Get ready for $4 gasoline
Get ready for $4 gasoline
With prices at record high, demand and refining problems could push them much higher. Any relief in sight?
By Steve Hargreaves, CNNMoney.com staff writer
May 7 2007: 2:29 PM EDT
NEW YORK (CNNMoney.com) -- With gas prices near record highs, experts say $4-a-gallon gasoline is just around the corner.
"I think it's going to happen," said Phil Flynn, a senior market analyst at Alaron Trading in Chicago. "Unless things change dramatically, I think we're going to see $4 a gallon."
Already, prices in California average $3.48 a gallon, according to the motorist organization AAA. And one service station in San Francisco was charging $3.95, according to GasBuddy.com, a handy site that lists the cheapest and most expensive gas stations by city and state across the country.
Refinery problems and strong demand are the two main reasons cited for the runup. Prices hit a record high of $3.07 a gallon, according to the Lundberg survey released Sunday.
Refinery output in the U.S. has been below normal for several months now, after fires and other accidents combined with longer than normal maintenance shutdowns, hurting production.
Peter Beutel, an oil analyst at consulting firm Cameron Hanover, noted in a recent report that refineries have not operated above 95 percent capacity since Hurricanes Rita and Katrina in 2005. Before 2005, the refineries, clustered around the Gulf coast and badly damaged in the storms, routinely operated at over 95 percent capacity.
Flynn said gasoline stocks have fallen for the past twelve weeks straight and are now at their lowest level for this time of year since 1956.
This all comes just as the nation gears up for the summer driving season, spurred by vacationing families and students out of school.
Meanwhile, demand has shown no sign of easing. That's despite a nationwide average price of $3.07 a gallon for unleaded regular, a record, according to Trilby Lundberg, publisher of the Lundberg Survey of thousands of stations nationwide.
During the winter months gasoline demand grew at about 2.5 percent, according to the Energy Information Agency. Average demand growth is about 1.5 percent.
"More and more communities are going to see gasoline that approaches or exceeds $4 a gallon," John Kilduff, an energy analyst at Man Financial in New York, said recently. "Where we're currently at with prices, that's a given."
But not everyone is so convinced.
Wholesale gasoline prices have fallen 20 cents over the last week and prices for gasoline futures on the New York Mercantile Exchange have lost about the same amount over two weeks, according to Tom Kloza, chief oil analyst at the Oil Price Information Service, which gathers statistics for AAA.
Kloza said gasoline prices as measured by AAA have not yet hit a record, clocking in at $3.04 a gallon Monday, two cents shy of the 2005 record.
"I'm not sure we're going to get there," said Kloza. "I wouldn't be surprised to see our numbers stay the same, or maybe even tick lower."
When inflation is factored in, Lundberg's record of $3.07 still trails the all-time high in March 1981. At the time, gasoline cost $1.35 a gallon - and in today's dollars, that's $3.13 a gallon, said Lundberg.
Also, Americans earn a lot more now than they did in the early 1980s, so by some measures what people spend now on gas is only half of what is used to be.
In 1980, the average American had to work 105 minutes to buy enough gas to drive the average car 100 miles, David Wyss, chief economist at Standard & Poor's, said in a study last year. By 2006, the average American needed to work only 52 minutes, thanks in part to better fuel efficiency but mostly due to higher wages.
It's also worth noting that while $4 gasoline would be a record for American motorists, in Europe it's common due to high taxes. The average price for a gallon of gas in the Netherlands is over $7, and it's over $6 in many European countries.
it wouldn't surprise me
and don't be lecturing me on this " in europe it;s 6 bucks a gallon" yah i get it. in europe they actually make it easier to get around without a car unlike here. here we have too much sprawl, we are lazier, fatter and our public transportation system is a joke compared to many european countries
there are only a few big US cities that "get it" when it comes to being able to get around easily without a car. SF, chicago and NYC come to mind. build up not outward. control sprawl! make public transportation more attractive and available to everyone. lower demand = lower cost
One main difference is the decentralization of the US town and the rise and prevalence of suburbia. In the suburbs, you are so far from the city center that anything but car is simply impractical. In Europe, tightly centered homes surrounding the town center are far more common. This setup allows people to get around town on foot or bicycle and allows for an effective train system that just has to have one stop per town.
The US is totally setup on huge towns and freeways, so cars really aren't going anywhere. Practically every town would need some sort of metro train system in addition to the mass rail connecting all the towns. That is not feasible. The US is a lot larger than the average European country, the taxes (especially transit) are far lower, and the towns are arranged in a way that makes driving most practical. I hate the setup, but it is how it is. :(
I guess our future lies in the electric car, not the electric railway. However you cut it, gasoline powered cars have to go. The cost is becoming prohibitive and they are absolutely decimating air quality in our biggest cities. Once an alternative to traditional batteries is discovered, I hope to see electric cars take over, but Detroit will likely try to run the technology into the ground.
A gas-electric hybrid car will be my next vehicle purchase.
Watch the oil company profits rise to new highs. They should send us ALL a thank you note. Better yet, lower the damn prices.
Has anyone gotten the following Email?
On May 15th 2007, all internet users are to not go to a gas station in protest of high gas prices. Gas is now over $3.00 a gallon in most places.
There are 73,000,000+ American members currently on the internet network, and the average car takes about 30 to 50 dollars to fill up.
If all users did not go to the pump on the 15th, it would take $2,292,000,000.00 (that's almost 3 BILLION) out of the oil companies pockets for just one day, so please do not go to the gas station on May 15th and lets try to put a dent in the Middle Eastern oil industry for at least one day.
If you agree (which I cant see why you wouldn't) resend this to all your contact list. With it saying, ''Don't pump gas on May 15th" this morning my cheap gas station was at $3.11 regular--regular what?????????????
I have received this email several times so it seems to be getting some legs. As I explained to Albert, it isn't because it will make the oil companies lose money, that will never truely happen, it is to demonstrate that if we were to decide to act in unison we could make a BIG difference to their revenue and that they may want to give price gouging a second thought. Wishful thinking :shrug
It's still in the low-to-mid 2's here in the Carolinas.
I work for an oil company, so I'm happy in one sense for high prices because my company does well, but I'm sad in the other sense that they are so greedy and it hurts Americans financially.
back to the thread...
one station in san francisco is charging 4.33 per gallon! right below it was a gas station in my home town ( not portland, the town i grew up in) where it was 4.03. i know exactly where that station is!!! i was SHOCKED
i'm "only" paying 3.39 right now.. .but i bet that skyrockets. i'm going down to southern oregon this weekend where i hear it's 3.75...
RIDICULOUS! i am so pissed off! why the hell can these jerkface oil ***** keep making record profits???? inflation is going to skyrocket as prices keep rising. since EVERYTHING we do in life is somehow tied to oil be it gas or electricty.... damn we are in for a HUGE wakeup call and probably another stock market crash..... i hate to be a doom and gloom but based on how our lives are SO dependant on this nonrenewable resource, how can i think positivley about the situation???
i'm biking as often as i can. damn i'd rather burn some extra chunks then pay up the wazzo for gas. i freaking hate this.
if GM wanted to get on the profit side, they'd bring back the EV 1. if they brought back the EV 1, i will go on record as saying i would buy one. i HATE american cars with a PASSION, but i'm saying it for EVERYONE to hear, i would buy an EV 1. instead i have a feeling they'll come out with a new line of pick ups and SUV's.......
the entire world would have to stop using oil for a day for the middle east to even notice and even then it probably won't make much of difference as long as demand is high
A one-day "gas out" means nothing. If you want to make a difference, cut your fuel usage by 1/4 PERMANENTLY. If everyone would do that, demand would deline so much that the supply would be able to handle it, and the price would plummet.
Easy ways to do this:
Only go shopping at markets close to you, and only shop once a week, buying everything that you need.
Move closer to where you work. More than half of all driving is work commute. If you cut the distance you drive to work in half, then you cut your fuel usage by 1/4 automatically. I live 5 miles from my office, intentionally.
Move to Buenos Aires, and walk to work. LOL
HEB went down 4 cents by my house. That's a plus. The work thing helps. When we were in Austin, it was a 18 mile drive to get Albert to work. Now we are about 4 miles away.
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