$4 gas at a pump near you ?

[Martin]

$4 gas at a pump near you? : Local : Albuquerque Tribune

$4 gas at a pump near you?

Squinting at the numbers rolling ever higher on the gas pump, Victor Hatcher finally cut off the supply to his blue 1965 Ford pickup truck at $40.

The 16-gallon tank could take more, but at $2.99 per gallon at the Shell station at 4701 Paseo del Norte N.E., $40 is about all Hatcher can handle.

"It eats it up," said Hatcher, 24, removing the nozzle from his tank. "I'm going to buy a 50-cc mo-ped. I hear they get about 80 miles to the gallon."

New Mexico's gas price average this week is $3.01 a gallon. That's inching close to the record set Aug. 8, 2006, of $3.09 a gallon, said Jeannie Chavez, a spokeswoman for AAA New Mexico.

And if some forecasts are correct, it could hit the previously unimaginable mark of $4 a gallon before the summer is over.

The problem, Chavez said, isn't the oil supply, but the speed at which U.S. refineries are converting the oil into gasoline.

January is usually the start of refinery maintenance season, and for some reason many refineries are taking longer to get back up and running than normal, Chavez said.

"I can't pinpoint it to one particular issue at a refinery," Chavez said. "This is causing the supply of gasoline to be lower than expected this time of year, and the demand for gas hasn't dropped."

The nature of many new state and national requirements aimed at cutting emissions are partly to blame. Those requirements call for a variety of different fuel blends, depending on the state you live in, and that's slowing down production, Chavez said.

"Making lots of different kinds of gas lessens the availability," Chavez said. "Although they supposedly run cleaner, which is good."

Across the nation, refinery production is at about 87 percent of full capacity. For prices to go down, they'd have to reach 97 percent or more, she said.

But with the summer driving season approaching, it could be a while before gas prices drop, she said.

"Americans love their vacations, and most people won't cancel because of high gas prices, even if they do cut a few corners," Chavez said. "That means demand will continue to get higher and higher for the summer."

Prices could easily top last year's record, she said.

Bloomberg News reported last week that $4 a gallon is not only possible, but probable. Business Week magazine responded a few days later that gas prices are nearing their peak, and that $4 isn't likely.

Regardless how high the price goes, Hatcher, who works as a dishwasher, busser and occasional waiter at a restaurant in Old Town, said his friends will have to pay their own way when they travel in his car.

"Just picking up friends, I usually don't ask them for gas money, but now I'm starting to have to ask them," Hatcher said.

He'll probably also start taking city buses more, he said.

That's not a bad idea, Chavez said. Neither is making sure your tires are properly inflated and your oil is changed on a regular basis, she said.

"If you maintain your vehicle and just make sure there's enough air in your tires, you can save up to 15 percent of your fuel costs," Chavez said. "People will put off getting those things done, not realizing they're throwing money out the tailpipe."

Also reducing the amount of stuff in your car can save money.

"For every 100 pounds that you leave at home and don't put in your vehicle, you save 2 percent of your fuel costs - so everybody needs to go on a diet," Chavez said with a laugh.

Eddie Johnson, 25, who was also gassing up at the Shell station Monday afternoon, said maintenance and excess weight aren't problems for him.

But his regular fuel-efficient car, a Geo Prism, has been broken for the past week. He's stuck driving a Ford F-150 pickup until the Prism is fixed, and the truck gets really bad gas mileage, he said.

"It's killing people like me who have to commute to Albuquerque from Los Lunas," Johnson said. "It's costing me $15 a day round-trip, whereas my car it's about $5 round-trip."

Still, his job repairing TVs pays enough that the rising prices aren't causing any real hardship, he said.

"You're paying maybe an extra $20 a week as the prices go up," Johnson said. "You should stay home if that's going to hurt you."

[Martin]

Gas prices reach Record Average.


Survey: Gas Prices Reach Record Average: Financial News - Yahoo! Finance

Survey: Gas Prices Reach Record Average
Sunday May 6, 7:22 pm ET
Lundberg Survey Shows Gas Prices Surge to Record U.S. Average of $3.07 Per Gallon

CAMARILLO, Calif. (AP) -- Gasoline prices have surged to a record nationwide average of $3.07 per gallon, nearly 20 cents higher than two weeks earlier, oil industry analyst Trilby Lundberg said Sunday. The previous record was $3.03 per gallon on Aug. 11, 2006.

But despite inventory fears that have sent prices higher, there are signs that the rising prices at the pump may be peaking.

Just two weeks ago, the U.S. average for a gallon of regular gas was $2.87, but the Lundberg Survey of 7,000 stations nationwide on Friday showed an increase of about 19.5 cents to $3.07. That's up 88.4 cents since Jan. 19, Lundberg said.

The nationwide average for mid-grade gasoline was $3.18 and premium was $3.28.

The nation's lowest average pump price was $2.80 per gallon in Charleston, S.C., while the highest was $3.49 in San Francisco.

The recent increases are due mostly to refinery problems, Lundberg said, noting there have been at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.

One of the nation's largest refineries, a BP PLC plant in Indiana that processes more than 400,000 barrels of oil per day, will not be operating at full capacity for several months due to unexpected repairs.

Other examples include a 170,000-barrel-per-day plant in McKee, Texas, that was shut down for a month, and a 470,000 barrels-per-day plant in Texas City operating at less than half capacity.

The outages have been reflected in weekly government data which has shown gasoline inventories falling during a season when most analysts think they should be rising. Summer driving begins Memorial Day weekend, and analysts worry refineries won't be producing enough gasoline by then to meet demand.

The Oil Price Information Service and AAA reported Friday that the national average price of a gallon of gasoline hit $3.012 that day, up 2.1 cents overnight.

Despite prices at the pump climbing past the $3 mark, analysts have said the inventory fears can only go so far, as evidenced by recent declines in oil and gas futures. Retail prices generally lag the futures markets, so consumers can end up paying more for gas even as futures prices drop.

Gasoline futures for June delivery have dropped in the last week, falling 3.12 cents Friday to settle at $2.2164 a gallon on the New York Mercantile Exchange.

Granny wants to know if oil is goin' down, how come gas is goin' up??

Oil hovers near 7-week low
May 8 2007: Crude prices steady above $61 as investors look at whether current stockpiles can satisfy summer demand.

Oil prices hovered near a seven-week low above $61 Tuesday, as investors looked at crude stockpiles to see whether they could meet upcoming demand. Despite unseasonally low gasoline stocks in top consumer the United States ahead of peak summer demand, investors have begun focusing on rising crude stockpiles and the promise of increased refinery motor fuel output.

=snip=

"There is increasing confidence that crude oil supplies will be sufficient to meet demand in the U.S. summer driving season," said Commonwealth Bank of Australia in a report. Weekly U.S. fuel stocks data is due for release on Wednesday. Gasoline inventories were expected to have snapped a 12-week string of draws last week, rising by 100,000 barrels, a preliminary poll of Reuters analysts found. Crude stocks were also expected to have risen again.

Signs of recovering U.S. oil supplies have outweighed bullish news out of OPEC producer Nigeria, where around a quarter of output is shut following rebel attacks. Fighters from the Movement for the Emancipation of the Niger Delta destroyed three major oil pipelines in Nigeria's southern delta on Tuesday, the group said in an email statement.

MORE

Oil pushes trade deficit up...

Oil prices widen US trade deficit
Thursday, 10 May 2007, The US trade deficit widened by more than expected in March, as higher oil and petrol prices sent imports to the second-highest level on record.

The trade gap grew 10.6% compared with February to $63.9bn, according to figures from the Commerce Department. Import price figures for April were also released, showing a larger-than-expected 1.3% rise.

Higher oil and petrol prices were also been blamed for the rise in the import price figure from the Labor Department. Record imports of food, beverages, animal feed and consumer goods also helped to widen the overall trade gap. But the US trade deficit with China narrowed by 6.4% to $17.2bn with exports from that country falling to their lowest level for almost a year.

The weak dollar was good news for exporters, and sales to Canada and the European Union hit record levels. Despite the large deficit in March, the trade deficit for the first three months of the year was $180.7bn, 5.7% below the figure for the first quarter of 2006.

BBC NEWS | Business | Oil prices widen US trade deficit

Granny says, "OPEC an' Big Oil are in cahoots an' dey is screwin' us all!"...

Big Oil attacked over record gas prices
Critics say mismanagement and lack of competition is behind record high prices at the pump.

May 16 2007 -- Big Oil went on the defensive Wednesday, denying accusations from a consumer group that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices. Gas prices hit $3.10 a gallon Wednesday, according to AAA. It's the fourth record day in a row, and the surge has been attributed to low gasoline supplies caused by a lack of refining capacity.

"They have no interest in building spare capacity because that would undermine their pricing power," said Mark Cooper, Director of Research for Consumer Federation of America. Cooper pointed to the record earnings at oil companies and said in any other industry this would attract new businesses.

But he said the domestic refining industry has continued to consolidate, allowing operators to shun building refineries, run existing ones at full throttle, and thus cause many of the accidents and outages the nation has experienced over the last few months. "This is just mismanagement," he said. "But they get away with it because there is no competitive discipline."

MORE

Remember when we thought $60/bbl was high?
Oil dips to $70 after 8-month high
May 18, 2007 -- Oil dipped back to $70 on Friday, after surging to an eight-month high the previous session on fears new problems at U.S. refineries will constrict gasoline supplies already at unusually low pre-summer levels.

London Brent crude slipped 25 cents to $70.02 a barrel by 0929 GMT, eroding some of the previous day's gains of more than $2 or 3.3 percent, the biggest one-day rise since a 5 percent surge in late January. U.S. crude was up 13 cents at $64.99 having rallied 3.7 percent on Thursday.

News of a glitch at Murphy Oil's refinery in Meraux, Louisiana, coupled with maintenance at several major plants in Texas, has exacerbated fears that gasoline supplies may grow tighter as the peak-usage driving season draws near. "Gasoline demand is still very strong despite higher prices," said ANZ Bank analyst Andrew Harrington. "There are expectations for a strong driving season."

U.S. pump prices recently rose above $3 a gallon -- cheap by world standards but expensive in the view of American drivers. Travel and automobile group AAA said on Thursday it expects a 1.7 percent rise in the number of Americans who are likely to travel 50 miles or more over the Memorial Day holiday that marks the start of the summer vacation season.

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Gas gettin' too high for their SUV's...

House OKs Penalty for Gas Price Gouging
May 23, 2007 -- Responding to high costs at the pump, the House approved legislation Wednesday that would outlaw gasoline price gouging. Many lawmakers said that may be easier to say than to detect or enforce.

The legislation would penalize individuals or companies for taking "unfair advantage" or charging "unconscionably excessive" prices for gasoline and other fuels. Opponents said the language was too vague and that the Federal Trade Commission, which would enforce the law, has not clearly defined price gouging.

"I don't know what `unconscionably excessive' means," said Rep. Joe Barton, R-Texas. The bill's chief sponsor, Democratic Rep. Bart Stupak of Michigan, said he had no doubt the FTC would be able to determine price gouging once the agency had a law to uphold.

The measure would establish the first federal law against energy price gouging. The FTC now can investigate price manipulation under antitrust laws. Currently, 29 states have price gouging statutes; enforcement varies widely. Stupak's proposal only would go into effect - and then for just 30 days - if the president declared an energy emergency.

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The real reason behind high gas prices...

Oil refinery building boom abroad - not in U.S.
Wed, May. 30, 2007: With gasoline prices averaging $3.22 for a gallon of regular nationwide over the Memorial Day weekend, traditional economic logic might suggest that this would be a good time to invest in new U.S. oil refineries and increase the supply of gasoline.

Yet no new refinery has been built in the United States in three decades, only one is in the works and oil companies are scaling back planned investments in new, expanded or modernized U.S. refineries rather than increasing them. Overseas, however - where it's generally cheaper, faster and easier to build oil refineries - a boom in construction is under way to meet the growing demand for gasoline in the United States and in big developing countries such as China and India. That means that Americans increasingly will be filling their tanks with imported gasoline.

In 2005, imported liquid fuels - mostly oil and an increasing amount of gasoline - accounted for about 60 percent of U.S. consumption, according to the Energy Information Administration, the statistical arm of the Energy Department. In a long-term assessment this month, the EIA said that figure could grow to 67 percent by 2030. "We are outsourcing refining," said Severin Borenstein, an economist and energy expert at the University of California in Berkeley. "I think that this is primarily because of community resistance ... people don't want to live by refineries, but they still want the gasoline."

Refineries are being built in Saudi Arabia, India and China. For Saudi Arabia, the world's leading oil producer, tight refining capacity amounts to a brake on its oil sales. India and other developing nations are building refineries to serve both their growing domestic markets and the increasing demand for gasoline in China, which by 2020 may have as many cars as the United States does.

More McClatchy Washington Bureau | 05/30/2007 | Oil refinery building boom abroad - not in U.S.

Not until 2015.

Hmm...

Once again evidence that the current pricing is driven by speculation...

Oil and gas may run short by 2015, say industry experts
22 July 2007 - Humanity is approaching an unprecedented crisis when not enough oil and gas will be produced to keep industrial civilisation running, the world's top oilmen warned last week.

The warning – which is being hailed as a "tipping point" on both sides of the Atlantic – marks the first time that the industry has accepted that it may soon no longer be able to meet demand for its products. In Facing the Hard Truths about Energy, it gives authoritative support to concern about impending shortages, following a similar alert by the International Energy Agency less than two weeks ago. The 420-page report, the most comprehensive study ever carried out into the industry, has been produced by the National Petroleum Council, a body of 175 authorities that reports to the US government. It includes the heads of the world's big oil companies including ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Shell and BP.

It is also remarkable for the conversion of its chairman, Lee Raymond, the recently retired chief executive of ExxonMobil, who led opposition against action to tackle global warming, and became environmentalists' most prominent bogeyman. The report argues for "an effective global framework" to manage emissions of carbon dioxide – "incorporating all major emitters" – and urges the US to cut the pollution that causes climate change. The report concludes that "the global supply of oil and natural gas from the conventional sources ... is unlikely to meet ... growth in demand over the next 25 years". It says that "many observers think that 80 per cent of existing oil production will need to be replaced by 2030" to keep up present supplies "in addition to volumes required to meet existing demand." But, it adds, there are "accumulating risks to replacing current production and increasing supplies".

Though vast amounts of oil and gas remain underground, "complex challenges" and "global uncertainties" are likely to put an end to "the sufficient, reliable and economic energy supplies upon which people depend". And the crunch could come sooner, with oil production becoming "a significant challenge as early as 2015". This chimes with the International Energy Agency's prediction that oil supplies could become "extremely tight" in five years. The predictions should send a shiver down humanity's collective spine as a shortage of oil and gas has been predicted to cause industrial collapse, market crashes, resource wars and a rise in poverty. Some forecast that fascist regimes will rise out of the chaos.

Chris Skrebowski, editor of the Energy Institute's Petroleum Review, said the report's publication showed the industry "'fessing up that it really has a problem on its hands". Until now, he said, "companies, full of share options, have been terrified of frightening the markets" by revealing the truth. The report says the fuel efficiency of cars should be increased "at the maximum rate possible" and there should be a crackdown on 4x4s. It calls for "aggressive energy efficiency standards for buildings, and measures to "set an effective cost for emitting carbon dioxide" to combat global warming.

Oil and gas may run short by 2015, say industry experts - Independent Online Edition > Climate Change

Get ready to get hit at the pumps again within the next week or two...

OPEC weekly average oil price hits record high
July 23, 2007 -- The weekly average oil price of the Organization of Petroleum Exporting Countries (OPEC) reached a record high of 72.72 U.S. dollars per barrel last week, up 0.86 dollars from the previous week, the cartel's secretariat said on Monday.

The OPEC daily average oil price had dropped to below 72 dollars since historical high of 72.83 dollars on July 16. With the drop in the gasoline stock in the United States and crude oil production in Angola, an OPEC member, OPEC's daily average oil prices rebounded to a new record of 73.67 dollars on July 20.

Mohamed Hamli, rotating president of OPEC and energy minister of the United Arab Emirates, said on Sunday that no evidence could prove that the high oil prices had disturbed the growth of the global economy.

However, he stressed that OPEC would increase crude oil supply if necessary, in a departure from a previous OPEC statement emphasizing that the current crude oil supply in the global market was sufficient, and that soaring oil prices should be attributed to geopolitical factors and insufficient refinery capabilities in the United States.

Marketing analysts believed that the crude oil stock was still above a five-year average level in spite of last week's shrinkage in the U.S. gasoline stock, while the demand for gasoline in the United States would be close to peak in summer, leading international oil prices to still hover at a high level.

Xinhua - English