Posted on 02/23/2013 8:22:15 AM PST by Kaslin
Given a two-day plunge in crude futures, gasoline prices may have hit a temporary peak.
Nonetheless, consumers feel the pinch as pump prices have risen 34 straight days. For only the fifth time in history Gas prices topped $4 a gallon in District of Columbia.
Nationwide, the price of a gallon of regular gasoline climbed to $3.78 a gallon, up 47 cents in the past month, the AAA said.
In parts of California, Gasoline Prices Topped $5.00 on February 5. CNN Money has an interactive Gas Price map to check prices in your state.
Republicans Cry Foul
Yahoo!News reports Politicians Cry Foul Over High Gas Prices, Urge Action on Keystone XL
Rep. Fred Upton, R-Mich., posted a "Keystone Clock " on his House Energy Committee's website Wednesday. The chairman states more than 1,615 days have passed since TransCanada's Keystone XL pipeline proposal sought approval. Joining Upton's call to build the pipeline is Speaker of the House John Boehner, R-Ohio. Executives at TransCanada have tried a different tactic to try to get approval from the Obama administration by claiming the pipeline won't affect global warming.
The tug of war between economics and environmentalism is escalating thanks to 34 straight days of rising gasoline prices.
Boehner posted a "Running on Empty " graphic Tuesday. The Speaker of the House complains gas prices have "soared $0.43 since Jan. 17" before remarking with his own Keystone clock, "How long will Americans have to wait?"
Boehner cites several sources, including nine Democratic senators, who want Obama to approve the project quickly. The pipeline may not see a decision until mid-June. Around 20,000 jobs and nearly a million barrels of oil a day are at stake for American oil companies.Speculators to Blame?
The Salt Lake Tribune reports Spike in gasoline prices points to speculators
"Like locusts ravaging fertile crops, gasoline prices are soaring again and eating away at the purchasing power of ordinary Americans. And again, financial speculators appear to be a big part of the story."
Refinery Closures
In Recovery Killer? Gas Prices Barrel Toward $4 a Gallon CNN notes refinery closures.
Five dollar a gallon gas "is a real possibility" said John Kilduff, partner at Again Capital in New York. "This is partly being driven by the lost refinery capacity of about one million barrels per day...that's a lot."
Kilduff cited Hess's (HES) closure of a key refinery hub in Port Reading, New Jersey in January as a major factor that has sent gas on a tear. "Prices haven't looked back since," he said.
"It's one of about eight refineries that have announced closure. Now the East Coast is heavily reliant on [gas] imports when it used to be self-sufficient," Kilduff stated. Speculation Nonsense
Refinery closures are one part of the puzzle. If speculators have driven up the price of oil (and that is debatable) it's not the speculators who are to blame, but rather the Fed.
By providing massive liquidity and negative real interest rates, the Fed encouraged speculation in the stock market, in junk bonds, and in commodities.
I believe there is a bubble in all of those areas. The Fed's intent was not to foster bubbles per se, but rather to stimulate housing and spur job creation. On the job creation front, the fed failed miserably, and bloated its balance sheet to over $3 trillion dollars in doing so.
Fed policies have destroyed those on fixed income for the benefit of the banks and wealthy, as I wrote on Wednesday in Reader Asks Me to Prove "Inflation Benefits the Wealthy" (At the Expense of Everyone Else).
The Bernanke Fed is so out of line that the House Subcommittee on Economic Growth Demands Answers From Bernanke on Fed's Exit Strategy; Fed Must Reply by March 5
Yet the media blames those evil speculators. Get real.
The real problem is inflation and printing money.
Senator Gillibrand’s own words, from the 10/22/2009 Wall Street Journal, show that the real purpose of Barack Obama’s climate change legislation is to give Wall Street speculators yet another tulip bulb scheme to replace the mess (mortgage backed securities) for which we are still paying with a $750 billion stimulus package, various bailouts at the taxpayers’ expense, and ten percent unemployment.
http://online.wsj.com/article/SB20001424052748704500604574481812686144826.html
In other words, Senator Gillibrand says openly what we have said for quite some time: the real purpose of cap and trade is not to protect the environment, but to line the pockets of fat-cat SPECULATORS who cannot produce goods or services that are of genuine value to society. Oil and gas provide us an actual service of value.
I was reading Popular Science last night and it seems the Feds have approved thousands of acres of public land for private company use to place solar arrays on.
Now, just looking at massive solar arrays, they sure don’t look like they would be benign to me when it comes to affecting the environment. Certainly they would affect it at least as much if not more than the number of wells that would be on the same size plot of land.
I think all factors are in play here. Speculators can drive up prices when the supply margin is tight. And the supply margin is tight due to refinery closures and maintenance.
Yes, Oil is traded in dollars. As the dollar weakens the price of gas goes up. As the dollar strenghtens the price of gas goes down. That and the fact that we do not have enough refineries to refine the oil into gas are the problems.
I hate thermometers
They are to blame for bad weather, aren’t they?
Everything is speculation. Speculators gonna speculate, as they should.
I think the problem is Goldman Sachs.
Not to mention paying roughly $0.55 per gallon to provide fed & states with a slush fund. Crumbling roads and bridges take a backseat to choo-choo trains, lefty environweenie bureaucrats and non-transportation budget items.
If you grounded Air Force 1 then there would then be enough fuel for everyone.
No one will ever find an easy answer to a complex problem. Still, they insist.
Price of crude oil goes up, gasoline goes up. Price of crude oil declines, gasoline stays up.
Until they are absolutely DROWNING in gasoline. Until then, export enough so that the domestic supplies remain tight.
When this question was asked the previous two or three times over the past couple of years, I was firmly in the camp blaming the speculators, and I’m quite sure that that was correct then.
But this time I’m with others here that blame Fed counterfeiting driving crude-oil and stock market inflation. As before, supply and demand in no way explain these prices.
Remember that this is exactly what Obama said he wanted (correction: we are now about half-way to the gas prices he wants....)
FYI, Depending where you travel, premium is now $4.39 at cheapo stations (with long lines so you can’t get in) to $4.89 (no lines), and rising.
The problem , to me, seems to be that it is traded on the market. anything that is on the market has the added pressure of keeping the shareholders happy and not the people buying your product. If it was actually only a supply and demand thing i don’t think we’d see this daily changes.
Pigs get fat.
Hogs get slaughtered.
Enter financial speculation. Commercial end-users of oil such as airlines and trucking companies who once dominated 70 percent of the market for market for future deliveries of oil now represent just 30 percent. Non-commercial financial speculators now dominate 70 percent of the market. The trading is dominated by Wall Street banks, hedge funds and other financial institutions that have no intention to take delivery of the oil needed to make gasoline.
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