Why gasoline prices will keep rising
The futures market points to more increases, and refinery accidents have hampered US production.
That's because gasoline futures -- a crystal ball for gas prices -- have spiked 19% in the past two months, The Wall Street Journal reports. That has helped trigger the price increase at the pump, though so far gas prices have risen only 7.2% in the same period.
Because pump prices follow futures action by several weeks, "drivers have yet to feel the full extent of the recent rally," John Biers and Dan Strumpf write.
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There are two more reasons to suspect gas prices will continue rising. Crude oil futures are up 27% from late June, and accidents at several U.S. refineries have dented production. Chevron's (CVX) refinery in Northern California, for example, is at 60% capacity after an Aug. 6 fire, Bloomberg reports.
Gas is averaging $3.72 a gallon in the U.S., according to AAA's Daily Fuel Gauge Report. That's up from $3.70 a week ago and $3.47 a month ago. The Energy Information Administration pegs this week's figure slightly higher at $3.74 a gallon.
The administration says gasoline inventories are at their lowest level for this time of year since 2008, Bloomberg reports.
"I don't expect any relief in gasoline prices until after Labor Day," independent fuel consultant David Hackett told Bloomberg.
The uptick in fuel prices may be a factor as families plan their end-of-summer vacations. Plane ticket prices are going up, led by Southwest Airlines' (LUV) fare increase on short one-way trips. Delta (DAL) and other rivals appear to be following Southwest's lead. If successful -- and it looks like it will be -- the increase will be the fifth time this year airlines have been able to raise prices.
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Some will say increase domestic production but the truth is that would only be a temporary solution
If you believe in free market economics ultimately alternative solutions will be become economically feasible. Until that point in time the American economy will continue to be hobbled by its oil consumption.
We are part of the world's economy and until we recognize that we'll flounder, placing blame instead of forging solutions.
One reason in CA why gas is so high is that our environmentalist won’t allow new cleaner more efficient refineries to be built. Also, it would help if we had a national standard of gas so if a state like CA is low then we could buy it from another state but since we cant we are forced to pay the extra cost. Besides politicians don’t care about high prices, their gas tanks are paid for by OUR tax dollars.
Alot of Idiots posting on here. Gas prices have nothing to do with the president and its not in his ability to do anything about it. Its these scum bag oil speculators that drive up the price of oil based on things that may or may not happen thus the term "futures". So these freaks see something thats going on in the world or think something might happen they hit the panic button and drive our gas prices up for no reason. These piece of $_it speculators are Americas true enemy! Anyone that is in this business should be on a list just like sexual offenders so that the American people can know where they live. Public hangings should follow.
Of course it is because of futures in the stock market. This is what our government has become. Instead of playing the wheel in Vegas it is the entire country! Voters need to wake up, although the pickings for prez. this go round are slim to none, we have to make a change. Congress and the Senate sit back and play these games with us, the working people that have to pay the price, while we also pay for everything for them so it's no skin off thier noses if our families have to choose between food or gas to go to work!
And the media feeds it like a cancer, beefing it up every step of the way! Way to go MSN.
Hmm, Lets see; several refineries closedl earlier this year plus "we" are selling distillates to foreign countries. Maybe we are seeing speculation driving the price. Where are the President and the fed enforcers?
1st. You could start with, stop making Corn -Gas-ethanol. There is no reason to federally fund farmers to grow corn for gas. They currently drain tile every pot hole or water source. They have tilled up natural prairie and virgin land and the Govt pays for both failure and expotential profits. STOP that federal funding of our money to millionaire farmers.
2nd. Get the President to allow the new Keystone pipe line. "Supply & Demand" ( he will probably do it in early Nov. for votes, not for the right reasons)
3rd., Stop over regulation of the oil and gas industry. " Too much Govt"
4th, Put less emphasis on costly electric vehicles and put that effort into natural gas fed vehicles.
5th Put the brakes on the speculators who drive up costs and skim profits.
6th Eiminate 50% of the EPA
There is a pipe line it's called Burlington Northern. In case you haven't noticed there are mile long trains after train with brand new tank cars transporting this stuff. This pipe line is still being constructed in Oklahoma and will eventually will happen just not without have some safety standards in place.
There needs to be SOMEBODY to unite the American people into building an affordable electric car that gets 400 miles to the charge and costs no more than $18k.
Middle class families cant afford to pay 45k and up for an electric vehicle that only gets less than 100 miles on a charge.
If we unite and pool our resources, we could have another "AMERICAN MOTORS" ALL ELECTRIC vehicles and SCREW the rest of the world!!!!
Some of us are forgetting supply and demand. India and China are entering the 20th, if not 21st Century(!) and are catching up to the West in energy demands. As a result, energy prices are expected to rise because of fuel scarcity. You can only blame speculation so much for so long. I think it was author Dambisa Moyo("Winner Take All") on Book TV who pointed out that there is a newly discovered petroleum deposit in South America that could provide billions of barrels for decades. The bad news is that it''s under about 2 miles of salt. Not a cost effective source. That's what we're slowly coming to, difficulties in extraction. How long can we stay under $4 with this mounting demand and dwindling supply? We're starting to see some of the effects of post-peak oil with fees for whatnot in air travel and with manufactuing coming back, albeit "insourced." More to come(refer to "20 Dollars a Gallon" by Christopher Stine for possible scenarios in $2 increments, but no specific timetable except one proven wrong early in the book).
Price fixing is a crime
taking bribes from big oil is also a crime
So why is Congress full of people?
funny how allot of the posts point fingers at oil companies and spectulators, when will people realize its the mid-east countries milking the world?
drill in US and fk the middle east, let see how well they cope when 40% of the demand goes away
end the dependency
Government along with big oil and speculators will keep oil high and going higher. I hope it does go to five bucks a gallon then maybe we can get a change in government that will do something for a change
like the keystone pipeline.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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