California crisis means $4 gas for a while
Refinery problems and speculative bets keep pressure on pumps nationwide.
Gas prices in California rose as much as 20 cents per gallon between Thursday night and Friday morning, and the state's fuel shortage is just one reason U.S. gas prices will flirt with $4 for a while.
The average price of a gallon of regular gasoline in California is nearly $4.49, according to the AAA Daily Fuel Gauge Report. That's the highest in the country and far exceeds the roughly $3.89-a-gallon national average reported by the Energy Information Administration -- still a record for this time of year.
If you own an Exxon-Mobil (XOM) station near San Francisco, your prices are likely closer to $4.60. Even high-volume Costco (COST) gas stations can't offer any relief, as the Los Angeles Times reported that the big-box retailer had to shut down some of its pumps.
"We do not know when we will be resupplied," read a sign at one Southern California Costco, according to the Times.
In some areas of the car-happy state, prices have jumped 40 cents in a week as refinery problems have created shortages and helped send wholesale prices soaring. Among the recent disruptions, an Aug. 6 fire at a Chevron (CVX) refinery in Richmond has one of the region's largest refineries producing at reduced capacity. A power failure in Southern California has affected an Exxon Mobil refinery, and a Chevron pipeline that moves crude to Northern California also was shut down.
While all of the above is putting pressure on California pumps, other forces far beyond the state's borders are fueling price increases and a sticky nationwide slide from $4 a gallon. There hasn't been a refinery built in the U.S. since 1976, which means each time one goes offline for a bit or shuts down, the gap between crude oil and gasoline supplies widens. Commodities brokers know this all too well and are starting to place huge bets on commodities futures as peak winter heating demand nears.
As noted by Fortune, a recently released United Nations report explicitly states that the "financialization" of commodities markets -- "hundreds of billions of dollars of bets placed on expectations of temporarily rising prices" for energy, food and other goods -- is the "root cause" of elevated prices. That's right, a bunch of folks sitting at home barking orders to traders as if it were a scene from "Trading Places" helped boost gasoline prices, which in turn pushed this summer's global oil prices 65% higher than the averages reached during the commodity price boom of 2003 to 2008.
"Investors treat commodities as an asset class, which means that they are betting on a certain price trend during the period they are invested in commodity assets," the UN said. "They do not trade systematically on the basis of fundamental supply and demand relationships in single markets, even if shocks in those markets may influence their behavior temporarily."
In a fuel market in which drivers already think prices are headed toward $5 a gallon, commodities brokers and investors aren't just potentially funneling populist anger away from fuel companies and toward Wall Street. They're building that anger a pipeline.
Guys, I do not know how we are going to survive but with tension brewing on the horizon, it could only get worse. I do not know for you guys but since I have gotten a fuel saving device from I have gotten some form of relief as it pertains to my fuel expense. I have recently noticed some people had gotten a 25 and 30 miles additional miles on their fuel.
The driving conditions on the island can be compared to as city like condition. Check it out for your self.
Thats ok My new chevy volt has 107 miles on .04 gallon of gas, folks the volt only goes 25-50 miles on a charge in 2013 then it switches to gas at 40 mpg. the range is about 350 miles on a tank. I have been driving the car for a week now on .04 gallon of gas. i am so impressed with the car, it cost about$ 2,75 dollars and cents to charge it so far. The volt is absolutly the wave of the future. They are in the process of aquiring 100 miles between charges, It makes me feel good to drive right by the gas stations every day. my comute is 12 miles each way. I cannot say enough about the goudging going on at the pumps. We now have a choice, I advise everyone to check out the new electric cars, the power is tremondous. I will not be buying gas anytime soon. All of my gas rigs are now parked. What a great feeling it is.
I live in Eastern North Carolina. The price of gas here has dropped about 10 cents in a week. I think I paid $3.62 yesterday at Sam's Club which runs about 2 to 5 cents cheaper than the other places. California voters wanted to be able to have their own referendums on the ballot with few restrictions. They got it and they have done as much if not more than the legislature to ruin their economy. They keep voting for the government to give them more and won't let the legislature raise taxes on property or make other changes that are needed. You reap what you sow.
It is essential that oil speculation be reined in both at the state and federal levels if California and many
other states are to remain viable. Also CARB has really gotten out of hand. I realize that clean air is
essential, however, living is essential too. In too many cases, the cure often turns out to be more
devestating than the deasease. CARB, SCAQMD, and other similar beauacracies have all too well
illustrated this fact. They are all going way overboard and have become way too overzealous with
too many burdensome clean air regulations. While some of us have the ability to pull up stakes and
move to another state, too many of us don't. We're stuck here with these very unreasonable and
very very unfair bearuacracies. We're being unneccessarily sacraficed for the "greater good of this
state". It is essential that the state lighten up on little people like us, if it is to flourish, or even to
Speedway price just jumped thiry cents a gallon in Detroit today.
Was headed towards $3.50 a gallon, then a new excuse came up.
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