High gas prices persist despite US oil boom

High gas prices persist despite US oil boom

The U.S. is increasing its oil production faster than ever, and American drivers are guzzling less gas. But you'd never know it from the price at the pump. The national average price of gasoline is $3.69 per gallon and forecast to creep higher, possibly approaching $4 by May. "I just don't get it," says Steve Laffoon, a part-time mental health worker, who recently paid $3.59 per gallon to fill up in St. Louis. U.S. oil output rose 14 percent to 6.5 million barrels per day last year — a record increase. By 2020, the nation is forecast to overtake Saudi Arabia as the world's largest crude oil producer. At the same time, U.S. gasoline demand has fallen to 8.7 million barrels a day, its lowest level since 2001, as people switch to more fuel-efficient cars. So is the high price of gasoline a signal that markets aren't working properly? Not at all, experts say. The laws of supply and demand are working, just not in the way U.S. drivers want them to. U.S. drivers are competing with drivers worldwide for every gallon of gasoline. As the developing economies of Asia and Latin America expand, their energy consumption is rising, which puts pressure on fuel supplies and prices everywhere else.

Only now people are starting to ask this? They blame the oil costs so much that is why gas is high but the reason why it's high is because of the speculators and wall street. And guess who pays the speculators. The Koch brothers and one of the we are to big to fail banks that's who.

How Koch Became An Oil Speculation Powerhouse

– October 6, 1986: First oil derivative is introduced to Wall Street by traders at Koch. Koch Industries executive Lawrence Kitchen devised the “first ever oil-indexed price swap between Koch Industries and Chase Manhattan Bank.” At the time, such derivatives had been limited to currency markets, and the shift of creating a synthetic financial instrument based on the value of crude oil was revolutionary. For an agreed-upon period, an oil swap is a contract where one party makes payments based on a fixed oil price, and the other party makes payments back based on the changing spot price of oil. In July of 2009, EnergyRisk magazine, a publication for commodity traders, posted a piece exploring the very first oil derivatives and Koch’s role in developing them.

Wall Street greed fueling high gas prices

Gas prices approaching $4 a gallon on average are causing severe economic pain for millions of Americans. Pump prices spiked 5% in the past month alone. Crude oil prices stood at $108 on Friday, up from only double digits at the beginning of the month. What's the cause? Forget what you may have read about the laws of supply and demand. Oil and gas prices have almost nothing to do with economic fundamentals. According to the Energy Information Administration, the supply of oil and gasoline is higher today than it was three years ago, when the national average for a gallon of gasoline was just $1.90. Meanwhile, the demand for oil in the U.S. is at its lowest level since April of 1997.

Oil speculation is nothing but a fantasy and it's time we woke up and got rid of them.

Speculation is a scapegoat for currency debasement. The prices on nearly everything have risen.

Gas price today: $3.69
3 years ago: $2.80
32% increase

Gold price today: $1610
3 years ago: $1100
46% increase

Looks like gas prices actually have gone down in real money terms.

Originally posted by sintel
Speculation is a scapegoat for currency debasement. The prices on nearly everything have risen.

Gas price today: $3.69
3 years ago: $2.80
32% increase

Gold price today: $1610
3 years ago: $1100
46% increase

Looks like gas prices actually have gone down in real money terms.

edit on 21-3-2013 by sintel because: (no reason given)

Maybe you missed the part where oil speculation started in 86.

My understanding is that oil prices in the US are now based on North Sea Brent, a heavier crude that OPEC has adopted as it's standard but US crude WTI, is still used here and sells on the open market for less. Not only that but the price is change is related to the futures price, not what the oil company paid, as well as fluctuations in the dollar. No wonder the huge profits these oil companies make.

This has irked me for a long time.

Here are some links.

Brent vs WTI

Brent favored over WTI

Personally I would like to know why our gasoline prices are charged on a crude we don't use and on a price in the future.

Corrections are appreciated...It is all about learning.

I noticed the whole gas thing too and thought it odd.

Next is food.

Originally posted by davjan4
I noticed the whole gas thing too and thought it odd.

Next is food.

Nothing odd about it, just what the consumer is willing to pay.

Obviously we are willing to pay $4 + a gallon. When they creep it up to $10 we will all reminisce about the good ole days of paying only $5.

The reason they can do it its because we need it and the price is ultimately manipulated and fixed by a OIL monopoly.

reply to post by buster2010


I speculate that this is because the energy return on investment (EROI) on shale plays is really quite #ty.

As I often hear peak oil is not about running out of oil entirely, it is about running out of cheap, or easy to access oil. The harder a source of energy is to access the less net energy you get out of it.

Also you can bet that all those BernakeBux we've been printing will catch up to us sooner or later. Then you will wish for today's gas prices (and all prices).

Why would anyone think gas prices will go down under this administration.Department of energy secretary Steven Chu stated in 2008, that he wanted it to go as high as Europe's prices. He even stated it again last year.

Energy Secretary Steven Chu admits the administration has no interest in bringing them down. Is it any wonder Democrats are growing increasingly agitated with this White House? At a hearing this week, Rep. Alan Nunnelee, R-Miss., specifically asked Chu if "the overall goal" of the administration is to "get our price down." Chu's answer was no. In fact, he said that "somehow we have to figure out how to boost the price of gasoline to the levels in Europe," which are in the neighborhood of $8 a gallon.

investors.com

The price here in northern CA is $4.09. Which is about $.20 cheaper than when I filled up Monday. The price made me really happy! Then my conspiracy brain kicked in. They could have lowered the price at any point. But they lowered it dramatically for the weekend. Maybe to make people happy? To maybe not pay attention to something else? Political and economic bombs are often dropped on Fridays.

haliburton
dick cheney
haliburton
koch brothers
no it's haliburton
no it's the koch brothers
yeah it's the koch brothers.

depending on where you live nearly 70cents of the price of a gallon of gas is taxes.
add inflation, and you get what we have today.

almost everything is up 30%-50% over the last decade.

be happy we have the cheapest energy in the world.

not for long though, thanks to the marxist...read this

i've always felt early on that obama has been putting pressure on the world to come up with alternative power sources and is kinda confirming to me if he's not letting up on the death grip as far as fuel prices goes.

as much as it hurts us our immediate future and wallets i think it's what needs to be because haven't we been on the decline a while now?

it's only a matter of time before we're stealing our children's battery powered scooters to get to work!

Originally posted by bjax9er
haliburton
dick cheney
haliburton
koch brothers
no it's haliburton
no it's the koch brothers
yeah it's the koch brothers.

depending on where you live nearly 70cents of the price of a gallon of gas is taxes.
add inflation, and you get what we have today.

almost everything is up 30%-50% over the last decade.

be happy we have the cheapest energy in the world.

not for long though, thanks to the marxist...read this

Start doing some research many of the companies pay zero in taxes. And not only that but they get hundreds of millions back. Also if you look into it a great deal of this oil comes from federal lands and this oil belongs to the people. It's time the government charged these companies that have been making record profit for decades even more.

reply to post by buster2010


No only that but also, tax payer government incentives for it too. They screw the consumer two ways and more many more.

I know there are a lot of factors in this. The cost of extraction, refining, transportation...state and federal taxes. I also know that a huge part of this is the speculators.

There is also a thought in the back of my head that some part of this is because of the "Green"movement. If you want to get people to stop putting so much carbon dioxide and carbon monoxide into the air, make their fuels ridiculously expensive and they will burn less of it. I cannot help but think this is part of the agenda. They are going to make you use less whether you like it or not.

This is all speculation. I mean the cause of high oil prices.

Originally posted by buster2010

Originally posted by bjax9er
haliburton
dick cheney
haliburton
koch brothers
no it's haliburton
no it's the koch brothers
yeah it's the koch brothers.

depending on where you live nearly 70cents of the price of a gallon of gas is taxes.
add inflation, and you get what we have today.

almost everything is up 30%-50% over the last decade.

be happy we have the cheapest energy in the world.

not for long though, thanks to the marxist...read this

Start doing some research many of the companies pay zero in taxes. And not only that but they get hundreds of millions back. Also if you look into it a great deal of this oil comes from federal lands and this oil belongs to the people. It's time the government charged these companies that have been making record profit for decades even more.

the 70 cents/gallon in taxes, is what you pay at the pump.

oil companies spend billions to get the oil out of the ground, refined, and to the pump.
BILLIONS!!
employing a large percentage of the workforce, with some of the best paying jobs in America.

oil companies "lease" that federal land. they don't get to use it for free.

you want to "charge" these companies?
go ahead, you are just going to raise the price at the pump.
what, you think they are just going to pay out of pocket, and not pass it on to the consumer?

stop repeating the ignorant marxist claptrap you heard on msnbc yesterday.
this is not soviet russia, though i'am sure you wish it was...

reply to post by bjax9er


Sadly that is just an excuse for prices, the poor, poor oil barons are wealthy beyond believe while reaping the profits of oil consumption by the consumer they gouge.

Yes it cost money to get that oil and refine it, but guess what if they were losing money they would not be reaping insane profits for decades and getting richer. They are not losing a penny.

So no, the fallacy that they are spending so much on getting that oil doesn't match their increasing profits.

Beside they get no only tax incentives and deductions but they do not give it back to the consumer either, they keep it as profits.

Supply and demand dynamics have been compromised. It used to be that when demand fell, prices fell. Now instead when demand falls they just kill the supply thus keeping the price high. This is going on with just about everything we buy. Not sure what the answer is.

reply to post by bjax9er


There is nothing Marxist about it.
It is Theft on the American People.

Where is all the cheap oil from the Iraq War?

We produce a lot of oil so where is the cheap gas for us?
Look at other countries that produce their own fuel and they pay pennies per gallon.

Iran and Venezuela come to mind as two.

www.eia.gov...

EIA cannot determine exactly the amount of crude oil produced in the United States (U.S.) that is consumed, as refined products, in the U.S. However, the majority of the crude oil produced in the U.S. is refined in U.S. refineries. The U.S. also produces other liquids that are used in the refining process that are added or blended with the refined products. In December 2012, the U.S. produced about 7.03 million barrels of crude oil per day and imported about 7.58 million barrels per day.

EIA is not able to track how much domestically produced crude oil and other liquids are exported in the form of refined products. The small quantity of crude oil produced in the U.S. that is exported, nearly all to Canada, may actually be returned to the U.S. as refined products.

The U.S. became a (slight) net exporter (exported more than we imported) of refined petroleum products in 2008.[\b] Refined petroleum products produced in the U.S. from both domestic and imported crude oil are exported to other countries. The volume of net exports of refined products in December 2012 was equivalent to about 8.5% of the total volume of U.S. petroleum consumption in December 2012.

Originally posted by jacobe001
reply to post by bjax9er

 

There is nothing Marxist about it.
It is Theft on the American People.

Where is all the cheap oil from the Iraq War?

We produce a lot of oil so where is the cheap gas for us?
Look at other countries that produce their own fuel and they pay pennies per gallon.

Iran and Venezuela come to mind as two.

www.eia.gov...

you say it's theft on America people, but in the same breath you want to thieve it from the iraqis?

obama screwed that up, he let the red chinese get the iraq oil.
same with the keystone.

oil companies don't exist to produce cheap affordable products for you.
they don't exist to pay taxes.
they exist to make MONEY!

otherwise you would have the government producing the oil at triple the price.