Can anyone explain to me why gas is still rising?

[BunnyHardaway]

Re: Can anyone explain to me why gas is still rising?

Sigh, I remember being 11 and hearing people complain when gas went up to $1.75 a gallon. Why can't it be like that now

[ZB9]

Re: Can anyone explain to me why gas is still rising?

there are a lot of factors, but personally (as someone who has worked in the oil/gas business for a while)...if i had to pinpoint the BIGGEST reason for the high crude oil price, i would say the crap value of the US dollar is the biggest reason and the biggest domino.

[ZB9]

Re: Can anyone explain to me why gas is still rising?

Why can't it be like that now

lol it's still not worth as much as water (with people paying 2 dollars for a bottle of water) and water is the most abundant resource on the planet (and water is renewable)....not to mention $5 dollar coffees or "lattees"

[BunnyHardaway]

Re: Can anyone explain to me why gas is still rising?

lol it's still not worth as much as water (with people paying 2 dollars for a bottle of water) and water is the most abundant resource on the planet (and water is renewable)....not to mention $5 dollar coffees or "lattees"

True, but it still sucks, especially for an unemployed teenager. Hell, I'd be ecstatic if it went down to $2.75 again.

[TheGamingChef]

Re: Can anyone explain to me why gas is still rising?

As someone who is very familiar with the situation maybe I can help provide some answers here. SPTO pretty much got it right with his post.

The biggest reason is really easy to pinpoint: Speculation. This is the largest cause of rising oil prices. Traders across the globe are buying more and more into oil on the commodities market, and as the law of supply & demand goes, with more demand comes higher prices.

These speculators continue to buy for a variety of reasons. The emergence of many nations such as China & India into the class of countries that can support a large middle class (meaning, a lot of people with cars) has caused oil usage to rise at a higher rate than had been earlier projected. Oil use is rising, but some prominent oil pumping areas have already reached "peak oil" - the point at which production will start to fall & continue to do so until the well is dry. Hubbert properly predicted the US' production peak in 1970, and his prediction was that world oil production would peak at some time between 2006 and 2016.

The speculators are the ones that make prices spike when events happen that delay production - i.e., the Nigerian rebels attacking a pipeline this week. That event only has a negligible effect on our supply (unless it becomes prolonged, which rarely if ever happens) but the speculators buy in further and further because they expect the price to rise, and because they buy in further, the price does indeed rise (when in reality, they're the ones that made it do so.) It's a vicious cycle for all of us.

Contrary to popular belief, higher gas prices have very little to do with American oil companies. I know the profit numbers may seem gaudy, but consider this: At this point, we're buying oil from Saudi Arabia at a price that's about $2.80/gallon. Then we have to pay to ship it to the U.S. Then we have to pay to refine it. Then we have to pay to ship it all across the world. Any profit that is added on top of the cost is minimal. It all has to do with the ridiculous volume of gasoline that is sold, that contributes to the high profits.

Oil prices will only continue to steadily rise and rise for the next five years or so - I'd say that in 2012 we should probably expect to see about $6.00/gallon in the US, if not higher. It's very hard to project because we simply don't know the rate at which Indian and Chinese consumption will rise.

At the point when peak oil is reached worldwide, we can expect a balloon increase in oil prices - perhaps over $10.00/gallon (and this is estimated to occur in the next eight years) and those prices should rise exponentially until the oil industry can no longer sustain itself.

It's a bitter story but unfortunately, I worry it might come true. That's why it's so important to focus on alternate energy sources. We need to invest in ways to convert vehicles to run on hydrogen and ethanol, as well as convert our gas stations to sell hydrogen and ethanol. We really don't have a choice in the matter at this point.

[superjames1992]

Re: Can anyone explain to me why gas is still rising?

I'm sure it has something to do with the environmentalist's 17 different kinds of fuel that are used during the summer time in different state's to meet environmental regulation. I mean, do we need 17 different types of gasoline??? Add to that that the dollar is worth less and that we haven't built a new oil refinery here in the United States is ... 33 YEARS, then you sort of have a problem, especially when supply has been dramatically increasing the entire time.

Of course there are other reasons, too. However, Bush isn't sitting in the oval office playfully manipulating gas prices. It is so funny to what lengths Bush-haters will go to say he does this sort of stuff.

Oil is up to $117 a barrel now, so I'd expect that with supply increasing and the 17 different kinds of gasoline kicking in this summer (as they do every summer), we could see prices increase to over $4.00 a gallon this summer (It's around $3.50 here in High Point, NC right now).

Oh, and ethanol is NOT the solution. We would have to virtually use the entire breadbasket of our country for JUST corn farms to grow enough corn to make the ethanol we need. In fact, I was something the other day talking about how people are starving in other countries since ethanol has pushed food prices higher, so the people are too poor to pay the higher prices. Ethanol is a POLTICAL solution, not a PRACTICAL solution. I personally think hydrogen fuel cell cars are the future, but we shall see.

[BaseballCtchr]

Re: Can anyone explain to me why gas is still rising?

I was told we would be out of oil by 2022. But I agree and have been trying to tell people it is too late to infest in cars that get better MPG and that we need to look at alternative fuel sorces.

Try telling people around here ethanol is not the way to go and you will be met with a brick wall.

P.S. the world will reach its carrying capacity around 2050!

[davin]

Re: Can anyone explain to me why gas is still rising?

I was told we would be out of oil by 2022. But I agree and have been trying to tell people it is too late to infest in cars that get better MPG and that we need to look at alternative fuel sorces.

Try telling people around here ethanol is not the way to go and you will be met with a brick wall.

P.S. the world will reach its carrying capacity around 2050!

Ethanol really isn't the way to go, its just one of those things that sounds good on paper to people, but really isn't all it is cracked up to be. I am a big supporter of alternative energy. The carrying capacity is not something that is set in stone. If we had another agricultural revolution, we could support many more people. Although I do think overpopulation is going to be a problem in the near future, maybe by then we can start living on the moon .

[CMH]

Re: Can anyone explain to me why gas is still rising?

This is one of those moments when the real world needs a little deus ex machina to help with this problem.

Maybe aliens will come at the right time and save us with a renewable energy source that is both plentiful and cheap to produce.

[ZB9]

Re: Can anyone explain to me why gas is still rising?

This is one of those moments when the real world needs a little deus ex machina to help with this problem.

Maybe aliens will come at the right time and save us with a renewable energy source that is both plentiful and cheap to produce.

Ha good one

[fishepa]

Re: Can anyone explain to me why gas is still rising?

So I guess 5 years ago when gas was a little over 1.00/gallon there was a third less demand?

[TheGamingChef]

Re: Can anyone explain to me why gas is still rising?

I'm sure it has something to do with the environmentalist's 17 different kinds of fuel that are used during the summer time in different state's to meet environmental regulation. I mean, do we need 17 different types of gasoline??? Add to that that the dollar is worth less and that we haven't built a new oil refinery here in the United States is ... 33 YEARS, then you sort of have a problem, especially when supply has been dramatically increasing the entire time.

The seasonal blends contribute very little to the overall price. They're just additives - they really have no effect on the product. The lack of refineries is a contributing factor, but considering the adverse environmental impact that they would have, I'm not sure that's the way to go.

Oh, and ethanol is NOT the solution. We would have to virtually use the entire breadbasket of our country for JUST corn farms to grow enough corn to make the ethanol we need. In fact, I was something the other day talking about how people are starving in other countries since ethanol has pushed food prices higher, so the people are too poor to pay the higher prices. Ethanol is a POLTICAL solution, not a PRACTICAL solution. I personally think hydrogen fuel cell cars are the future, but we shall see.

Corn ethanol is not a long-term solution, but other types such as sugar cane or switchgrass may well be. A lot of the farmers around here are very happy that we're focusing on corn ethanol so much though...

[Registered_Again]

Re: Can anyone explain to me why gas is still rising?

The seasonal blends contribute very little to the overall price. They're just additives - they really have no effect on the product. The lack of refineries is a contributing factor, but considering the adverse environmental impact that they would have, I'm not sure that's the way to go.
Corn ethanol is not a long-term solution, but other types such as sugar cane or switchgrass may well be. A lot of the farmers around here are very happy that we're focusing on corn ethanol so much though...

What adverse environmental impact? I hear this same BS line all the time, but no one can explain. Please try.

[SPTO]

Re: Can anyone explain to me why gas is still rising?

Here's some good news (yeah right)

OPEC announced that they'll be increasing output by 2010. That'll probably only drop prices by a couple pennies IMO.

[fistofrage]

Re: Can anyone explain to me why gas is still rising?

So I guess 5 years ago when gas was a little over 1.00/gallon there was a third less demand?

Or a 3 times more supply. This is a possibility. China and Indiana have exploded over the last 5 years and I can't say how many refineries there are. The refineries and pipelines are where the bottlenecks occur.

I do know that there are 12 Billion barrels of oil already pumped just sitting in Iraq waiting for who knows what before that will be released. That amount of oil hitting the market at once would drive oil prices back down to the 1.00+ range.

On a side note, it takes 500 lbs of corn & other organic material to make 1 tank of fuel. Ethanol is not the answer. Two years of drought and we would have famine conditions in the USA if we switched over. We are currently in the longest period of non-drought conditions in the US heartland on record, going on 16 years. We are pressing our luck as it is. Trading food for fuel is a dangerous proposition.

I could go on and on, but I won't. We need to drill for oil off the coast of California create a pipeline from Brazil and use our oil reserves all the while come up with a 20 year or so plan to develop non organic alternative energy.

If I say anymore it will get political.