Gas Prices

[jumper69]

Saw regular at $1.93 the other day.

Was laughing my ass off at the Excursion driver filling up.

I think they should tax SUV's like they do luxury cars. Slap another $6000 on the price for buying a gas guzzler.

HAHAHAHAHA!!!

[Emperor Napoleon]

$1.83/gal for regular in Tampa today but oddly enough it tends to be about .7-.10 cents more/gal in Tampa than over in Pinellas.

[LAKE]

Aren't you the lucky ones! Wednesday it jumped from $1.89 to 1.94, then today another 5 cents up to 1.99. Glad it's bike-riding weather. [img]graemlins/storm.gif[/img]

[Boo Boo]

I just can't wait to see what the price will be at the dock on the lake. [img]frown.gif[/img]

I may be worth it to buy 5 gallon containers and fill them up on the way down.

[jumper69]

I scooped the NY Times.....

I won't say it...sure I will: I told you so!

The Oil Crunch
By PAUL KRUGMAN

Published: May 7, 2004
E-mail: [email protected]

Before the start of the Iraq war his media empire did so much to promote, Rupert Murdoch explained the payoff: "The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil." Crude oil prices in New York rose to almost $40 a barrel yesterday, a 13-year high.

Those who expected big economic benefits from the war were, of course, utterly wrong about how things would go in Iraq. But the disastrous occupation is only part of the reason that oil is getting more expensive; the other, which will last even if we somehow find a way out of the quagmire, is the intensifying competition for a limited world oil supply.

Thanks to the mess in Iraq ? including a continuing campaign of sabotage against oil pipelines ? oil exports have yet to recover to their prewar level, let alone supply the millions of extra barrels each day the optimists imagined. And the fallout from the war has spooked the markets, which now fear terrorist attacks on oil installations in Saudi Arabia, and are starting to worry about radicalization throughout the Middle East. (It has been interesting to watch people who lauded George Bush's leadership in the war on terror come to the belated realization that Mr. Bush has given Osama bin Laden exactly what he wanted.)

Even if things had gone well, however, Iraq couldn't have given us cheap oil for more than a couple of years at most, because the United States and other advanced countries are now competing for oil with the surging economies of Asia.

Oil is a resource in finite supply; no major oil fields have been found since 1976, and experts suspect that there are no more to find. Some analysts argue that world production is already at or near its peak, although most say that technological progress, which allows the further exploitation of known sources like the Canadian tar sands, will allow output to rise for another decade or two. But the date of the physical peak in production isn't the really crucial question.

The question, instead, is when the trend in oil prices will turn decisively upward. That upward turn is inevitable as a growing world economy confronts a resource in limited supply. But when will it happen? Maybe it already has.

I know, of course, that such predictions have been made before, during the energy crisis of the 1970's. But the end of that crisis has been widely misunderstood: prices went down not because the world found new sources of oil, but because it found ways to make do with less.

During the 1980's, oil consumption dropped around the world as the delayed effects of the energy crisis led to the use of more fuel-efficient cars, better insulation in homes and so on. Although economic growth led to a gradual recovery, as late as 1993 world oil consumption was only slightly higher than it had been in 1979. In the United States, oil consumption didn't regain its 1979 level until 1997.

Since then, however, world demand has grown rapidly: the daily world consumption of oil is 12 million barrels higher than it was a decade ago, roughly equal to the combined production of Saudi Arabia and Iran. It turns out that America's love affair with gas guzzlers, shortsighted as it is, is not the main culprit: the big increases in demand have come from booming developing countries. China, in particular, still consumes only 8 percent of the world's oil ? but it accounted for 37 percent of the growth in world oil consumption over the last four years.

The collision between rapidly growing world demand and a limited world supply is the reason why the oil market is so vulnerable to jitters. Maybe we'll get through this bad patch, and oil will fall back toward $30 a barrel. But if that happens, it will be only a temporary respite.

In a way it's ironic. Lately we've been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition ? the scramble for oil and other resources ? poses a much bigger threat to our prosperity.

So what should we be doing? Here's a hint: We can neither drill nor conquer our way out of the problem. Whatever we do, oil prices are going up. What we have to do is adapt.

[reason]

To put this all in perspective, the price of gas - adjusted for inflation - is lower now than it was during the early eighties. When you take inflation into account, gas prices have actually held rather steady over the years, and is still a bargain in the United States.

That little blurb prompted a "That's a load of crap" from my Dad last week. Told him if he doesn't like it, then bitch to the Wall Street Journal.

[LanDroid]

Here's an interesting graph that supports that point. It's not official, it was done by an individual tracking his own gas purchases against the consumer price index.

An important element that is missing from the discussion is OPEC. Oil prices are not set by a truly free market, they are affected by a cartel that has weakened but still has significant influence. Prices are still higher than true free market pricing. I suspect that if OPEC did not exist and the oil producing countries competed freely, oil prices would be somewhere around half of what they are now. I could be way off on that, but my main point is since oil prices are controlled to some extent, it is more difficult to take them as a signal on supply and demand imbalances, i.e. on Peak Oil, etc.

[cincygreg]

Oil prices should not fluxuate as greatly as they do. The price per barrell goes up almost on a whim anymore.

Expect the prices to stay high all summer.

[Raven Soul]

Filled up for 1.73 yesterday... that wasn't bad.

[jumper69]

It's a given that US gasoline prices are amonst the lowest is not THE lowest in the world. I also understand that the cost of gasoline adjusted for inflation is still at a reasonable price.

I also saw the final cost of the lady filling up her Excursion and it was $70 and some change. Inflation adjustment or not, that's still a shitload of money to pay for fuel all the while getting 11 miles a gallon.

My OPINION is you can show me all the graphs and charts you care to that shows our gas is still cheap. Gas is still $1.80 (avg) and not going down any time soon, the Saudi announcement of higher production notwithstanding.

I'm rambling but I guess what I'm trying to say is whatever the cost, it doesn't matter if the demand for oil (gas) keeps going up and the supply stays steady or declines. We're fucked!

And I'll be laughing my ass off all the way!!!!