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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LETS SEE, 18 REFINERIES GO DOWN ON THE WEST COAST AND THE PRICE OF OIL GOES UP FIFTY CENTS. THE RICHMOND REFINERY AND TULSA REFINERY GO DOWN DUE TO FIRE AND PRICE GOES UP TO WHO KNOWS. WHERE IS THE LOGIC.
I agree we need to have a capital gains tax in place for the oil companies. You would think if we have ashortage of refineries, they need to buld more. A few years ago, they cried about not making enough to cover expenses for "exploration" of new oil fields. Now they want to blame it on "damaged refineries"! When are the American peopl going to say, "enough is enough"? Put leaders in office that will DO something about this corporate GREED!
I also agree with telling these futures traders they have to store this oil they are buying. That would stop all this futures crap!
I agree with most of these comments. The government has his hands in all our pockets. I am sorry to say this administration has not worked for the good of the people. All those Senate Hearings they had with Gas Executive's were meaningless.
They may have worked for awhile, but they are right back gauging the people again. There's always an excuse why prices
go up and up. Vegetable and Fruit excuse: Weather conditions. Gasoline - Fire at refinery so on and so on. Yes, America it is
time for a change in our Administration. Start with Congress and go up to the top. Although, we don't have anyone running who will think of the people before himself and the wealthy.
In many of my posts about Wll Street speculation I've said, "We need to raise the capital gains tax on speculation." The only people who profit are the oil companies and a few idiots on Wall Street.
I agree with too 2u,. Buyers need to take possession of what they buy that will end al this speculation on futures crap. I'd like t see a Wall Street guy take and and find a place to store a 100,000 barrels of oil.
The oil refinery causing prices to go I'm not buying it. One refinery isn't going to raise prices that much. Lairs on that reason because Katrina took out more than one.... Now how much did prices rise then?
The skies the limit i suppose as 10% ethanol is now being talked about being dropped in 13 states.
Now we not only have a nation wide drought but we have high gas prices to look foward too.
Science amazes me! I heard that they have created a way to charge batteries on an electric vehicle, without pluging it in. A special plate lays in the floor and the car is parked over it, and the batteries are automaticlly charged. It made me think, why not build these plates into the highway system, and run the motors off it? I mean really, the transfer of electricity with out wire. That would eliminate the need for batteries. Like the ancient "streetcar" , without the electric pole contacting wire. LOL, the electric company would read your cars electric meter by satalite, just like your house meter, and send you a bill once a month. LMBO! Maybe the big oil magnate's realize the end is near, and are squeezing us for every last dime before it's all over. LOL, I gotta quit smokin this ****.
If you notice the prices go up with every article that is written saying it is going to go up for what ever reason. It is propaganda stimulated by the oil/gas companies and Wallstreet. Actually it doesn't matter what product is written about-gas, food, propane- if they hint it is going to rise, it does, even if nothing comes about in the end and it never goes down. And we sheep keep putting up with it. It is time to get rid of the good ole boys in our government and elect people who actually care about the rest of the population. And think about it we keep electing people to presidency and senate, the same people who are already bought by big business. Wake up America!!!!!
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.
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