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That aside, reports that oil cartel Opec may have produced more in October compared with the previous month also weighed on prices. Opec is expected to have pumped 30.18 mln barrels per day (bpd) in October, up from a revised 30.15 million bpd in September.
'The figures have raised questions over the likelihood that Opec will deliver the planned 1.2 mln bpd cuts they have promised,' said Michael Davies at Sucden Research.
The rise is likely to be due to a pick-up in Nigerian production.
At least the gradient came back to normal. 'Supply and demand' must have changed on the premium side.
87 - $1.999 - down 4
89 - $2.099 - down 4
91 - $2.159 - down 4
93 - $2.199 - down 4
diesel - $2.359 - unchanged
kcram - Pickups Host
I say:
Not unless oil is $45 a barrel....
USA Average is still
$2.21
9/8/06 LA gas averages $2.91 retail $1.74 wholesale
10/23/06 LA gas average $2.45 retail $1.64 wholesale
The price at the pump is not what it seems many times.
During that same period US crude oil dropped $9 per barrel. From $60.49 per barrel to $51.87 per barrel.
San Diego gas prices have dropped over a dollar from the peak in August, or 33%. Oil prices have only come down about 23%. As of 10/20/06 the US contract average oil price was under $52. Not far to go back down to $45. OPEC basket price is not going up. It is going down as production goes back up, in spite of some of the dictators wishes.
Not unless oil is $45 a barrel....
The last time gas was $1.50/gallon was December of 2003. the price of oil ranged from 30-32 dollars per barrel that month (NYMEX price not OPEC).
Today it ended at $58.36, which is down from the all-time high of $78.40 on July 14th, 2006.
And there "is" a formula that bases the average price of gas as tied "loosely" to the price of crude. It's the gasoline futures price, which today closed at $1.49 a gallon for the WHOLESALE price.
That means, with the USA average at $2.12 today, retail gas is about 42% over the wholesale price of gasoline. That's about where it stays - 35% to 45% over the gasoline wholesale prices.
For gasoline wholesale prices to drop to levels which would put the retail average USA price all the way down to $1.50 would mean wholesale gasoline futures sitting at about 98 cents a gallon.
That's not going to happen unless Crude Oil comes WAY down.
Oil and gas price chart
Choose "USA Average" and select the "show crude price" checkbox and do a 36-month chart.
It's clear how they are tied together that way.
Actually the markup is more of a fixed amount rather than a percentage. The biggest amount is the federal, state and local taxes that get added to the wholesale price. Smaller amounts for things like distribution and marketing. The last time gasoline cost $1.50 at the pump the wholesale price was 85-90 cents a gallon.
I agree. Even if the smaller OPEC countries choose to cheat on their quotas Saudi Arabia is in a position to shoulder the entire cut themselves. The question they will ask themselves is would they rather sell 9.5 million barrels a day at $30 dollars or 8 million barrels a day at $60? They have already stated that they are comfortable with a $60 price and have informed their customers to expect a cut in November.
How long do you think the Saudis will cut production if other OPEC partners pick up the slack? I watched the Saudi oil minister say on TV they would be happy with $30 oil less than a year ago. If it costs them about $4 per barrel to produce they have a wide margin to work with. They also have a huge amount of investment in the USA to consider.
There are those that think that high gas prices will speed up the time line for alternatives. The oil companies squashed ethanol in the 1980s and they are doing it again. Why else would the gas prices drop first in the Midwest?
Conspiracy Alert....Conspiracy Alert....WoopWoopWoopWoop.....
That cannot happen today. There are too many engines and too many companies making FlexFuel vehicles, and there are too many 100% Ethanol vehicles in the world to use as test cases.
Plus, there are too many environmental groups with a lot of good science behind them these days too.
You say that OPEC does not have "the power it once had."
I say the same thing is true for Big Oil. They will either be a part of the new "cleaner fuel/less fossil fuel" paradigm or they will go the way of the great locomotive companies and the dinosaurs.
From Bloomberg today:
ETHANOL PRICES TAKE A PLUNGE
Bloomberg News
U.S. ethanol prices this week tumbled to an almost 15-month low, extending a seven-week plunge on ramped-up production of the fuel and slower gasoline demand after the summer. Ethanol averaged $1.7327 a gallon Friday, the lowest since $1.7118 on July 8, 2005, based on data from distributors in Des Moines, Iowa, and almost 30 other Midwest locations. Ten ethanol distilleries have opened in the U.S. this year; 42 are under construction.
Unless everything that I'm reading is incorrect Saudi Arabia is the only OPEC country with any significant excess capacity. The other countries couldn't pick up the slack if they wanted to.
If it costs them about $4 per barrel to produce they have a wide margin to work with.
Yes there is a large profit margin but $60 a barrel is a lot better than $30 and their country isn't in a position to pass up this revenue.
They also have a huge amount of investment in the USA to consider.
I've heard that argument before. The stock market is at an all time high and the global economy seems to be doing fine with oil at the current prices. For them to drive down prices by producing an oil glut would indicate to me that they just don't like money. When the Saudi oil minister was saying that he was comfortable with $30 oil that was probably based on an assumption that $60 oil would hurt the world economy. That assumption turned out to be incorrect.
How long will they continue to make ethanol if they get more for the corn to make corn flakes? Do you think the oil companies like ethanol? You tell me why gas dropped more than a 1/3rd when crude oil prices did not drop that much.
I like the statement that if consumption is cut 10% the oil barrel cost would decrease to $30/barrel. I don't know if the barrel amount is true or not, but at least more people are recognizing that we the consumer are responsible as well for the high prices of fuel. It's just not the government that's to blame.
No, they probably don't. But they DO KNOW that the era of "gasoline only" for powering cars is over or ending. They know that the alt fuel movement is here to stay. They had better (if they are smart) start investing some of those billions into alt fuels or like I said - they will cease to be relevant.
gary says: "you tell me why gas dropped 1/3 when crude did not drop that much."
There are numerous articles about that on the web. Most economists understand it perfectly. In essence, the steep drop in gasoline prices was due to the end of the busy summer driving season and a surplus of gasoline inventories after hurricanes did not disrupt refining operations. Also the market is less worried about the Iran crisis. Supply goes up, prices come down - Economics 101.
The world political situation has a major part in the equation, much moreso than anything the US government has power to do.
You don't have to tell me. Remember I am the one that said it would come back down before November. When many here were either wringing their hands or salivating over gas heading to $5 per gallon. It is a cycle just as the crude oil prices are cyclical.
The era of the gas engine is far from over. You and I will be long gone when that happens. If you were worried about that you would not have bought a GAS ONLY hybrid.
PS
No one in their right mind would buy a vehicle that will only run on ethanol. They did that 25 years ago in Brazil. They ended up with junkyards full of useless cars.
Every major vehicle manufacturer has either a Flex Fuel, diesel, hydrogen, EV, PHEV, or gas/electric hybrid in R&D right now. That fact alone proves my point that while gas engines WILL be around for a long long long time to come, them being the only option on the block is over forever.
WASHINGTON — U.S. drivers faced their first rise in gasoline costs in three months as the national average pump price increased a penny over the last week to $2.22 a gallon, the government said on Monday.
The average price for regular unleaded gasoline is still close to the lowest level since last December and 26 cents less than a year ago, according to the Energy Information Administration's weekly survey of service stations.
I noticed the Shell raised their other grades a bit too. On Saturday I put 89 in the truck for $2.219 per gallon, but now it's up to $2.269
We hit $2.25 for 87 grade today (halloween) at our corner Sunoco and $2.35 about 2 blocks away at a Mom / Pop Exxon.
Odie
Odie's Carspace
http://money.cnn.com/2006/11/01/magazines/fortune/pluggedin_taylor_SUVsales.fort- une/index.htm?postversion=2006110210
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By the way the prices dropped 2 more cents across the board in San Diego yesterday. $2.27 or less at the 50 lowest priced stations.
The national average as of Tuesday 10-31-06 was still $2.21
Today it is the same - $2.21
Lotsa Gas available
Gasoline production at 5-year high
SACRAMENTO
November 1, 2006 7:55pm
• Turnarounds continue
• Prices still drop
Production of California gasoline just missed the one-million-barrels-a-day mark last week and diesel production also declined, according to the California Energy Commission.
For the third week in a row, production of California gasoline was higher than it has been at this time in over five years, the commission says.
While some California refineries continued their seasonal maintenance, production of gasoline for use in the state averaged 995,429 barrels a day for the week ending Oct. 27. Production fell 6.7 percent from the previous week but was still 13.4 percent better than a year ago. Inventories were off 5.4 percent for the week but were 15.7 percent higher than last year's totals.
California's retail price for regular gasoline fell another 5 cents to average $2.43 a gallon for the week ending Oct. 30, the commission said Wednesday. The statewide price of diesel fell to $2.65 a gallon for the week ending Oct. 30, the lowest average retail price since the week of Jan. 16.
Doubtful that the national average will dip below $2.00/gal for 87 no-lead. It is nice to see prices get more reasonable, but, they have a long way to go still, eh?
2021 Kia Soul LX 6-speed stick
I seem to remember spending around 60-70 cents a gallon for gas in the mid 70's. Factor for inflation and that's got to be over $2/gallon. Back then there were a few very small imports from Toyota, Datsun, Honda that could get around 30 mpg but they were nothing compared to cars like the current Honda Civic that gets 30/40 mpg. Young people today have a lot of freedom in how much of their income they spend on gas.
When you say that the national average for gas is $1.83 where is that coming from?
You have a 26 gallon gas tank that you fill up 8 times a month. Hmmm..., that's almost 2,500 gallons of gas a year you go through. Very impressive. As glutonous as Americans are when it comes to burning gas you should be thankful that there aren't more people like you out there because I can assure you gas would not only be more expensive but hard to find. Next time you start pondering whether or not its the Republicans or Democrats who are to blame you might want to look in the mirror.
I doubt if people spend a higher percentage of their gross or net income on gas than they did 30 years ago, but there are a lot more things that people blow their disposable income on these days, plus I think it's the in-thing to be house-poor and have lots of credit card debt, so fluctuating gas prices might actually hurt some people more.
I remember when I started driving in 1987. Gas tended to fluctuate between ~85 cents and a buck a gallon. I made $3.75 an hour and drove a 1980 Malibu that would get maybe 15-16 around town, and 21-22 on the highway. It didn't faze me in the least, but back in those carefree days my biggest worry was the car insurance, which was $1361 that first year!
Nowadays though it seems like young people "need" the latest CD's, DVDs, electronics, cell phones, styling fashions, etc. So even though they might really have a lot of freedom in how much they spend on gas, they just don't see it.
I agree even though its gotten tough not to be house poor. If you are concerned about how the young people are going to get by these days that concern should definitely start with housing costs. Gas prices going up a buck a gallon is trivial compared to how much a starter home now costs. The government was tossing around some ideas last year about replacing the home mortgage deduction with a tax credit. In all likelihood this would have made homes more affordable for the young and less affluent. I guarantee you that there are posters aware of this proposal that adamently opposed it yet have the utmost concern over how a poor or young person will afford a gallon of gas. A lot of self serving points of view in this country. You ask a person's opinion on what's fair/unfair or right/wrong and they first have to think, "how does this affect me"? We've become a country of whiners.
I read today that gas consumption was up 4% from last year and consumption of distillates was up 8%. Those are the 2 big components in a barrel of oil so let's say oil consumption was up 5%. In a country that consumes over 20 million barrels a day that equates to another 1 million barrels a day. We just helped OPEC meet their objective.
Maybe they will give us a discount. We also helped our neighbors to the North and South. We actually have gotten less so far in 2006 from our top two OPEC countries, Saudi & Venezuela. We are spreading the wealth to other countries.
For me I would buy an EV for 90% of my driving. Same as diesel cars, you cannot buy what is not for sale. So I drive a fullsize truck and don't worry about the price of gas. I sure as heck would not buy some little gas econobox to save $30 per month in gas. Makes no sense.
While the US economy was growing during the 90's on a global level the economy was pretty stagnant until the latter part of that decade. Its a very different climate now. Consumption has far outpaced increases in production capacity. Obviously that's an unsustainable trend.
How can you say that when there is a clear surplus in both oil and refined products? OPEC is talking about cutting production. You don't do that if there is demand. Getting Iraq back up to speed is a big part of the oil picture. They are the second largest known reserve. They are not under that OPEC mandate.
I didn't say that consumption exceeded production I was stating that consumption is growing faster than production capacity. So the trend is that the oil producers are approaching 100% capacity. They aren't there yet but they are a considerably closer than even 5 years ago.
By all accounts Iraq has a lot of untapped reserves. Accessing them is going to be a long term process with the obvious obstacles caused by the instability in that country.
Rocky
Post 5757
Lowest reported USA price is $1.86 in San Angelo, TX.
I drove to St. Louis to a band contest when $2.19 was the selected restoration price. Amazingly stations all along I70 from Ohio to Illinois had chosen $2.199 as their free market highest price. Others were lower in some areas.
Same for drives to Cincinnati last weekend and this weekend. All stations had chosen the same high price as the maximum. A few were lower.
Do others find this same "group" pricing occuring or is this an Eastern Midwest phenomenon?
2014 Malibu 2LT, 2015 Cruze 2LT,