Home Forums Hunting & Shooting Hunter's Campfire Gas Prices

Quick PS. I've not watched oil prices. IE oil for the engine. Has it also risen 250% plus?? I was paying +/- 5 bucks a quart for synthetic. That would be 20 bucks a gallon last time I changed oil. Can I now expect that oil will be 70 bucks a gallon?? Or did I miss the link between cost of oil per barrel vs gas production and oil for the engine??

JEff

So Bill and I are paying for all the idiots out there? I drive to work and back. I go on weekend trips. I refuse to run back to town to grab something. I drive only as much as I have to and there is no way to cut that down.

Now I'm curious. Are we actually driving that much more and the demand is whats to blame?

I'm in an oil producing area. One that in the 80s you could see 15 rigs from one spot at any given time. With oil in the 30 buck range. Now that its almost 70, I can see one rig. And thats the first one in many years.

I"m still not totally clear on this other than that someone, somewhere in the middle is literally raping the rest of us.

Ya know I can take it slow a lot easier than I can take it fast if you know what I mean.

Jeff

Nobody is raping anyone. If oil companies were "raking it all in", that would be reflective in their stock prices. Oil companies are publicly owned and traded. You can buy stock in Standard Oil, Alantic Richfield, Exxon Mobil, Kerr MeGee, and dozens of others and "get rich" along with "them". that isn't happening. We import a lot of oil. The price of that oil has jumped dramaticly. We have seen that at the pump. We will continue to see it. Exxon Mobil preferred stock hasen't jumped 200% in 2 years. Stop blaming the oil companies and Bush. That is stupid. This is nothing more than supply, and demand, along with what the market will bear. billt.

Okay then I"m still right, the countries we import from are raping us.....just that I should not have typed middleman. I do wonder locally. Lately fuel prices have been skyrocketing. Almost all diesel is 250-265 a gallon. Yet one local source is still at 240 a gallon. He has consistently stayed 10-15 cents lower than any of the other competition. Just tells me he is still making it, and the other local retailers are hosing the rest.....

Of course on another sour note, no one protects me from union pricing when I can't even work where there is any union if I chose to...

I don't believe I mentioned Bush anywere in there though.(if you didn't know it, I'm really actually on your side)

Jeff

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Rost,

Energy prices have surely been skyrocketing but it is only supply and demand fueled by speculators. Energy is a commodity, nothing more and nothing less. Consider a few things:

1. In the early 70's soybeans went to about 13$ a bushel, or + triple in price. Reason - demand. It fell back to <3$/bushel. Supply got high. BUT, you dont have to have soybeans on your dinner plate.
2. In the 70's gold went to about 800$/oz. Reason - demand. Inflation was rampant and folks were hedging with gold. It subsequently fell to the high 200$/oz range, now +400$/oz. You dont have to have 24 carat gold. If you do 10 carat will do fine.
3. in the 80's silver went to about 30$/0z. Reasons -demand and speculation. You dont have to have silver.

Speculation IS demand. You have to have energy.

Pure and simple, Energy is a commodity and there is only so much that is presently available out there, there are only so many refineries in the U.S. to process it. China wants it, we want it, India wants it, etc., we all want to keep growing be strong nations and feed our machines.

Just think for a minute, if you will; What would the price of energy be today were Japan and the European Union growing at a GDP rate like that of the U.S.A.? Japan is the worlds 2nd largest economy and the EU was to be the very biggest of all. Some folks crunched those numbers for us and it came out at close to 120$/barrel. Rememeber when that hit the headlines a few months back? With the recent summer spikes it would ring out at close to 140$/barrel. Far fetched? Goldman Sachs did the crunching and the calculations ain't at all complicated.

Japan has an election coming up so watch it and if Koi is re-elected we're gonna see them grow as he's a proxy for growth and reform. If France's N. Sarkowsky beats Chirac, were gonna see them grow as he is more pro-west and for competition. If Angela Merkel thumps Schroeder in Germany, more growth is projected there. China continues at a minimum of 9% growth rate, India is approaching a vertical growth curve and eastern Europe is getting their legs beneath them. Throw in a few supply disruptions, bad hurricane seasons, normal refinery shutdowns and turnarounds - or fires -, some terrorist activities aimed at distribution links and what do you have? Volatility comes to mind.

From all of that we might just want to possibly consider and accept that we're living or could be living in the good ole days right now as it regards energy cost. As far as the Conspiracy part of it; There definitely IS a Conspiracy. That Conspiracy is a global one in that everyone out there is trying to conspire, cut deals and position themselves for long term supplies and to secure those long term supplys. Envision a bidding process, if you will and it's called Capitalism.

Having said the above gradoo, I'd only add that a fella might should turn off the sitcoms, turn on the lights and start trying to educate himself about what's happening out there instead of blaming this and that but that's an individual's call. Any way you cut it, after you're through blaming and whining, you're gonna have to dig deep and refactor your budgets for a while, it looks like.

Or, as they say on Saturday Night Live - "Hey, I could be wrong". For me, it's time to call in the dogs and piss on the fire for this one. Ya'll have at it. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" /> <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />

Old Toot

Old Toot

It went up again today here from $255.9 to $269.9. What a hardship our local gas merchants have had since yesterday! Thanks...Bill.

You are spot on, Terry.

I recall when there was a predicted coffee shortage about eight years or so ago ( poor crop ) the coffee industry immediately raised prices even though their supplies were not yet affected. The government stepped in to stop it. Of course, the coffee lobby is miniscule and doesn't help politicians get re-elected.

Still no answer on my auto oil price question?? Everything made from a barrel of oil should be skyrocketing?? Of course it may well be, haven't bought oil or auto tranny fluid in a while. But I suspect when I go buy the next quart of Mobile 1, it will be over 5 bucks but not over 15 bucks a quart.....

Got all the supply and demand parts. Just don't understand why the rest of it isn't affected. You'd think that if the price of the barrel was actually to blame the PVC pipe I see every day in inspections along with lots of other things would be skyrocketing also.

Jeff

Every time I fill up I can only think to myself that I am being robbed.
At least Jessy James would have used a gun!!!

DT

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PVC's (poly vinyl chloride) basic feedstock is Natural Gas cracked to ethylene, not oil. Very few Petro-Chemical plants use any oil as a feedstock. Most all is natural gas or waste gas with Chlorine as the motherlode and caustic as a by-product.

Natural gas prices have been high but relatively stable for a while and it is most often sold on long term contracts not daily spot prices. Most of the gas sales contracts are indexed to the prices of 4 different grades of crude oil on a BOE (barrel of energy equivalent) basis but contracts only allow a certain, limited %/year increase or decrease based on those indexes. It's not a simple business.

Gotta know what your feedstock is before you can rationalize any part of the cost equation.

Old Toot

Barak,

"There are all sorts of other energy sources available that could be developed..."

Make that "are being developed".

The Bush bashing on this thread has me scratching my head - do you guys just make this crap up? Bush has done more for alternative fuel development than the last three presidents combined. His energy bill DOUBLES in the next seven-years the cumulative ethanol progress of the last 30-years.

The ethanol topic deserves its own thread. Ethanol is the near-perfect decentralized, self-reliant, and dare I say "Barak proof" thing going right now. If a thread starts up I'll jump in on Friday - after I get back from an ethanol conference...

Let's put it this way - Big Oil HATES ethanol producers, and President Bush gave ethanol a big push forward.

Well, I beleive there are lots of places to put the blame on the high fuel prices. I am not sure where Bush fits in on all this but one thing is for certain, he is cutting a fat hog and we are funding the bill.

CM

droptine - I'm in complete agreement.
billt - Sorry, you have to forgive me. I keep forgetting that inflation is a good thing and I fail to greet each new day with eager anticipation to see what I can pay more for than I did the day before. Perhaps my joy could be complete if I insisted that whomever I buy from accept more than they demand. <img src="/ubbthreads/images/graemlins/grin.gif" alt="" />
Toot - your observation on "speculation" has merit. Speculation is purely added cost for no added value. Those engaged in speculation serve no purpose other than to drive up cost.
Again, I thank everyone for their thoughts and want to say that even when we disagree, I respect their right to them. Best, John

Jog,
Ethanol is an energy net negative to produce, that's fact, based on energy in versus yield. That's why the detractors screamed so loudly that the new energy bill is mostly a Farm Bill (pork) and they are right but go ahead now anyhow and start adding Archer Daniels Midland and Cargill to your portfolio, I have. The part of the bill for Nuclear is good. The part of the bill for opening all of the Outer Continental Shelf (Offshore, East coast and West coast) for exploration and production of oil and gas is good. Hybrid cars are a net negative for the buyer, bigtime. Fuel Cells, yet to be determined. Put all of the alternate energy means together, add them up and you'll have <10% of total come 2025 (estimated at 9.2%) with it presently being 6%, or so.

There is only 1 viable alternate source of any respectable magnitude and that is Coal Liquification. The U.S. is second only to China in coal production. The process is realtively simple and the technology has long been proven, we got lots of coal and we can come up to speed on it and kicking out product fairly quick. It is viable with 48-50$/barrel oil. Nazi Germany fed their war machine on it and the South Africans perfected the process during the many years of embargos that were placed on them. SASOL is the past master of the process and the world's biggest producer using that process. It is a Syn-gas process and yields a high btu liquid like a very high grade of diesel. The key is 50$/barrel oil and we're long past that. If prices hold, we'll see it.

One other that has gained a lot traction is Exxon Mobil's patented AGC-21 gas to liquid conversion process. Very simple, compact, portable and effective. Natural gas through a reactor, over a catalyst and in the presence of steam yields a clear liquid of better quality than diesel and the yield ratio is high. This process is the #1 candidate to get Prudhoe Bay North Slope gas-to-liquid into the existing pipeline if the new, proposed gas line fails to come to fruition. There's a pilot unit running there now with liquids being spiked in to the existing crude flow to the pipeline along with other hydrocarbon condensates. This is especially effective when spiking in the liquids to the crude from the West Sak field which is heavy crude, thus raising the quality and value of all of it. We got lots of gas all over the lower 48, too.

LNG is gonna be a big winner, too.

That's it gang as of August 16, 2005 a.d.

Old Toot

5sdad,

How do you feel about the fact that middlemen, suppliers, restaurants, taxis, etc. are tacking on a fuel surcharge to cover their rising fuel costs?
In effect, they are freezing their fuel costs, and passing along the increase to you.
So, for example, not only are you paying more for the fuel to get to the restaurant, you are paying again, for fuel, because the merchant is charging you for it. If you took a taxi, you are again paying twice for increased fuel charges, on the same trip!! If you flew to another city, took a taxi, and went to a restaurant, you are paying three times! Plus, you filled your car up before going to the airport, at $2.50 to $3 per gallon.
Seems like everyone is getting on the bandwagon to stick it to the consumer on this one.
And, if someone owns a business, they are declaring fuel costs as an expense of running their business. This offsets their tax liability to the government. Guess who makes up the difference- You, the consumer, do!! As gas prices go up, so do the amount of taxes you pay on a gallon, proportionately.

Bighorn - excellent point. I alluded to that situation in an earlier post, but did not make it as clear as you did. (I often know what I want to say, but have trouble getting it out.) My take is that they not only put on a surcharge to see that the consumer takes care of their business expense so that they don't have to figure operating costs into their budget, but that they also stick on just a "little extra" so they can come out ahead on the deal. Best, John

Somebody---maybe Bullwinkle, I just got to this thread and it's so long I can't remember---mentioned that states aren't complaining about the gas prices increasing because they make more money. That is true only in a few states. The feds, and most states, tax gasoline on a cents per galon (cpg) basis, so the retail price is irrelevant to them. In fact high prices may hurt them to the extent they depress demand and reduce sales. A huge proportion of that pump price is taxes, BTW. Here's a link to state gas taxes:

http://www.lmoga.com/taxrates.htm

I am amazed to learn that [bleep] McBushitler is behind the gas price increases---wouldn't have thought he'd have time what with all that warmongering, Supreme Court packing, poor people screwing. Kind of a strange tactic to support something that screws up the economy and has greatly diminished the impact of the recovery, but what can you expect from a dumb ass/evil genius?

The real world points have been made: blame it on the greens, who have made it impossible to build a refinery in the US, and have put huge amounts of oil in Alaska and on the Outer Continental Shelf off limits to protect caribou and beaches. Blame it on the booming Red China and Indian economies, boosting demand and squeezing supply. Blame it on terrorism fears, the Israel/PLO fight, Iraq, Iran, the Saudis, Chavez in Venezuela---all these things spook traders. A couple of hurricanes haven't helped.

And in spite of all that, gas is still cheaper, inflation adjusted, than it was in the 70s. Go figure.

Recent figures show that China's consumption is down 34% as compared to last July. It seems that some Chinese buyers are actually shipping lite sweet crude over here in hopes of better profits. Supply (unless your count the refining crunch) is not behind the current spike. What exactly is the cause, is a good question. If I knew it, I would make a ton on futures and not consort with the low types on this board. <img src="/ubbthreads/images/graemlins/smirk.gif" alt="" />

The old environmental regulation spiel about the lack of refineries is wearing thin as well. Current profits on a barrel of oil after it is refined are about $15 per barrel. Remember just about 6-7 years ago we were only paying $10 to $12 per barrel. At current prices, refineries could be built/expanded and be profitable even with troublesome environmental regulations. Yet, it is not being done (there is no need for anyone to point out to me that building a refinery would have little effect on CURRENT prices).

I just think the oil companies are doing what everyone else does. They are finding the maximum price the public is willing to pay for a commodity and charging it. Until demand actually begins to suffer because of prices, it is unrealistic to expect any lowering of prices. Once that happens, prices will go down, BUT only to the amount we have shown we are willing to pay. Get used to it. Cheap gas is gone. I don't think it will ever go below $2 a gallon again on the national average.

This is right on the money. All the gripeing in the world isn't going to bring back cheap gas. Think of it as the opposite of whats happened in the consumer electronics market. Look at whats happened to the price of televisions, surround sound systems, stereos, home computers, microwave ovens, VCR's, CD players, and DVD players. You'll pay more at the pump, and save on other durable goods. It all comes out in the wash, and life goes on. You'll spend more on gas to go buy your next TV, but you will get a better, bigger, cheaper set for less. <img src="/ubbthreads/images/graemlins/grin.gif" alt="" /> billt.

Joe--don't know where you got that stat, but Chinese oil consumption is increasing---only the rate of increase is slower this year, mainly because last year's rate was so astronomical...around 15%.

Here's a recent IEAreport on it:

LONDON (Reuters) - The International Energy Agency (IEA) cut its oil demand forecasts for China's rapidly expanding economy Thursday as growth in fuel consumption continued to slow from last year's blistering pace.

The IEA, adviser to 26 industrialized nations, revised down its prediction for 2005 oil use by 40,000 barrels per day (bpd) to 320,000 bpd and knocked 20,000 bpd from its 2006 forecast. Oil demand is now expected to increase by about 4.9 percent this year, down from a rapid 15 percent last year.

Expectations that China will draw in much more of the world's fuel to feed its expanding industries has contributed to a relentless rise in oil prices in the past two years.

"Demand is still strong within China but growth was exceptionally strong last year. That year-on-year growth is narrower is not a surprise," said Lawrence Eagles, head of the IEA's markets division. At the start of this year, the IEA was forecasting China's oil demand would grow 5.7 percent.

You are correct that the oil companies are awash in cash and could afford to build "greener" refineries----but the current situation in this country makes it almost impossible to build a refinery, no matter how state-of-the-art, in any geopgraphically practical location. You would be enjoined and tied up for years and years by the Sierra Club et al, local "environmental justice" crusaders, EPA bureaucrats, etc. etc. Additional refining capacity means more product, more sales and more profits....if they could do it they'd be doing it.