Posted on 09/08/2005 2:54:36 AM PDT by Crackingham
The pain of $3 at the pump could end soon for many Americans, but the respite in gasoline prices may be modest -- and only temporary, energy experts said Wednesday.
In any event, gasoline prices rarely fall as quickly as they go up, so consumers should get used to higher prices at the pump.
The disruptions to gasoline supplies and U.S. refining capacity that helped drive gasoline prices to record highs are being fixed. But the wider-than-normal gap between wholesale and average retail prices was driven in large part by those supply disruptions, according to the Geoff Sundstrom, a spokesman for AAA.
"With each passing day, based on what we're hearing about the industry being restarted, this current environment will ease," said Sundstrom.
He said that there is normally about a 60-cent difference between wholesale prices and retail prices, with the difference going to distribution, marketing and profits for station owners. But the gap has risen to nearly $1 in the last week after Katrina, he said.
And it could be a while before prices fall back to around $2.60 a gallon, where they stood on Aug. 26, before the storm hit.
"We may be a couple of weeks away from seeing meaningful relief," he said.
In commodities markets, gasoline futures fell Wednesday along with crude oil prices ahead of the weekly U.S. fuel inventory due Thursday morning.
Crude oil futures rose less than gasoline futures after Katrina, and have fallen much more quickly, retreating to pre-Katrina levels on Monday.
"Basically what is happening is the industry is trying to stop a run on wholesale gasoline by gas stations," said Sundstrom. "The gas station owners don't want to under price the market and possibly run out of gasoline."
(Excerpt) Read more at money.cnn.com ...
According to Steve Forbes the gas bubble will soon burst and we will be seeing 30 to 32 dollar a barrel oil. We'll see....
Sure it is. We all proved to the oil companies we'd pay whatever price they want. Supply and demand.
The Hampton Roads area of Virginia already has several stations back below $3, with two at $2.75
Either way we need nore drilling and refineries.
Sure it is. That is why Oil prices have dropped $6 a barrel in the last week. But they do not call it Constantly Nattering Nonsense for nothing.
Nonsense. Supply and Demand it is but exactly OPPOSIT the point you make. Higher the Demand, the more suppliers move in to the market. So, Where do I make MORE Selling 1000 gallons at $3.50 or 1500 Gallons at $2.50? Do the math, take some basic Econ courses then come back and tell us about "Supply and Demand".
Minnesota never went over 2.99 and has all ready dropped $.21 in the last 5 days.
Yep, but the higher price means we are also bring more domestic production back on line that we stopped when Oil dropped so low during the late 1980s. Hopefully this time we can figure a way to KEEP it. I am a Free Trader but MAN, I would really like a tarriff on imported oil.
The thing is, they've started to see indications
of a drop in demand in the US.
I remember a dollar a gallon gas, back
in...what?..1994-5?
I feel lucky in a way. I put my car (13 mpg) in the shop for some work just before the price shot up. It should be ready Friday or Saturday.
Local stations here in central Wisconsin dropped to $2.99 yesterday.
$2.99 a gallon.
I find it very interesting that despite lower taxes, gasoline in NW Indiana for all stations is 2.99 and has held steady for one week. prior it was bouncing up and down lik a ping pong ball. alos more peculiar is this is what Cook County in illinois is charging....
If $3 a gallon of gas is here to stay, next elections some elected officials aren't.
"Wait a while, the high prices are forcing increased production everywhere, to bear fruit all at the same time, then the collapse will ensue."
I'm not sure that is true at all...the high price has forced releases from strategic reserves both here and in Europe.
You can't just turn the knob and viola: increased production. Lots of wells are at capacity and our refineries certainly are.
Your numbers are completely arbitrarily chosen to prove your point. We could just as easily reverse them to prove the opposite point. At some point, people will find it economical to carpool, which will reduce the demand and thus the price. At 99 cents a gallon, no one thought it was worth it to carpool to and from work. At 3.00 they start to think about it. This problem will fix itself without any intervention from the government. I wouldn't mind less traffic to tell you the truth. Long live the free market economy!
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