Gas Prices

[freeztar]

It seems to be on everyone's mind (and wallet) these days, so I thought it would make for a good discussion here.

What is causing the higher prices? When and how will we see relief? What are the social implications of higher fuel costs? What are you doing to soften the financial blow? etc...

[Moontanman]

Originally Posted by freeztar

It seems to be on everyone's mind (and wallet) these days, so I thought it would make for a good discussion here.

What is causing the higher prices? When and how will we see relief? What are the social implications of higher fuel costs? What are you doing to soften the financial blow? etc...

There lots of reasons for high gas prices, speculators, lack of refineries, high demand, less than optimum oil production, all these things contribute to a synergy that pushes prices higher than they could be. One thing about the prices in other countries, most of the countries that have extremely high prices are small countries. You could take a tank of gas and drive almost anywhere in Germany but a tank of gas wouldn't take completely across my state of NC. this might not be fair but it's true. Add to that the fact that small countries do not have as much room for refineries as big countries and you get very high prices. It's sad we (the US) doesn't have enough refinery capacity to prevent the need to import refined gasoline. This is driving prices up as much or more than any other reason. But it is our own fault, no one want a stinky gasoline refinery near them "NIMBY" so they are not being built to meet demand.

[freeztar]

Yes, the NIMBY factor is a big one, but there are plenty of places that are not anyone's "backyard". I found an interesting article that discusses the issues with US refineries. I found it well worth the read.

U.S. refiners stretch to meet demand - Oil & energy - MSNBC.com

There hasn’t been a new refinery built in the U.S. since 1976, the result of extremely tight environmental restrictions, not-in-my-back-yard community opposition, and the high cost of new construction. Used refineries currently sell for about 30 to 50 percent of the cost of building a new one, so it’s cheaper to buy an old refinery and upgrade it. Or squeeze a little more gasoline out of the refineries you already own.

Expansion of refining capacity is also made more difficult because oil refineries are a lot more complicated to build and operate than your average widget factory. For starters the raw material — crude oil — has many different properties, from thickness to sulfur content, so not all refineries can blend just any barrel of crude.

[Thunderbird]

It has to do with supply and demand. The demand in newly industrialized countries has sky rocketed while production has stayed about the same. The oil companies are making huge profits but this only to off set the future and current cost of exploration of new oil reserves.

The problem of high fuel cost is not going away. What we need to decide in the US is to elect a president that thinks that drilling new wells and continuing and expanding a war in the middle east is the solution {McCain } or push for alternative sources of energy { Obama } This is going to be the issue that Americans need to decide on in the next election.

[Turtle]

Falling US dollar, no increase in oil production by OPEC, and increased demand for petroleum products. That's what I hear anyway.

Originally Posted by Freezatroleum

What are you doing to soften the financial blow?

Fewer trips to Lechtenberg. .........

[Moontanman]

What am I doing to off set the price of gas? I don't go anywhere for fun anymore, the store, the doctor, my wife to job interviews, no driving for fun at all. All my fun is here, kinda sad aint it!

[freeztar]

There's also the X-factor, namely China.

U.S. agencies, think tanks and market researchers rely on Chinese government statistics and GDP-related estimates to gauge oil demand. This year, China's freak winter storms, the May 12 earthquake and the Summer Olympics have further clouded forecasts.

China's strong diesel demand spiked after the quake as the government fired up backup power generators. Beijing plans to substitute diesel for coal in power plants near the capital some 45 days before the Olympics to reduce pollution, says a Lehman Bros. report.

And, China has stockpiled oil products for transportation needs during the Olympics, analysts say.

Some argue the Olympics impact on demand has been overhyped.

China's Oil Needs Keep Rising For Trucks, Industry, Stockpiles - Yahoo! News

[Thunderbird]

Originally Posted by freeztar

What is causing the higher prices? When and how will we see relief? What are the social implications of higher fuel costs? What are you doing to soften the financial blow? etc...

both of my jobs,bank,store, gas station, insurance company,Church, recreational facilities are all within a 2-5 blocks of my house. I'm fortunate.

[freeztar]

Originally Posted by Moontanman

What am I doing to off set the price of gas? I don't go anywhere for fun anymore, the store, the doctor, my wife to job interviews, no driving for fun at all. All my fun is here, kinda sad aint it!

Pretty much the same thing here. I also combine trips as much as possible. For example, if I need to go to the grocery store, I go on my way home from work.

[Zythryn]

Supply is not keeping up with demand. That is the basic reason. While demand in the US took a small dip, increases in worldwide demand make that a very minor point.
While Mexico's production is in decline, it is also consuming more each year. Estimates are that Mexico will no longer be exporting any oil around 2012 as their demand reaches the level of their production.
What I am doing to alleviate the pump prices? Nothing I haven't already done. Bought a Prius (2 actually if you count my wife's car) last year. This cut my gasoline bill in half. So until gasoline goes north of $5 - $6 I am spending less than I did prior to my Prius purchase.
I do limit my driving and combine errands when I can. However, that is not due to pump prices. That is just because I wish to use less oil.