Gas prices inching up fast

[Rodger Tellefson]

: Gas costs more, but don't expect a repeat of 2008 angry:



By JOHN PORRETTO, AP Energy Writer John Porretto, Ap Energy Writer Thu May 21, 3:40 pm ET

HOUSTON As tens of millions tank up and hit the road for Memorial Day weekend, gas prices are rising fast enough to revive painful memories of the $4-a-gallon summer of 2008.



Rest easy: The economic slack created by the recession all but guarantees prices won't spike the way they did last year, analysts say.



On Thursday, a gallon of unleaded averaged $2.36. That's much cheaper than the $3.80 it cost this time last year, but prices are still up about 30 cents a gallon this month, enough to make drivers flinch.



"Uh-oh," cab driver Jay Biyani said while filling up this week in Manhattan. "That's the first thing I say when I pull into this gas station each day. Right now it's not that bad, but it's a lot worse than two weeks ago."



Even so, the auto club AAA estimates 32.4 million people, or about one in 10 Americans, will travel over the holiday, most of them driving. That's a slight 1.5 percent increase from 2008.



Vacations make a lot more sense for many families than they did last year. Airfares, hotels and tourist attractions are all cheaper this year because of the relentless recession.



Gas is no exception. For much of this year, there has been a glut of gasoline in storage around the country, keeping prices low. And demand has been light because of the poor economy.



But gasoline has jumped in May. Oil refineries, trying to make money just like any other business, are taking in less oil because of the glut in gas, and those cutbacks are showing up at the pump.

 

[Andy Cabrera]

But gasoline has jumped in May. Oil refineries, trying to make money just like any other business, are taking in less oil because of the glut in gas, and those cutbacks are showing up at the pump.

That's funny, this is why the oil companies consistantly post "Record Profit"

 

[Richard Toms]

Yeah, its kind of weird with the prices of gas rising. I mean the wild part is around here, diesel hasn't increased at all.

 

[TrainTrac]

It's not weird at all, just the usual cycle.



1. Summer driving season is beginning = increased demand.

2. Summer blend costs more to refine than winter blend. Those costs are passed on at the pump.

That's funny, this is why the oil companies consistantly post "Record Profit"

The constant reports about "record profit" are nothing more than demagoguery and propaganda. If you know anything about economics and business, it's the profit margin that matters. And oil & gas industry profit margins are significantly lower than other industries.



This chart may be a few years old, but it's still fairly accurate. Oil & gas PM's are still ranging between 8-10%

 

[Jerry Abson 2]

But can you trust a chart from a Oil based company? Check the bottom, "Source: Business Week and Oil Daily". That would be considered biased around these parts. Or at least the appearance, and thats not good. I understand about profit and margin and all that other stuff. I don't like it, but I pay it because I like to drive. So let them continuously post profit records, once it gets too bad for me, I will do something else. But until then, I am not going to complain. Call me wierd!

 

[Andy Chase]

Yep, just in time for my road trip!! They always find a reason to raise the prices for holidays, even though they aren't supposed to do it. It kinda seems they raise the prices a few days before a big holiday, then lower it 2-3 cents to "show" that they don't raise it up just for the holidays.

 

[TrainTrac]

They always find a reason to raise the prices for holidays, even though they aren't supposed to do it.

"Aren't supposed to do it"? Says who? It's called supply and demand in the free market. More cars on the road for holidays = more demand. Last I heard, only the banks and two car companies have been nationalized. I believe the oil industry is still operating in a free market.



JerryA,



The profit margin info in the chart that I posted can be found from many different, non-oil industry related sources. Those stats are valid. Companies like Coca-Cola and Wal-Mart post record profits year after year, why aren't they demonized like the oil companies?



C'mon, this cycle happens every year, and still the media whips the masses up into a frenzy by over-hyping it like it's never happened before, and everyone complains like it's a completely new phenomenon.:wacko:

 

[Jerry Abson 2]

Im with you Trac regarding how the media works. And I am not demonizing them, in fact, I own stock in a supplier of equipment for oil companies. So I may be unhappy about having to pay so much for driving my truck, but I say the same thing everytime I see the doc, or get a prescription or even go see a movie. I may not like it, but I live with it, and dont scream too loud whenever I fill up. Just a little 'ugh'.



And I wasn't meaning to knock the chart too much, just an off topic complaint regarding some stuff at my end. My own little private vent where I can't get in trouble if the wrong people read this.

 

[TrainTrac]

No worries, JerryA. And in the interest of full disclosure: I own Exxon-Mobil stock. Go big oil!!!:banana:

 

[Andy Chase]

It's probably not really the Gas companies as much as the gas stations. The government was considering it Price Gouging on Holidays. At least in MN it made the news a few times, especially the night of 9/11 when they thought gas was going to sky rocket and stations raised prices by about a dollar or so.

 

[EddieS'04]

TT, I have Exxon-Mobil stock in my 401k, also..

 

[swshawaii]

Spot On TT ! I believe your first statement re: supply/demand speaks volumes.

And like politics, a lot we will NEVER know. (IMO)

 

[Tom Schindler]

Personally, I have a very hard time accepting the idea that we are using less fuel than we did one year ago. I have an even harder time accepting that last year, 2008, that Supply and Demand was the reason prices were so high.



I just can not accept it. There was something else going on. Someone or some people somewhere were manuplation the fuel prices to either break this country, profit while the getting is good or something else.



Something smells fishey. Gas prices started to rise, albiet slowly, right around 2001. Slowly, but surely, continued to rise up and up until it spiked in 2008. Then it came to a screaching halt in 2008 and then stabilized.



I juat can not buy "supply and demand" as the only reason.



I am not blaming anyone in particular, it is just something doesn't seem right.





Tom

 

[Les]

No new refineries have been built in years, and those currently operating are at a significantly reduced capacity. This is not about "supply & demand", this is about profit...

 

[Tom Schindler]

No new refineries have been built in years, and those currently operating are at a significantly reduced capacity.

Being that I was once in the petro-chemical industry (I worked in oil refineries and chemical plants), I agree with with no new refineries were built, BUT I disagree with the reduced capacity statement.



I have seen refineries running full bore all the time. If there is any "reduced capacity", I would like to know where they are. The plants I were in were running 100+%.





Tom

 

[Thomas Rogers]

Another big reason for the increase:



Crude is way up since the beginning of the year, mostly in part to speculators getting back in and driving up the price.



I still think with such an important resource we shouldn't let speculators create an artificial scarcity and such high an increased price.



We complain about and even have laws against ticket scalping. Oil speculators are nothing more than scalpers, IMHO.



TJR

 

[Kevin Lang]

It's called supply and demand in the free market.

But we do not have a free market; I don't even recall the last time in history the US actually had a free market.



I concur with TJR--once again, the rather asinine "commodities market" is killing us. I didn't see the point of the commodities market as a kid, and many years later I still don't. You don't actually "own" that barrel of oil, they won't ship it to your door, so without actual ownership, what does it do besides drive up prices? Essentially nothing.



(Allowing you to trade it like stock after it "appreciates" in value just drives up prices so I count it as essentially nothing.)



What idiot came up with the commodities market again?

 

[Tom Schindler]

What idiot came up with the commodities market again?

Some one that seen it as a business venture to make money without regard to anyone else.





Tom