February 16, 2009 8:06 AM
Ready for $2.50 a gallon gas?
Crude prices are down, but gas prices are up - and some experts are saying to prepare for $2.50 a gallon gas by this summer.
Seems like just yesterday we were paying around $1.30 a gallon. Ah, the good old days.
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.
February 16, 2009
8:54 AM
gr8fuldude writes:
$2.50/gallon is still cheap by historical standards, though it will be funny to watch the fools whine when they ignored the lessons of the past and did not move to something economical.
It is interesting to note though that my bus is still running the same number of people as it was last summer, so maybe we are learing as a society. Will be interesting to watch.
February 16, 2009
9:02 AM
Bob writes:
http://www.azcentral.com/arizonarepublic/news/articles/2009/02/16/20090216gasprices0216.html
"Crude oil is getting cheaper - so why are gas prices up?"
48 commentsby Chris Kahn and John Porretto - Feb. 16, 2009 12:00 AM
Associated Press
"
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"
"Meanwhile, refiners have seen the same headlines as everyone else about job losses and consumer spending. They've slashed production to avoid taking losses on gasoline no one will buy. Result: Higher gas prices"
I drive about half now than last year. Will keep moving to green alternatives. Bike more walk more.
eventually go hybrid or electric.
No on opec. no more making terrorist nations rich.
February 16, 2009
9:32 AM
SASQUATCH writes:
HIGHLY UNLIKELY TO HIT $2.50 unless you are saying that the economy is ALREADY in a full-blown rebound and recovery that began last month--long before dime-one ever gets spent in Obama's urgent and crisis "stimulus" emergency. Obama's doom and gloom, 1929 and Tobacco Road scenario says otherwise and that we don't recover for many years.
Crude is still near record cyclical lows,; the usual and very normal wiggles and giggles in price at the pump and regional shortages and surpluses suggest prices won't stray too far north, and are just as likely to head south.
Meanwhile, and on the other hand, the imbecile Salazar is pulling leased oil acerage out of bounds as he continues his insane war agains oil and natural gas. That could be worth some upside damage that is largely psychological to consumer wallets.
February 16, 2009
9:39 AM
P. Reilly writes:
Sorry Charlie, Gas will be .99 cents gal. by July 4th. The combination of too much supply (Yes!) and a very bad economy will make gas come in at that price. I can even see gas wars! .75 cents may be the norm! Hotel rates will plummet in the Mountains keeping people vacationing in Colorado instead of someplace else. Get ready! You won't believe it!
February 16, 2009
9:41 AM
prima facie writes:
Beats last summer's four bills per.
February 16, 2009
9:48 AM
Truth writes:
Well, it will be worth paying $2.50/gallon once again just to prove sascroths wrong once again. We all remember his predictions of McCain winning the election, mass chaos at the DNC and all the rest.
On the bright side, we can all be glad we are not married to this gal:
http://www.cnn.com/video/#/video/living/2009/02/16/missed.flight.madness.cnn
February 16, 2009
10:14 AM
ML writes:
As long as they don't publish any more sob stories about some short-sighted moron paying $100 to fill up his hummer or excursion, I'm ok with it. Besides, I take the train and bus every day!
February 16, 2009
10:14 AM
prima facie writes:
Naturally, going back to 25 cents a gallon would be better, but $2.50 beats last summer's four bills per.
February 16, 2009
10:29 AM
whatever writes:
Can we say, Price gouging. It never fails that gas prices rise during the summer and holidays when driving increases. Its called market manipulation and it should be illegal and the oil companies should be charged and held accountable.
February 16, 2009
10:31 AM
Shaggy writes:
The bus and train is all fine and dandy if it works for you.
However, it simply isn't pragmatic for everyone.
In fact, it simply isn't possible for most!
Too bad we now have Salazar and the rest of the Liberals in office who object to providing Americans with American oil.
They would love for gas to go $15:00 bucks a gallon so they can push their green agendas on the American people.
Barry and Salazar both said so.
February 16, 2009
10:40 AM
Anonymous writes:
"HIGHLY UNLIKELY TO HIT $2.50 unless you are saying that the economy is ALREADY in a full-blown rebound and recovery that began last month"
now close your eyes and imagine an Exon mobil board /shareholders meeting. Shareholders:
what are you doing to maximize our return?
Exon mobil: hike prices as much as we can
lets cut supply of gasoline.
We are still at the mercy of petrol. wise up America. Wise up. (sas hasn't been right yet)
February 16, 2009
11:29 AM
Shaggy writes:
You know you are a redneck if the value of your car depends on how much gas is in it.
February 16, 2009
12:02 PM
Anonymous writes:
lol
February 16, 2009
1:48 PM
dave writes:
A woman missed her flight at the boarding gate HKIA full 7min version watch here: WATCH
February 16, 2009
2:04 PM
KW writes:
"some experts say..."
Who are these "experts?" Probably the same people who predicted $5+ a gal last summer with no end in sight. I predict their prediction bites the dust like every other dire prediction they make.
Truth - Whoa dude. Talk about cutting off your nose there. Would making SAS eat his words really be worth that much to you? If that's the case, and if gas does hit $2.50 a gallon then just give me your paychecks each month and you'll end up feeling marvelous.
February 16, 2009
3:01 PM
Tbone writes:
"HIGHLY UNLIKELY TO HIT $2.50 unless you are saying that the economy is ALREADY in a full-blown rebound and recovery "
HIghly unlikely? Dude, gas was $4/gallon last summer, 6 months into the recession.
Oh wait, the neocons keep saying the economy is doing fine.
February 16, 2009
3:38 PM
Jim writes:
" woman missed her flight at the boarding gate HKIA full 7min version watch here: WATCH"
Thats SaraPalin after finding out she has to go back to Alaska.
February 16, 2009
8:08 PM
CL writes:
"Well,as soon as it looked like we were going to start drilling offshore,gas started going down.As soon as Hussein Obama put the kibosh on offshore drilling,gas started back up."
Jimminy, gas (and oil) prices dropped when demand crashed. The price of gas started going up as the excess worked through the supply lines. It had nothing to do with offshore drilling
Right now active rig counts in the US are at their 2005 levels and are almost 1/2 their peak from last summer.
http://www.wtrg.com/rigs_graphs/short/rigus.gif
US offshore rig counts are up 5.5% over last year while US land based rig counts are down 25.4% from last year
http://www.wtrg.com/rotaryrigs.html
So the decline in production came from land based rigs, not offshore rigs.
February 16, 2009
10:41 PM
momma y writes:
They forget that both federal and state politicians are all hot and bothered to get a huge tax increase on gas while it's cheap so the people won't notice. Were we ever that stupid or was it just the political and media image of the average voter?
Whatever happens, the rest of the story will be written when the people get tired of waiting for the government to save them from reality.
February 17, 2009
6:13 AM
Anonymous writes:
"Our Good Friends on the Left are big on market manipulation to make incompetent alternative energy competitive"
interesting interview a few months back on saudi Arabia. They cut back production too and dropped oil. They are determined to keep all of us dependent on "cheap oil" .
Its time to become energy independent. Brazil IS.
its an exporter of sugar cane ethanol.
The right is so out of touch with reality.