Posted on 05/15/2004 2:17:54 PM PDT by wagglebee
With gasoline prices hovering around $2 a gallon, the blame game has begun and political partisans are looking to settle scores. As per usual, however, the political theatrics are drowning out the real but complicated story behind the price spike.
Rising crude oil prices explain some of the price increase. Since November, the price of West Texas crude has climbed $5.60 a barrel; translated into gasoline prices, that's about 13 cents per gallon.
But gas prices have jumped by more than twice that — by 29 cents per gallon.
The crude-price increase is not the result of production cutbacks. Despite OPEC's announced cuts, cartel production rose by about 1 million barrels a day since last year. Non-OPEC production is up another 1.5 million barrels a day.
But demand is increasing faster than production, particularly in China. Red-hot economic growth in Asia is driving the world crude market.
If we accept that about 13 cents of the price increase for a gallon of gas since November is because of surging demand for crude, that leaves 16 cents unaccounted for. Some of the price spike can be attributed to the temporary rise we see about this time every year, when refineries switch from making winter-time gas blends to more expensive but environmentally friendly summer blends.
Tight oil-refining capacity is also playing a role — not because environmentalists have shut the door on capacity expansions, but because demand for gasoline in the Far East is claiming almost all the previous unused capacity.
A tight market, however, means suppliers can charge more for gasoline. Profit margins in the refining sector are up, which means investment in new refining capacity will follow.
New environmental regulations, however, threaten to dampen the incentives to invest in new refining capacity for the American market. Of particular concern is a new federal rule that began to take effect this year requiring refineries to strip most of the sulfur out of gasoline (search). Retooling refineries to meet the new standard is a major one-time expense. Refineries in Europe and Japan have already done it to comply with similar regulatory standards. Many U.S. refineries will lay out the needed capital, but others are expected to simply close — and some already have.
(Excerpt) Read more at foxnews.com ...
Our gas is at $2.09 a gallon in northern Maine now. I wish the truckers would all go on strike! Stop the movement across the United States. THAT would fix them!
Clinton did do it. The rules were put in place during the late Nineties calling for a gradual reduction of sulfur content. The final phase is kicking in now.
This was one of the main reasons that the oil industry supported GWB in 2000, but he left the old rules in place.
Going to be REAL TOUGH to blame it on a Bush who wanted to drill in Anwar and committed troops to Iraq in a war for oil!
IT HAS BEEN CALCULATED THAT IF EVERYONE IN THE UNITED STATES DID
>NOT
> PURCHASE A DROP OF GASOLINE FOR ONE DAY AND ALL AT THE SAME
>TIME, THE
> OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.>
>
>
> AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET
>LOSS OF
> OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE
>OIL
> COMPANIES.>
>
>
> THEREFORE MAY 19TH HAS BEEN FORMALLY DECLARED "STICK IT UP THEIR
>behind
> " DAY AND THE PEOPLE OF THIS NATION SHOULD NOT BUY A SINGLE DROP
>OF
> GASOLINE THAT DAY.>
>
>
> THE ONLY WAY THIS CAN BE DONE IS IF YOU FORWARD THIS E-MAIL TO
>AS MANY
> PEOPLE AS YOU CAN AND AS QUICKLY AS YOU CAN TO GET THE WORD OUT.>>
>
>
> WAITING ON THIS ADMINISTRATION TO STEP IN AND CONTROL THE PRICES
>IS NOT
> GOING TO HAPPEN. WHAT HAPPENED TO THE REDUCTION AND CONTROL IN
>PRICES
> THAT THE ARAB NATIONS PROMISED TWO WEEKS AGO?
>
>
> REMEMBER ONE THING, NOT ONLY IS THE PRICE OF GASOLINE GOING UP
>BUT AT
> THE SAME TIME AIRLINES ARE FORCED TO RAISE THEIR PRICES,
>TRUCKING
> COMPANIES ARE FORCED TO RAISE THEIR PRICES WHICH EFFECTS PRICES
>ON
> EVERYTHING THAT IS SHIPPED. THINGS LIKE FOOD, CLOTHING, BUILDING
>
> MATERIALS, MEDICAL SUPPLIES ETC. WHO PAYS IN THE END? WE DO!
>
>
> WE CAN MAKE A DIFFERENCE. IF THEY DON'T GET THE MESSAGE AFTER
>ONE DAY,
> WE WILL DO IT AGAIN AND AGAIN.
>
>
> SO DO YOUR PART AND SPREAD THE WORD. FORWARD THIS EMAIL TO
>EVERYONE YOU
> KNOW. MARK YOUR CALENDARS AND MAKE MAY 19TH A DAY THAT THE
>CITIZENS OF
> THE UNITED STATES SAY "ENOUGH IS ENOUGH"
I remember the summer of 2001 when Grey-out Davis was blaming Bush for the fact that California couldn't provide enough power to meet its needs, and the media ate it up. So I'm sure they will find a way to say this is Bush's fault.
A strike would fix whom? A trucker strike would be laid squarely at the feet of 43. On the network news you would see the most gut-wrenching stories they could make out of any fallout from such a strike.
They know Kerry would not bother them.
Increased crude prices account for only a slight portion of the oil gas price rise. The biggest percentage cost rises are in refining and marketing. Just look at the oil company profits.
Actually, it's the opposite. I saw a post on a politically neutral message board saying, paraphased, "Gas prices over 2.00. Do you think the war was not about oil?"
It's nice to have conspiracy theories wherein no matter what happens, it always support your theory.
Gas prices go down--We went to war for cheaper oil.
Gas prices stay the same--According to Peak Oil Theory, we should've been paying much higher prices by now. So we went to war for cheaper oil.
Gas prices go up--We went to war to make oil more expensive to line the pockets Bush's buddies.
It's kinda like the Bob Woodward's Saudi Arabia oil scandal. The media slammed Bush for conspiring with the Saudi prince to lower gas prices for re-election. Then, when it was proved that Woodward took it out of context, the media and John Kerry slammed Bush for NOT caring about lowering gas prices.
LOL.
Seriously: Let's all fill up our tanks on the 18th so we'll be ready for the gas protest on the 19th. LOL! =)
I don't know what the answer is. I just know that we are all clutching at straws...........I don't worry much about gasoline prices, since I don't travel much. It's the home heating fuel that has "me" worried.........
Does anyone have the answer as to WHY gasoline is so HIGH???? I hear a lot of excuses, but none ring true to me.
Yeah but the libs arguement was is was war for oil. If we get oil, then the price goes down. You would have to be real stupid....or Alan Colmes to buy that!
The solution to the gas crisis is simple......
Take the money you saved when gas prices were low in the cycle.....$.95 a gallon and apply them to the current pricing.....
No problem,
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