the pain Californians fel at the gas pump. Or at least the pain we felt back in March.
The average cost for a gallon of gasoline in the United States has topped $3, AAA said Friday, as growing demand and shrinking supplies put a squeeze on drivers.
Californians passed that milestone two months ago. The state's average for regular gasline hit $3.46 Friday, jumping 2 cents overnight. San Francisco , meanwhile, reached $3.60, with no slowdown in sight.
The rise nationwide follows 12 weeks of falling inventories, as refineries kept units shut for maintenance and unexpected repairs.
Stockpiles fell to 193.1 million barrels last week, the U.S. Energy Department said, the lowest since October 2005, when Gulf Coast refineries were shut for repairs after the devastation of hurricanes Katrina and Rita.
Analysts used to believe that the psychologically significant $3 milestone would force drivers to conserve, and indeed, demand for gasoline dropped slighly last year. But this spring's price increase hasn't had the same effect. Deliveries of gasoline are up 1.9 percent so far this year from a year earlier, according to Energy Department data.
"It's the one product where [for which] there there is no short-term substitue," said Tom Robinson, president of Robinson Oil Corp. of San Jose, which operates 32 Rotten Robbie convenience stores in the Bay Area. "People get frustrated because they don't have an alternative. They can't go out and buy a fuel-efficient car" the same day prices rise.
The national average for regular gasoline at the pump rose 2.1 cents to $3.012 a gallon on Thursday, AAA said on its Wedb site. The record is $3.057 [to be passed again this Friday, May 11, 2007], set Sept. 5, 2005. California's average has been setting fresh records for days.
"No one likes it, but very few people are surprised when it happens," Robinson said.
As people head into the summer driving season, choosing where to vacation might hinge on transportation costs. About 88 percent of leisure travel happens by car, AAA spokesman Mike Pina said.
At today's prices, a 2007 Honda Accord on an 876-mile round trip from Atlanta to Orlando would consume 30.2 gallons of gasoline at a cost of $88.32, according to AAA's fuel-cost calculator. The same trip in a Land Rover Range Rover would use 46.1 gallons and cost $134.82.
The miserly Toyota Prius would consume 17.2 gallons at a cost of $50.22, while a Nissan Armada sport utility vehicle would burn 67.4 gallons, costing $197.04.
"Based on last summer's experience, people just simply cut back on other areas," Pina said. "They still take a vacation, but they stay within their states or eat at less- expensive restaurants."
For the Memorial Day weekend at the end of May, the number of Americans traveling by car may increase bu as much as 2 percent if gasoline prices stay where they are, Pina said. In 2006, AAA estimated 37.6 million Americans traveled 50 miles or more from home during the holiday.
Adjusted for inflation, gasoline is still cheaper than it was 26 years ago, according to the Energy Department. The average of $1.417 per gallon in March 1981 equals $3.20 today.
Posted: Sun May 06, 2007 6:53 pm Post subject: Re: Another Gasoline Record
CNN is reporting that the average cost of gas in the US has passed the high reported after hurricane Katrina.
Quote:
ATLANTA (CNN) -- The price of gasoline has hit a new record high, averaging $3.07 for a gallon of self-serve regular in the United States, a survey reported Sunday.
Still, in raw numbers, the $3.07 beats the previous high of $3.03 in August.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Sun May 06, 2007 7:19 pm Post subject: Re: Another Gasoline Record
Yes, record highs. It's happened so fast that even economists have yet to begin considering the implications of high prices on the US economy.
At first, they will trot out tired stories, like it's been higher before - adjusted for inflation. Maybe so, but our 21st century US (and Canadian) economy now runs on cheap oil. A 50% gain in price of gasoline, and large gains in the price of diesel, have started an economic shockwave - the consequences of which we can not predict clearly at this time.
Even so, the optimists rule the media - pounding out story after story of new oil fields, alternative energy, and hopes for more gasoline imports.
On CBS News, Lundberg goes into greater detail than the linked Bloomberg story below. While this Lundberg quoted below blames refineries for high prices, which is like blaming the supermarkets for high bread prices when there is a wheat shortage, Lundberg says on CBS that European imports will be coming and will build up US supplies.
Hey Lundberg - do you realize that US wholesale gasoline prices are less than last year when adjusted for the fall of the US dollar? So why would Europe want to part with its dwindling gasoline supplies for less money than before?
Quote:
U.S. Gasoline Pump Price Rises to $3.07 a Gallon, Lundberg Says
By Dan Thomas
May 6 (Bloomberg) -- U.S. gasoline at the pump rose 20 cents during the past two weeks to $3.07 a gallon, the first time the price has been above $3 since Aug. 11, Trilby Lundberg said, citing her survey of 7,000 filling stations nationwide.
The increase came as refinery shutdowns for repairs reduced inventories at a time when supplies would normally rise before the summer driving season, which begins next month. Wholesale gasoline futures traded in New York rose above $2.44 a gallon on April 30, the highest since May 11 last year.
``After weeks of refining capacity problems, in the past two weeks, there were at least 12 more incidents here in the U.S. and around the world that have tightened gasoline supply,'' Lundberg said in an interview. ``Surely this time it has to be the end of the rise'' in gasoline prices.
Bloomberg _________________ It's already over, now it's just a matter of adjusting.
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