Posted on 05/28/2008 5:52:17 AM PDT by MichaelP
Santa Monica, CA - U.S. gasoline prices rose more than 33 cents a gallon to $3.937 in the last month despite driving cutbacks that have steadily reduced demand, said Consumer Watchdog. Oil prices sagged today along with U.S. economic indicators; yet even if they continue to fall, motorists are unlikely to see much relief at the pump -- or at the grocery story, with diesel breaking the $5.00 mark.
"Producers who have been making their record profits from drilling and selling oil are now trying to do the same on the refining end by keeping fuel supplies short in the summer driving months," said Judy Dugan, research director of the nonprofit, nonpartisan Consumer Watchdog. "High oil prices, combined with a drive to increase refinery profits, will be a double whammy on consumers this summer."
In recent months, refiners have cut back their production to match drops in consumer demand and prevent retail prices from dropping. This May, U.S. refineries have operated at an average of 86.5% of their maximum, while the modern average for May, especially before last year, was about 95%. (see weekly refinery utilization averages since 1990 at http://tonto.eia.doe.gov/dnav/pet/hist/wpuleus3w.htm and historic monthly averages at http://tonto.eia.doe.gov/dnav/pet/hist/mopueus2m.htm ) National gasoline prices hit $3.937 on average yesterday, according to both AAA and the federal Energy Information Administration's weekly gasoline report. Diesel was about 40 cents a gallon higher than gasoline, and in high-priced California now averages $5.124. Some stations in the state are selling diesel for $5.50 a gallon and up, impacting the cost of almost all goods and food.
"The speculative frenzy in oil prices may be cooling slightly, but consumers are unlikely to benefit," said Dugan. "Congress is talking about getting speculation under control but should not ignore the role of refineries in price spikes just because pump prices have recently been driven by crude oil prices. Unless government also oversees refineries and the national supply of gasoline and diesel, consumers and the economy won't see the benefit if crude oil prices decline." Consumer Watchdog noted that major oil companies reaped record yearly profits from their refining businesses in 2006 and 2007, at some points likely profiting by $1.00 or more a gallon just on refining. This drove pump prices to then-records at a time when oil cost half what it does now. "Refineries want to boost their profits in the summer," said Dugan. "With drivers cutting back and truckers going bankrupt it's still business as usual for oil companies, even if it means wrecking the economy."
Funny to see the very same government that is making more from this crying about high prices. What fraud! However, most people fall for it hook, line and sinker. So how can the Oil companies overcome this. They need to strategize.
And if we opened up more areas for drilling, we could be funding our own government instead of some of our enemies.
I never see the LS Media mention that 3/4 of ExxonMobil's revenue comes from overseas.
If it was up to me, then the only tax that I think would be fair would be a 10% consumer tax only on all New products. That is it. Send the rest of the money back to the taxpayers.
yeah- some gain 60%, while consumers are the losers...
There is only one MASSIVE problem with your premise. Gas stations IMMEDIATELY raise their prices as soon as the spot price goes up seemingly every day even though most of the time the gas in their storage tanks was bought at a lower price.
EVERY gas station in the USA does not get a delivery several times a day or every day.
The spot price goes up overnight and the stations unanimously immediately raise their prices 5 to 10 cents at a whack and when the spot price goes down, the stations consistently drag their feet to lower the price a penny. It never matches; the price goes up rapidly and goes down S L O W L Y. They rake in the profits and the consumer gets screwed.
You don’t think the price of oil is at the apex of its bubble?
Honestly, no, I don’t. I believe it will rise until the ability to pay drops. It might get close to $6 a gallon before the economy tanks.
Oh, definitely!
It's different this time. Trust me. This is not your ordinary speculative bubble... it's a different one.
The moon exploration accomplished little in the long run. It was a very impressive event that has led to little innovation in the long run. Long term innovation was unleashed through private enterprise with little government intervention in industries such as micro electronics and software.
If our demand for oil remains the same or rises long term, we are screwed. Unless somebody figures out a way to synthesize it. Because there's only so much in the ground.
Gasoline and diesel can be synthesized from coal. The process has been refined so that it is now cost effective. I doubt that the rats will allow it. The coal industry indicates that much CO2 can be sequestered in the synthesis process. Still, the rats will find some reason to object because they hate carbon-based energy.
There are large amounts of oil waiting for development. We have a reasonable amount in this country. A high price will ensure that new technologies are developed to extract oil from previously difficult areas. The rats want to stop all oil development so the amount of extractable oil does not matter.
lol. And kowtowing to Saudi royalty is a good idea?
The Saudis want to sell us oil as do the other OPEC countries. We are not kowtowing to anyone. Oil sales are voluntary transactions. OPEC is a cartel so they have some control over the supply of oil.
In the long term, we do not want to rely on a cartel for any commodity. The private market has a huge incentive to find alternative sources. Moving to other energy sources is a long term effort. We need oil especially our own sources of oil in the meantime. Government mandates will just lead to boon doggles like ethanol. The marketplace will develop alternative sources when the technologies are viable. Mandating solutions are terrible ideas. We will be worse because of the mandates.
Congress can’t do a thing about it. They can expedite building alternatives plants and nukes but that won’t be cheap. This is about the start of 25 years of pain if Congress is effective and successful, and the start of pain forever if they don’t.
“First, if you believe business pay taxes, then I have beach front property in Iowa to sell you. They pass it on to the consumers.:
Not true.
Ha ha ha.
Some of the posters around here are agribiz types w/ an agenda. Too many populists. Not enough economic education.
You think at $135/barrel oil energy is expensive, wait to you see what “alternatives” cost. LOL
And the main method that got them there was drilling for oil.
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