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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In 2008, oil was $140/bbl and gas was $4.30/gal. Now oil is $93/bbl and gas is $3.60. Seems to me gas shoud be about $2.86 right now. Perhaps the EPA should permit the building of some additional refineries which would be cleaner, more efficient and more economical than the old ones. Then we could realize the savings from the reduced oil prices. Obviously, the people hurt the most by the current policy are the middle class - the same people who are always hurt the most when the government has too much power.
Normally West Texas crude sells at a premium to Brent but Brent is currently selling at a premium because we don't have enough refining capacity to take advantage of increased oil production.
I am so sick of these high prices. Especially when you see record profits by the oil companies. They could keep the price down if they really wanted to but they got us right where they want us. Everyone needs gas. And the government saying inventories are low is not a surprise. Obama has made it clear more than once he likes these prices. It helps promote his alternative energy plan. Alternative energy is good however most of America cannot afford it. Only the rich. He is out of touch in what the average person (lower and middle class) can afford. But the department of energy which the president oversees, controls how much oil is bought from overseas. Plus Obama has intentially prevented us from being more oil independant to again serve his own agenda. So we must rely on overseas oil. It's a disaster waiting to happen and I don't think we have seen the worst of it. If he is re-elected God help us. Plus gas prices control everything in this country. It is the cause of everything going up from food to heating. You name it, gas and oil are behind it. Transportation costs are rising and so is everything else. I know myself I have had to cut back on spending and cut out causal spending because of the gas prices going up. Watch out....our recovery from the recession won't last long at this rate. We will be doing an about face soon.
Here's the real reason...
Corrupt media and corrupt traders = manipulation both up and down.
Nothing to do with supply and demand
its all about greed
the price of gas up every time they think there might be hurricane,a war .a refinery fire etc . the price sky rockets over night.
then lo and be hold no hurricane no war and fire was some guy sets a waste basket on fire.
but the price of gas does not go down. if these thugs can raise gas that fast,the they can lower it just as fast.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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