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 ...
I noticed that here in NYS, Sam's and B.J.'s were a good $.30 to $.40 a gallon cheaper than anyone else in the area for the whole Labor Day weekend. The highest I paid was $3.19 on Sunday night.
Same here in SE Tennessee. I paid $2.89 for diesel yesterday after seeing a high of $3.09 just a few days ago....
The panic is nearly over.
I have lived through the 1973 and 1978 oil embargos/shortages....
There is plenty of oil in the ground... IT'S REFINERIES & MORE HOLES in the ground we need....if we plan to use petrolem based products.
Sadly...since it is as big a political issue as Social Security....we might as well move on to another energy source...
In my area, SE Tennessee, I've seen several dozen stations with $20 limits. The owners say they've imposed the limits to prevent runs on gasoline.
September 8, 2005
The Wrong Answer for High Gas Prices
By Steve Chapman
http://www.realclearpolitics.com/Commentary/com-9_8_05_SC.html
-snip-
It's hard to see why oil companies shouldn't make a lot of money when the commodity they provide is suddenly in short supply. After all, they are vulnerable to weak profits or even losses during times of glut. Back when Americans were enjoying abundant cheap gasoline, the joke was that the surest way to make a small fortune in the oil industry was to start with a large fortune.
Oil companies are also subject to the whims of nature. No one is holding a charity fund-raiser for the businesspeople whose rigs and refineries were smashed by Katrina. No one will come to their aid if prices drop by half.
Besides, high prices serve two essential functions: encouraging production and fostering conservation. Spurred by the lure of windfall profits, oil companies will move heaven and earth to get more gasoline to consumers. Shocked by the tab when they fill up a 5,600-pound SUV, motorists will look for opportunities to leave the Suburban at home. They may even commit a sin not covered by the Ten Commandments: coveting their neighbor's Prius.
Prices keep flucuating here. Between $3.19 and $3.45. Literally, one day last week there a few stations that went down to $2.99 for a few hours then back up to $3.25. Every day there is two stations that go up and down in a matter of hours.
When do I get my $1.19 a gallon gas back??? Should I sell my SUV once and for all?
I should have been clearer: there is an unsettling report that Saudi production has peaked and can only decline from here. I would imagine lots of mideastern countries will face the same scenario at some point not many years from now.
I am not totally familiar with the wells you are referring to: why were they unprofitable before? does it take too long for the oil to seep around the rocks or is it that there is not much there to start with?
Already down from $3.19 to $2.99 here.... and will continue to fall.. that jack up of .75 a gallon in a day was just gouging, at least in this area... those who remained calm will buy it cheaper... those that ran around like idiots will be burning their $3.19 gas that they put into every container they could find for the next few weeks cursing themselves and gas prices continue to fall.
In eastern Massachusetts we seem to be holding steady anywhere from $3.19 -> $3.40.
I live in SE TN also, but I'm up in Ohio for the week. I noticed that Kangaroo stations in that area were having trouble with supplies on Friday and Saturday, but prices were holding at $3.10 at most outlets when I left town on Sunday.
The shortages were a bit sporadic. I spoke with a dealer at an Amoco/BP station in Soddy that had run out of unleaded - she said that there were two levels of stations, and that those that sold diesel and gas were on the first tier while stations without diesel were second tier and were subject to supply problems.
Up here in Ohio, there are no supply problems, but prices are around $3.00 per gallon.
"I remember a dollar a gallon gas"
I was paying 12 cents a gallon when I was in high school, so what?
We have cut our use and so have a lot of other people I know.
Yup. Same here. We're actually planning the necessary trips for max. efficiency & picking up stuff for other people when we're out.
$3 is a psychological point. Anything over $3 and people reduce the amount of gas they use. $2.99 would not affect driving patterns.
It was under a $1 just before the first Gulf War. Things were never the same since.
So are we! It's so easy to do. We haven't bought gas for our car since the day before the hurricane. We would make it two weeks, but it's my mom's birthday, she lives 40 miles from me, and I promised I'd take her out to dinner tonight.
List three restrictions removed. I do not believe there was any removed.
The upside is that we're getting a lot more projects done around the house!
Hmm. We used to pay 3K for 386 computers. Now we pay a lot less for more powerful computers. We proved we would pay 3K for computers, why did the computer companies ever lower prices? I don't know anything about biology, and therefore don't opine on it. Why people who don't know anything about basic economics insist on sharing their opinion on it I have no idea.
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