Gasoline over $4 coming to a pump near you because this thread is ass

[Donger]

http://www.bloomberg.com/apps/news?p...d=afOlUzd30YOo

Pretty alarmist, IMO, but possible.

Spoiler!

April 23 (Bloomberg) -- Whether it's $50 to fill up your Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is coming to a pump near you.

Fuel prices are rising at a pace not seen since Hurricanes Katrina and Rita knocked out a third of the U.S. oil refining industry in 2005. Gasoline consumption is climbing twice as fast as last year and will accelerate when summer travel begins late next month.

``What we're surprised by is the increased demand,'' said James Mulva, chief executive officer at ConocoPhillips, whose refineries from California to New Jersey produce 56 million gallons of gas a day, enough to meet 14 percent of the country's needs. ``Even though the price of gasoline is up, the demand is up,'' he said in an April 12 interview in Houston.

Population gains and U.S. economic growth are causing an increase in fuel purchases, according to Orlando, Florida-based AAA, the nation's largest organization for motorists. The U.S. economy will expand at a 2.4 percent annual pace in the second quarter, up from 1.8 percent in the first three months, according to the median estimate of 74 economists surveyed by Bloomberg. Gasoline use is rising almost 5 percent above the five-year average.

Americans are resigned to higher prices, says David Pursell, a principal with Pickering Energy Partners, a consulting firm in Houston.

``Last year, we had pump prices well over $3 for the summer and gasoline demand was up,'' Pursell said in an interview. ``Would $4 gasoline cause demand contraction? I think it will, but I also thought $3 gasoline would.''

Pump Prices

Gasoline inventories, measured by the days of demand they will cover, are at the lowest level in two decades for this time of year because of refinery fires, power failures and maintenance work oil companies failed to complete in 2006. No new U.S. refinery has been built in three decades, increasing the strain on existing plants.

Pump prices in the U.S. may increase to $4 a gallon from a nationwide average of $2.87 today, especially if hurricanes threaten Gulf of Mexico refineries, says Peter Beutel, an analyst at Cameron Hanover Inc. in Stamford, Connecticut, who helps industrial consumers manage energy costs.

``Hurricanes are always the huge wild card,'' said Beutel. ``We're all praying for a year like 2006 rather than 2005.''

The June-to-November Atlantic Ocean hurricane season may produce 17 tropical storms, with nine reaching hurricane force and four becoming major hurricanes whose winds exceed 111 miles per hour (179 kilometers per hour), London-based forecasters at Tropical Storm Risk said. Some of the storms will strike the Gulf Coast this year after a benign 2006, AccuWeather.com predicted.

Inflation Risk

Higher pump prices will make winners of refinery owners such as ConocoPhillips, San Antonio-based Valero Energy Corp. and Royal Dutch Shell Plc of The Hague. Shares of Valero and Sunoco Inc., whose only business is refining, are rebounding after a decline at the end of last summer.

The increase in fuel costs threatens to quicken inflation and restrain consumer spending in the U.S. An appreciation to $4 a gallon would add more than $10 for a driver who fills the 12- gallon tank of a Toyota Motor Corp. Prius. The owner of an Expedition, a Ford Motor Co. sport-utility vehicle with a 34- gallon capacity, faces an increase of almost $40.

Many Americans have no choice but to drive more, says Christopher Knittel, an economist who studies fuel consumption at the University of California in Davis.

More Commuters

``We live farther from our jobs than we did in the 1970s, and with the rise of dual-income households, we now have two people who drive those distances every day,'' Knittel said.

Consumers also do more driving for things such as taking children to soccer practice, which they are unlikely to quit, he said. The U.S. population has increased 1 percent a year in the past decade to 301 million in 2007, adding to demand for gasoline, economists said.

Rising fuel prices make it less likely that Federal Reserve policy makers, who have cited inflation risks for the past year, will cut interest rates to spur economic growth. Before the hurricane-induced peak in 2005, U.S. gasoline topped out at $1.42 a gallon in March 1981, or $3.21 when adjusted for inflation, according to the Energy Department.

Economies in Europe and Asia are less likely to be hurt by gasoline prices because fuel already is subject to high taxes designed to encourage conservation. A gallon of unleaded costs about 3.25 pounds a gallon ($6.49) in the U.K., and in Japan it's 130.3 yen per liter ($4.16 a gallon).

$4 Barrier

U.S. consumers will get little relief on gasoline prices from Europe this year, unlike 2005, when oil companies shipped more across the Atlantic after the hurricanes. Europe's gasoline inventories in February were 114.2 million barrels, down 11 percent from two years earlier, according to the International Energy Agency in Paris. The drop in Europe was almost twice the 5.7 percent decline in U.S. supplies in that time.

``Just as we used to think $3 a gallon was an impenetrable barrier, now it's $4,'' said Peter Morici, a professor at the University of Maryland School of Business in College Park and former chief economist for the U.S. International Trade Commission. Gasoline at $3.50 is likely, Morici said, and a conflict with Iran or any event that disrupts crude supplies may push it to $4.

Pump prices rose 33 percent in the past 11 weeks, the fastest rate of gain since a six-week, 34 percent rally to the record $3.069 in September 2005, Energy Department data show.

Bodman's `Worry'

U.S. Energy Secretary Samuel Bodman in an interview last week said the national average pump price could break the record this summer. While his agency's official forecast is for gasoline to peak next month at about where it is today, hurricanes, refinery closures or crude oil supply cuts may send prices higher, he said.

Higher prices are ``a legitimate worry,'' Bodman said. ``We have trouble spots all over the world'' that could boost crude oil prices. ``We're in a very tight situation.''

Spending on fuel in the U.S. consumes half as much household income as in the early 1980s, which means gasoline would need to reach almost $6 a gallon to have the same effect on the economy as in 1981, according to the Federal Reserve Bank of Dallas.

Storage tanks at U.S. refineries, terminals and ports hold enough gasoline to cover almost 22 days of domestic demand, 8.2 percent less than the five-year average and the lowest for this time of year since the 1980s, Energy Department figures show.

Shortages

Valero-owned filling stations in Denver and Colorado Springs, Colorado, ran dry after a Feb. 16 explosion and fire shut the company's McKee refinery in Sunray, Texas. A day earlier, a blaze at an Exxon Mobil Corp. plant in Nanticoke, Ontario, slashed output, resulting in shortages and higher prices across eastern Canada.

The McKee shutdown strained supplies so much that ConocoPhillips postponed maintenance at its Borger, Texas, refinery north of Amarillo to prevent shortages in the region.

``Refineries are becoming more complex,'' Mulva said in the Houston interview. ``What we're finding is it's more difficult keeping reliability up with more sophisticated pieces of equipment that are highly integrated.''

Tesoro Corp. of San Antonio, the second-largest refiner in the western U.S., said first-quarter refinery use dropped because oil companies delayed until this year maintenance that could have been done in 2006. The portion of U.S. refining capacity that was in operation in the first quarter declined to 87.3 percent from 88.9 percent a year earlier, according to Energy Department data.

`Refineries Blow Up'

``Prices will depend entirely on whether we have a couple of refineries blow up,'' said Philip K. Verleger, an economist who runs a consulting firm in Newport Beach, California. ``It's almost impossible we'll get to $4 a gallon if all the refineries run well this summer. But if something happens and there are problems, then anything's possible.''

The average share gain for Valero, Tesoro and six other oil-refining companies is 26 percent this year, outperforming the 4.1 percent gain for Exxon Mobil and a 4.7 percent increase for the Standard & Poor's 500 index.

The shares will continue to rally, said Paul Carlson, who helps manage $3 billion at HGK Asset Management in Jersey City, New Jersey.

``Refiners are doing very well these days,'' said Carlson, whose holdings include ConocoPhillips, the second-biggest U.S. refiner. ``There will be lots of demand for any new refining stocks.''

`Back in Favor'

As recently as August, investors were selling oil refiners on concern an economic slowdown would slash fuel demand in the U.S., the world's largest energy market. During seven weeks last August and September, Valero shares fell 29 percent, wiping out $12 billion in market value.

``Refining is very much back in favor,'' said Douglas Ober, who helps oversee $2.3 billion at Baltimore-based Adams Express Co. ``Even with higher prices, we haven't seen any substantial cutback in demand. They're cranking out as much of this stuff as they can, and we're throwing it in our tanks as fast as we can.''

The margin earned from processing crude oil into fuels rose to $24.68 a barrel on April 11, the highest since right after the hurricanes in September 2005. The margin has since retreated to $22.12 a barrel, still about double the five-year average.

``It'll be a fairly tight gasoline market all through the summer,'' said Robert Hinckley, an analyst at Rochdale Securities in New York.

[jd1020]

Originally Posted by Bugeater

Most places don't plug them, they patch them. Plugging tends to break belts. Now with that said I generally plug older tires myself, but a newer tire I usually have patched. Think it's normally $25 around these parts.

Free for me. Any time I'm buying tires its from a place that offers free repairs, rotations, and balance for the life of the tire until its beyond that .2 inch tread thresh hold or whatever it is. So the only time I'm patching them myself is when they are old, otherwise its on the shop and if they **** it up its a free tire for me baby.

Sam's Club, Discount Tire, and I think there's a smaller localized shop in my town that offers that deal.

EDIT: Just looked at Sam's Club and apparently you dont have to buy your tires or even have them installed by them, it's simply a perk of being a member.

Lifetime tire balance, rotation and free flat repair (Lifetime of the tire)

Flat Repair is a membership benefit and does not require the tires to be purchased or installed at Sam's Club

[poolboy]

Originally Posted by jd1020

You guys dont plug your tires yourself? Sheesh.

https://www.amazon.com/BETOOLL-Repai...47&sr=8-5&th=1

$15 to plug 15 nails. Who the hell would spend $40 for a 16 year old to do that?

wtf ..I used to pay 27 cents for 15

[jd1020]

Originally Posted by poolboy

wtf ..I used to pay 27 cents for 15

Well you are paying for the tools in that kit as well.

If you already have them and you just need plugs they are like 20 cents a piece.

[Rasputin]

Originally Posted by jd1020

You guys dont plug your tires yourself? Sheesh.

https://www.amazon.com/BETOOLL-Repai...47&sr=8-5&th=1

$15 to plug 15 nails. Who the hell would spend $40 for a 16 year old to do that?

I didn't know it was going be 40 ****ing bucks until after the fact they fixed it. He goes' 40 bucks my jaw dropped. Had I known this before I would have looked up other places to go even if it's thirty minutes away. I'm still pissed because the last time before I went there they charged 20 bucks a couple years ago.

[Holladay]

Different topic.

I just bought a new car that "requires" premium (91 octane) but will run on 87. Is the cost difference in mpg vs cost /gallon generally worth using 91 vs 87?

I know there are a lot of variables, but I will spend more money on "better" gas if it gets me 2 mpg better in mileage. Thought is that it is a net zero between the two, but it is better for the engine in the long run.

I haven't done the math and the car is too new to be able to find a distinction...yet

A possible alternative issue is the with the same cost/mile and better for the engine, it might be a tad faster. Not that is needed to go sub 5.2 0-60.

[penguinz]

Originally Posted by Holladay

Different topic.

I just bought a new car that "requires" premium (91 octane) but will run on 87. Is the cost difference in mpg vs cost /gallon generally worth using 91 vs 87?

I know there are a lot of variables, but I will spend more money on "better" gas if it gets me 2 mpg better in mileage. Thought is that it is a net zero between the two, but it is better for the engine in the long run.

I haven't done the math and the car is too new to be able to find a distinction...yet

A possible alternative issue is the with the same cost/mile and better for the engine, it might be a tad faster. Not that is needed to go sub 5.2 0-60.

It's not about mileage. Running octane lower than recommended can cause damage to engine and/or emissions system.

[htismaqe]

Originally Posted by jd1020

Free for me. Any time I'm buying tires its from a place that offers free repairs, rotations, and balance for the life of the tire until its beyond that .2 inch tread thresh hold or whatever it is. So the only time I'm patching them myself is when they are old, otherwise its on the shop and if they **** it up its a free tire for me baby.

Sam's Club, Discount Tire, and I think there's a smaller localized shop in my town that offers that deal.

EDIT: Just looked at Sam's Club and apparently you dont have to buy your tires or even have them installed by them, it's simply a perk of being a member.

I wouldn't recommend Sam's Club AT ALL. I know of two instances where the one closest to us didn't tighten the lug nuts after changing a tire and the wheel fell off after leaving the lot.

[jd1020]

Originally Posted by htismaqe

I wouldn't recommend Sam's Club AT ALL. I know of two instances where the one closest to us didn't tighten the lug nuts after changing a tire and the wheel fell off after leaving the lot.

I wouldn't recommend the one closest to you then. But Ive got tires on now from them because they were the cheapest price at the time because of a sale and I've had no problems with the Sam's Club in my area. Their policy is to even have you come back after 50 miles to have the lug nuts rechecked and tightened again.

[JohnnyHammersticks]

If you buy them there, Discount Tires rotates and fixes flats for free for the life of the tire(s).

[Bugeater]

Originally Posted by JohnnyHammersticks

If you buy them there, Discount Tires rotates and fixes flats for free for the life of the tire(s).

I wonder if that applies to tires from tire rack.com and installed there....

[htismaqe]

Originally Posted by jd1020

I wouldn't recommend the one closest to you then. But Ive got tires on now from them because they were the cheapest price at the time because of a sale and I've had no problems with the Sam's Club in my area. Their policy is to even have you come back after 50 miles to have the lug nuts rechecked and tightened again.

The same thing happens at Walmart. Yeah, they have great policies but they have shit employees that don't give one **** about how good of a job they do. They don't depend on you for repeat business like a local shop does and they're getting paid Walmart wages on top of that.

I've gotten tires at Walmart/Sam's Club twice. I know several other people that have done it, as well. Nobody ever has a good experience.

So I'd say your experience is the exception, not mine.

[htismaqe]

And FTR, the local Walmart is 5 miles away. The "local" Sam's Club is 45 miles away. Different cities, different people, same result.

I have two friends here that got oil changes at Walmart and in both cases, the tech didn't put the damn plug back in after changing the oil. What do you suppose happened to their cars?

[Bugeater]

Originally Posted by htismaqe

The same thing happens at Walmart. Yeah, they have great policies but they have shit employees that don't give one **** about how good of a job they do. They don't depend on you for repeat business like a local shop does and they're getting paid Walmart wages on top of that.

I've gotten tires at Walmart/Sam's Club twice. I know several other people that have done it, as well. Nobody ever has a good experience.

So I'd say your experience is the exception, not mine.

I've had a set put on a grand caravan and my current vehicle there and no problems...?

[htismaqe]

Originally Posted by Bugeater

I've had a set put on a grand caravan and my current vehicle there and no problems...?

You're lucky.

Not saying I've never had (or heard of) a good experience at Walmart or Sam's Club - they do happen.

It's just that the bad experiences are much more frequent, at least in my anecdotal experience.

[Bugeater]

Originally Posted by htismaqe

You're lucky.

Not saying I've never had (or heard of) a good experience at Walmart or Sam's Club - they do happen.

It's just that the bad experiences are much more frequent, at least in my anecdotal experience.

Yep...YMMV. I had the set done on the caravan about 20 years ago so that doesn't really mean much today. And the ones for the Trailblazer are an oddball size and they have a good selection if you order them online. And I generally look that shit over before I leave because Walmart. Gotta CYA no matter where you go.