cravnravn Posted February 18, 2009 Share Posted February 18, 2009 (edited) http://news.yahoo.com/s/ap/20090216/ap_on_...prices_unhinged NEW YORK – Crude oil prices have fallen to new lows for this year. So you'd think gas prices would sink right along with them. Not so. On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year. On Friday gas went a penny higher. To drivers once again grimacing as they tank up, it sounds like a conspiracy. But it has more to do with an energy market turned upside-down that has left gas cut off from its usual economic moorings. The price of gas is indeed tied to oil. It's just a matter of which oil. The benchmark for crude oil prices is West Texas Intermediate, drilled exactly where you would imagine. That's the price, set at the New York Mercantile Exchange, that you see quoted on business channels and in the morning paper. Right now, in an unusual market trend, West Texas crude is selling for much less than inferior grades of crude from other places around the world. A severe economic downturn has left U.S. storage facilities brimming with it, sending prices for the premium crude to five-year lows. But it is the overseas crude that goes into most of the gas made in the United States. So prices at the pump will probably keep going up no matter what happens to the benchmark price of crude oil. "We're going definitely over $2, and I bet we'll hit $2.50 before spring," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. "This is going to be an unusual year." On the last day of 2008, gas went for $1.62 on average, according to the auto club AAA, the Oil Price Information Service and Wright Express, a company that tracks transportation data. The recession in America has dramatically cut demand for crude oil, and inventories are piling up. So prices for West Texas crude have fallen well below what oil costs from places like the North Sea, Saudi Arabia and South America. That foreign oil sells in some cases for $10 more per barrel — and that doesn't even include shipping. Brent North Sea crude, which feeds some East Coast refineries — and therefore winds up at many gas pumps around America — now costs about $7 more per barrel than the West Texas crude. Deutsche Bank analysts say the trend should continue. Historically, West Texas International crude has cost more. So nobody bothered building the necessary pipelines to carry it beyond the nearby refineries in the Midwest, parts of Texas and a handful of other places. Now that the premium oil is suddenly very inexpensive, refiners elsewhere can't get their hands on it. "It's so cheap," said Lynn Westphall, the senior VP of external affairs at San Antonio-based Tesoro, which owns a half dozen refineries on the West Coast and Hawaii. "But you can't just build a pipeline to everywhere. We know we can't get it." Tesoro's refineries in North Dakota and Utah use locally drilled oil and Canadian oil, which also has been running about $10 more per barrel than West Texas crude. So why not build more pipelines? Because investing billions of dollars over several years makes no sense when the prices could just flip a year from now to where they were before. "How long is WTI going to be cheaper than Venezuelan oil? Than Canadian?" asked Charles T. Drevna, president of the National Petrochemical and Refiners Association. "You just don't build a pipeline like that." At the same time, refiners have seen the same headlines as everyone else about job losses and consumer spending. They've slashed production just to avoid taking losses on gasoline no one will buy. Result: Higher gas prices. "Why should a refiner produce more gasoline when the stuff we produce is not being used?" Drevna said. Of course, complex explanations of the diverging price paths of West Texas crude and gas are unlikely to placate frustrated drivers. Memories of last summer's $4-plus gas have not receded. "Drivers are being ripped off even more now than before," said Stuart Pollok, who was filling up recently at a Chevron station in downtown Los Angeles. He pointed out Exxon Mobil Corp. reeled in billions in profits last year when oil prices neared $150. Others see the conspiracy reaching higher. "It got really low during the elections and now it's going back up," said Christel Sayegh, a 23-year-old graphic designer in Los Angeles. "They do that every election, though, right?" I dont buy this BS for 1 minute, now all of a sudden theres a different type of oil thats used for gasoline..Gimme a friggin break. Edited February 18, 2009 by cravnravn Quote Link to comment Share on other sites More sharing options...
BeenAround Posted February 18, 2009 Share Posted February 18, 2009 It's the end of the world...as we know it. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 18, 2009 Share Posted February 18, 2009 There's usually a delay between the market and the pump. You'll see local prices fall soon enough, I think. So long as the prices stay down. Go look at the crude index... it was as high as 45 bucks two weeks ago. And only got under 40 a week ago. It certainly has to do with whose oil is being bought... if we're not buying our own reserves from Texas then stupid us. But the purchasers will shift when they have a chance... soon enough. Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 18, 2009 Author Share Posted February 18, 2009 dc, 36.00 a barrel, we havent seen that since the 80's and we were paying 99 a gallon, now I know we wont see under a buck for gas again, but 1.89 as Im paying for fuel is Exxon, Chevron etal trying to get their profits back. If gas is 2.50 a gallon as projected and oil is 40.00 a barrel, an internal investigation should be in order. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 18, 2009 Share Posted February 18, 2009 Except that the article explains it clearly. The $40 a barrel is for Texas oil right now. Overseas oil costs more. Your gas station and most oil companies buy from overseas. Why? Because the infrastructure is set up that way and American oil generally costs more. Can we expect them to suddenly change every last structure of the oil market because prices in the US dropped sharply? International oil prices are going to fall as well; they are falling. It will take time for local prices to reflect that, but they will as well. Also - quit making things up. Oil prices were as low as $30 (or less) as recently as 1999/2000. It hasn't been forever. Prices shot up in the last 5 years and have been unstable ever since. But in the late 90s and early 00s, we were under 30 many a day. In the 1980's prices were BELOW $20 a barrel at times. That's where 99c comes from. Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 18, 2009 Author Share Posted February 18, 2009 Also - quit making things up. Oil prices were as low as $30 (or less) as recently as 1999/2000. It hasn't been forever. Prices shot up in the last 5 years and have been unstable ever since. But in the late 90s and early 00s, we were under 30 many a day. Im appalled that you think I would make something like that up, Black and White 1972-76 was at 40 a barrell. 76-79 Crude was below 30 a barrell, 80 -85 it was between 40 and over 65 a barrell. 85-04 we were at the 20-30 a barrell range. http://www.wtrg.com/prices.htm Quote Link to comment Share on other sites More sharing options...
dc. Posted February 19, 2009 Share Posted February 19, 2009 That's the same chart I was looking at and article when I said you were making it up. In 1978-1981, in the midst of a few wars and conflicts, prices jumped. But by 1983-1987, prices were UNDER $10 a barrel at some times. THAT is when you saw gas at 99c. When prices per barrel were higher, that's when we had that big ol' gas shortage that I'm sure you remember. The point remains... prices in he 80s were much lower than they are now. And that's why your per-gallon cost was so much lower. And even as recently as 2000, we had VERY VERY low per barrel and per gallon costs. You asserted that the last time we had seen $35/barrel was in the 80's and that the price per gallon then was 99c. I'm saying we last saw $35/barrel was just four year ago. And that before that, for most of the 2000's and 1990's, we were well UNDER that price. I remember gas prices being between 1.00 and 1.25 for most of my childhood and my time in high school. And look at the graphs... that's when barrel prices were lowest. In 03/04/05 when we see the spike begin, that's when you see prices pushing $2 a gallon. The price we're seeing now is perhaps 10c higher per gallon than in 03/04 when we last saw this barrel price and that is because of a grossly unstable market. Yes, I know this is OPEC countries only... but their prices tend to be higher than non-OPEC, with the exception of the American oil we don't consume. Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 19, 2009 Author Share Posted February 19, 2009 But by 1983-1987, prices were UNDER $10 a barrel at some times. THAT is when you saw gas at 99c. 89-90 was the last time, thats when I had my boat..Instead of paying 1.50 gassing up at the marina, we bought 10 5 gallon cans and purchased gas on the road which was .99 down on North Pt Blvd.. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 19, 2009 Share Posted February 19, 2009 Right. But the 99c gas is equated with barrels under $20. Not with $36 barrels. Quote Link to comment Share on other sites More sharing options...
JPPT1974 Posted February 20, 2009 Share Posted February 20, 2009 Gas is now getting lower. And wonder, if that is telling you something?! Quote Link to comment Share on other sites More sharing options...
ForceEight Posted February 20, 2009 Share Posted February 20, 2009 Gas is now getting lower. And wonder, if that is telling you something?! According to whom? Gas is only rising, and will probably be $2.50-$3 again by spring. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 20, 2009 Share Posted February 20, 2009 According to whom? Gas is only rising, and will probably be $2.50-$3 again by spring. That's funny, Ken. Everytime oil gets anywhere near $50 a barrel these days, it topples all the way back down to $35 on fears of lack of demand... and the lack of demand isn't changing anytime soon. To be close to $3 again the price of a barrel would have to be close to or over $100. Meanwhile... I get as pissy about oil companies as the next guy. But some things we ask for. We are not freaking entitled to cheap prices and high wages. We just aren't. And we're paying for that unreasonable expectation. We all want to make 100,000 bucks, pay no taxes, have perfect roads and safety, and have everything be cheap. And now we pay for it. You want it cheaper? In food that means unhealthy substitutes (high fructose corn syrup for plain sugar). In other items that means outsourcing of jobs and production. And eventually, with all that outsourcing of production to keep prices low, you are going to see job loss in this country. We all want cheap oil and lots of it and no environmental ramifications. If 30 years ago companies had bumped gas prices by 10c a gallon to accommodate new pipeline costs and investment in other energy options, everyone would have laughed and whined about the 10c hike. Now we pay for it. Oil's the only legitimate option at the moment and we are stuck paying what we demand for. There's enough cars, enough boats, enough everything eating oil all day long that we have to deal with our choices. WE ARE NOT ENTITLED TO CHEAP OIL. WE ARE NOT ENTITLED TO ANY OIL. Get used to it. You have to either choose quality or price. You don't get both. Quote Link to comment Share on other sites More sharing options...
ForceEight Posted February 20, 2009 Share Posted February 20, 2009 ...I don't disagree with any of that. But to say that the barrel price has to go up for prices to increase is ignorant. First off, prices go up in late winter and early spring by default, attributable to refineries universally conducting maintenance this time of year. There's no cause-and-effect involved here; it's traditional and inevitable. Secondly, and more importantly, demand has decreased greatly because so many people are out of work, using more efficient cars, and generally holding onto their pennies. As you read above, prices are already up because demand is down and refineries have a lot of discounted oil piling up. That trend should obviously continue. You'll notice that I said $2.50-$3. Not $3. While reaching $3 isn't impossible, it is certainly on the high side. Most places that forecast prices have them at about $2.50 or so by Memorial Day. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 20, 2009 Share Posted February 20, 2009 As you read above, prices are already up because demand is down and refineries have a lot of discounted oil piling up. That trend should obviously continue. Excess stock-piles tend to cause prices to go down... not up. And for prices to top 2.10 a gallon, you would have to see a dramatic increase in the per-barrel price... at least to $60. So long as demand stays low and barrel prices stay between 30 and 60 bucks, we won't see gallons over 2.10-2.15. Even with routine maintenance and whatever intangibles you want to throw in. Hell, OPEC has already 'slashed production' by 3.5m barrels over the last 4 months in efforts to keep prices up... and it continues to fail. Oil went up $4 today. I bet you it will go down 30c tomorrow, then up $1 Monday... then down $6 Tuesday. Welcome to 2009. Because of the massive fluctuations, pumps will stay between 1.75 and 1.95, but won't go up excessively. Quote Link to comment Share on other sites More sharing options...
ForceEight Posted February 20, 2009 Share Posted February 20, 2009 Pumps are at $1.97 nationally today, and $1.92 in Maryland. We'll see. Quote Link to comment Share on other sites More sharing options...
Spen Posted February 20, 2009 Share Posted February 20, 2009 Boy do I hate high fructose corn syrup. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 20, 2009 Share Posted February 20, 2009 Not sure if you're serious there or its your dry wit, Spen. Don't mind either way. But I never really cared nor paid attention to HFCS versus Sugar until a parent of one of my swimmers, who is a doctor and researcher, started telling me all the differences and this and that. And I started to really figure out the difference. It's digested in your livers, not your intestines, and strains your body, etc etc. And what truly pisses me off is that government subsidies to the corn industry are the only reason we have HFCS. The subsidies are so ridiculously high that there was so much excess corn, they decided to figure out a way to make it used more.... just to pad the farmers pockets anyway. Ditch the subsidies, give me sugar! Especially now that ethanol products are making corn even MORE valuable to produce, which is creating somewhat of a shortage of wheat products (which is why your bagels and bread are costing more - wheat producers are making corn). Quote Link to comment Share on other sites More sharing options...
dc. Posted February 20, 2009 Share Posted February 20, 2009 Whoops... might have been wrong. Oil down almost $2 already today. Quote Link to comment Share on other sites More sharing options...
ForceEight Posted February 20, 2009 Share Posted February 20, 2009 Not sure if you're serious there or its your dry wit, Spen. Don't mind either way. But I never really cared nor paid attention to HFCS versus Sugar until a parent of one of my swimmers, who is a doctor and researcher, started telling me all the differences and this and that. And I started to really figure out the difference. It's digested in your livers, not your intestines, and strains your body, etc etc. And what truly pisses me off is that government subsidies to the corn industry are the only reason we have HFCS. The subsidies are so ridiculously high that there was so much excess corn, they decided to figure out a way to make it used more.... just to pad the farmers pockets anyway. Ditch the subsidies, give me sugar! Especially now that ethanol products are making corn even MORE valuable to produce, which is creating somewhat of a shortage of wheat products (which is why your bagels and bread are costing more - wheat producers are making corn). It's always his dry wit. ALWAYS. Regardless, to simplify your reasoning: high fructose corn syrup is cheaper than sugar. Quote Link to comment Share on other sites More sharing options...
Spen Posted February 20, 2009 Share Posted February 20, 2009 Not sure if you're serious there or its your dry wit, Spen. Don't mind either way. But I never really cared nor paid attention to HFCS versus Sugar until a parent of one of my swimmers, who is a doctor and researcher, started telling me all the differences and this and that. And I started to really figure out the difference. It's digested in your livers, not your intestines, and strains your body, etc etc. And what truly pisses me off is that government subsidies to the corn industry are the only reason we have HFCS. The subsidies are so ridiculously high that there was so much excess corn, they decided to figure out a way to make it used more.... just to pad the farmers pockets anyway. Ditch the subsidies, give me sugar! Especially now that ethanol products are making corn even MORE valuable to produce, which is creating somewhat of a shortage of wheat products (which is why your bagels and bread are costing more - wheat producers are making corn). No, I am dead serious in my dislike of it. I read up on it years ago and it pissed me off. I have since read at least one article pondering a correlation between HFCS and the rising weight of Americans. I like Iced Tea but only drink my own. There is no reason for a 16 ounce bottle to have 200 calories. If it was non sweetened and I added my own sugar it would be 30 to 45 calories. ( I think each sugar pack is 15 calories) I have noticed a bit of a backlash beginning against HFCS. Numerous store products proclaim they are HFCS Free. Its a start. It's always his dry wit. ALWAYS. Not this time! I was on my way to bed when I posted that and was tired or I would have posted more then. Quote Link to comment Share on other sites More sharing options...
dc. Posted February 21, 2009 Share Posted February 21, 2009 Regardless, to simplify your reasoning: high fructose corn syrup is cheaper than sugar. Well, yeah. But my point is that it's cheaper because of government interference. Which is just another stupid thing - subsidies. We don't want to pay an extra 50c a gallon for milk or for corn or whatever... so instead we agree to hire taxes and the government makes the same payment for us... and what do we get? Well, we still end up giving our money... and then MORE... to producers because they make double by taking subsidies AND selling products like HFCS. No, I am dead serious in my dislike of it. I read up on it years ago and it pissed me off. I have since read at least one article pondering a correlation between HFCS and the rising weight of Americans. I like Iced Tea but only drink my own. There is no reason for a 16 ounce bottle to have 200 calories. If it was non sweetened and I added my own sugar it would be 30 to 45 calories. ( I think each sugar pack is 15 calories) I have noticed a bit of a backlash beginning against HFCS. Numerous store products proclaim they are HFCS Free. Its a start. Exactly. And if you read about how they make the stuff... its even worse. It's impossible to avoid HFCS entirely, and there's nothing to say you should... but why can't we just have sugar??? I don't drink much, but my liver's going to be the age of my dad's in 10 years courtesy of HFCS. Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 21, 2009 Author Share Posted February 21, 2009 And for prices to top 2.10 a gallon, you would have to see a dramatic increase in the per-barrel price... at least to $60 1.99 here dc in Harford Co, and Oil was at what 35.00 a Barell yesterday. Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 21, 2009 Author Share Posted February 21, 2009 Since Katrina, we have been getting raped at that pumps by oil companies.. The 4th quarter profits came out in January and Exxon's were down a 33% http://www.exxonmobil.com/corporate/files/...arnings4q08.pdf So what happens the first quarter of 09?? Oil Prices fall yet gas has been on a nickel a week incline. The reason for the increase? Corporate greed. Prior to the reports this week, did you realize that the oil we get out of the middle east is not the oil used for our gasoline? I just find it amazing that last year when we were paying 3.50 a gallon for gasoline that the rise and fall of the prices were based on what what OPEC was charging for a barell of oil. And what I find amusing is prices will rise now, they will fall around Memorial Day, stay steady til the 4th of July, then one forecaster will say 1 four word catch phrase, and that will be our demise.."Hurricane in the Gulf" Quote Link to comment Share on other sites More sharing options...
thundercleetz Posted February 21, 2009 Share Posted February 21, 2009 I have not read anything in this topic, but after reading the title all I have to say is: America is never raped, we DO the raping! Quote Link to comment Share on other sites More sharing options...
cravnravn Posted February 21, 2009 Author Share Posted February 21, 2009 America is never raped, we DO the raping! No, the American people are raped, by American business.... Quote Link to comment Share on other sites More sharing options...
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