Gas Prices!! How high do you think?

[Carry-a-Kimber]

Here is a LINK with the breakdown of the cost of a gallon of gasoline. Take out the refiner's cost and profit and distributor's cost and profit and you save a whole 49 cents a gallon. The bulk of the cost of gasoline is the cost of crude, which is determined on the open market.

[G26ster]

Blah, blah & blah.

The bottom line, sans the horsefeathers, is that the American consumer is paying more than ever before for auto fuels and heating oils, etc.

As sumyungai suggests, "...turn down the heat and walk to work or the unemployment office, etc. if the price of fuel is to high...". Now then, if you don't have bills, rent, a job, a family, etc., that's a fair suggestion. It works really well if someone or something else is supporting you, eh?

That's true, but I don't blame the oil companies for the price of oil. Who do you blame?

[sumyungai]

Blah, blah & blah.

The bottom line, sans the horsefeathers, is that the American consumer is paying more than ever before for auto fuels and heating oils, etc.

Gasoline is up less than ammo in the past 5 years. That's who is really plotting against you. The greedy ammo companies.

As sumyungai suggests, "...turn down the heat and walk to work or the unemployment office, etc. if the price of fuel is to high...". Now then, if you don't have bills, rent, a job, a family, etc., that's a fair suggestion. It works really well if someone or something else is supporting you, eh?

I have a job and I don't get a government check, which is a lot more than some people can say.

P.S. You can turn up the heat if you're using natural gas because prices are half what they were a few years ago.

[philip964]

I'm old, when I was young, the dollar part of the gas pump read out went real slow. The gallon part of the read out went real fast.

Its odd to look at it now. The dollar part just wizzes, while the gallon part just creeps away.

You used to go to the gas station and you would tell the attendant "just a couple of dollars of regular" One of my cars has a 24 gallon tank, its a hundred dollars to fill it.

But I remember complaining at the price of gas when it was going up in the early '80's. Then we had the crash in Texas. Oil went to what eight dollars a barrel. Gas was cheap again, but I didn't have a job anymore.

Since then, I smile when I have to pay a lot at the pump. It means I'll get a paycheck next month.

China and India didn't used to have cars for ordinary Joe's, now they do. They didn't drill baby drill, four years ago. So prices are going to go higher.

If it gets messy in the middle east, who knows how high it will go. Is there manipulation, sure, but not enough to make a real big difference. The price is higher because people are reluctant to sell it for less. The simple fact that they think they can get more for it in two weeks is enough to raise the price. If things calm down, it will go down. But with Iran rattling swords everyday and the threat of Israel bombing their nuke facilities hanging over everyones head. The prices are going to go up.

No war this summer 3.99 in Houston for regular. War 8.50 in Houston for regular, and you will have to wait in lines again.

[Oldgringo]

Here is a LINK with the breakdown of the cost of a gallon of gasoline. Take out the refiner's cost and profit and distributor's cost and profit and you save a whole 49 cents a gallon. The bulk of the cost of gasoline is the cost of crude, which is determined on the open market.

Who sells the crude to the refiners?

[FishInTx]

Peace time 4.50 war time 6.00 this summer. peddle faster.

[talltex]

A POTUS with a set would demand that American Oil Companies set a US supply/demand price, and then sell the leftovers...or pay a HEFTY export tax on every drop that leaves our shores.

Be careful what you wish for. A good friend of mine, who is very successful in real estate investing, was putting forth this same type of argument yesterday..."the government needs to step in and set some price controls on these %#*&! oil companies. They're ripping us off and making obscene profits"! I asked him if he went out and bought a property for $100,000 and 6 months later had the chance to sell it for $300,000, would it be OK for the government to step in and tell him he couldn't sell it for more than $120,000, because 20% profit was fair and more than that would be price gouging? He responded "Of course not! It's none of their business...it's worth whatever somebody's willing to pay...what I paid for it isn't relevant." I just looked at him and he kind of shook his head and said "yeah, OK I get it...I can't have it both ways, but I just hate paying so much for gas". I told him nobody does, but letting government control pricing for one industry opens the door for every other industry too...and that's a road no free society needs to start down.

[Carry-a-Kimber]

Here is a LINK with the breakdown of the cost of a gallon of gasoline. Take out the refiner's cost and profit and distributor's cost and profit and you save a whole 49 cents a gallon. The bulk of the cost of gasoline is the cost of crude, which is determined on the open market.

Who sells the crude to the refiners?

Lots of folks, depends on who owns the well. ExxonMobil, Anadarko, Chevron, Saudi Arabia, Venezuela, etc etc. While oil my cost $85/bbl to "harvest" in the Gulf of Mexico or $5/bbl in the Persian Gulf; commodities markets set the price of a barrel of crude. You also have to figure that there is less than 20 gallons of gasoline in a barrel of crude.

[rwg3]

Some interesting information on this issue. One, currently the supply of crude is at an all time high. Second, about 25% of US refining capacity is shut down, due to aging facilities that haven't been updated. In spite of that it is cheaper to crack the crude in the US than almost anywgere else in the world. This is due to rapid development of the natural gas industry, which has driven teh price of Natural gas to all time lows. This supplies such inexpensive fuel for the refineries to operate on that the Us has become a significant exporter or gasoline. It is a world market and as other developing countries demand increases, we are bidding against other nations for gasoline produced here. Many of these countries purchase gasoline through their government or using government subsidies, making the price war difficult.
The Keystone pipeline 1, cuurently in use pumps Canadian crude to a spot in Oklahoma where it is stored in a huge number of tanks waiting to go to the refineries that are operating. There is more supply right now than the refineries can produce. the Keystone pipeline in the news would be a second line that aims to run all the way to the gulf. It would bring additional crude to a place wher it would still have to be stored for some time.
If we want to impact gas, not crude, prices we need to change the refining structure.

[TxRVer]

I hope prices go high enough to get Obama voted out, just before they go back down to $1.50 in mid November.

[C-dub]

I hope prices go high enough to get Obama voted out, just before they go back down to $1.50 in mid November.

That's funny. Never gonna see $1.50 again unless they start selling it by the liter.

[Kythas]

One thing nobody's touched on is the dollar.

Crude oil is traded in the international market in US dollars. As the US dollar weakens, the buying power of that dollar weakens, and things purchased with that dollar cost more. If you'll notice, the price of crude oil overall tends to increase or decrease with the relative strength of the dollar.

As the dollar has been weakening the past few years, things purchased with dollars cost more. While the market forces that determine crude oil prices depend on many things, we must not forget that the easy money policies of the Fed under this Administration also have a bearing on them. All else being equal, oil prices with a strong dollar would be less than oil prices with a weak dollar.

[philip964]

Last time I went to Europe was in 2002. The Euro was $0.85 now it is $1.34, that's an increase of 57%. If we hadn't been sending all our money overseas and borrowing from everybody on earth, our gas prices would be (assuming a current price today of $3.50) $2.22 a gallon.

With the Euro at $0.85, vacationing in Europe seemed to me to cost about 20% more than a similar trip in the US. Lodging seemed to be about $200 a night (for a much smaller room), meals were expensive and gasoline was out of sight. I drove a tiny little car with a tiny gas tank. Gas was sold by the liter but it seemed to take $80 to fill it up back then.

This would explain why I have not been back.

BTW an airline ticket to Italy was $350 rt, now it is about $1000.

Gradually we are becoming a third world country, get used to it.

[old farmer]

I hope prices go high enough to get Obama voted out, just before they go back down to $1.50 in mid November.

That's funny. Never gonna see $1.50 again unless they start selling it by the liter.

I saw .13 cent with my dad in 50's. Gas wars. The result was one suppier alive and price at 3 times.
Is history repeating?

[RoyGBiv]

Here's a thought.....

WE THE PEOPLE (WTP) "own" much of the land that drillers want to drill on. ANWR, Gulf Coast, etc. Our government owns it, but, WE "own" the government, no? It would be easy to argue that WTP can raise the royalty rates as high as the market will allow, and we can send out royalty checks to each person, in much the same way that Alaska does today. That will offset the higher prices at the pumps and give us an effective discount to the higher prices that non-producing countries will pay. The key will be making sure our government doesn't spend the royalty money... Oops... too late for that..

The question would be.... Is it cheaper to extract and refine oil from the Bakken (privately held land) or the Gulf or ANWR? If the Gulf is cheaper (total cost) then we can raise the royalty rate for drilling in public lands until the total cost matches the cost of drilling elsewhere.... The "extra" royalties become ours to spend (yeah, like that would ever happen).