Say Goodbye to $2 Gas

THE ORANGE COUNTY REGISTER ^ | April 26, 2006 | ANDREW GALVIN

[kellynla]

Get used to it.

Gasoline at $2 a gallon has probably gone the way of 5-cent coffee and 15-cent cheeseburgers.

The grim facts are these: Demand for oil is rising around the globe, especially in Asia. Supplies are generally static. Unless something happens to put a damper on demand, simple economics dictate that prices have nowhere to go but up.

In the short term, however, we may get a break. Gasoline prices, now averaging more than $3 a gallon in Orange County, are expected to fall below that level around Memorial Day as refineries ramp up production after completing maintenance work, analysts say.

Here's a look at what's driving this week's higher prices at the pump:

[patton]

Meanwhile, there are tankers floating around full of oil, with no place to unload it. All the storage depots are full.

Can you say bubble?

[stuartcr]

Not all of man's necessities, were created on the same day.

[P-40]

whether the price will go back down under $2. It might. But it might not.

Hopefully not, or if it does, it is only for a short time. Unless prices stay high, we stay dependent on various third world dictators and head cutters for our fuel needs. Not to mention that the American consumer needs an incentive to get a clue. Drive a honking big vehicle in the city, you will spend a lot on gas. Have underinflated tires, you will spend a lot on gas. Tailgator? Ditto. Leadfoot? Ditto. Failure to plan your routes? Ditto. Failure to consolidate trips? Ditto.

It is hard to have any sympathy for many of those that complain about "high" gas prices. Think a bit and the cost will go down.

[P-40]

Futures contracts allow bulk consumers to lock in a future price today for a commodity needed at a single point or over a period of time in the future.

Southwest Airlines used this to their advantage when they worked out a wonderful futures contract that got them cheaper fuel than their competitors.