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.

[Otter]

Averaging $4 a gallon here.

A set of good mountain bike tires will cost me a fill up (~$70) and last me a little over a year. Thank you for a well planned out bike route. If they want to keep this shit up better be working on some work from home jobs.

[displacedinMN]

As gas prices continue to climb, some parts of the metro are starting to see some stations have surpassed – or are near – the $4 per gallon mark.

According to AAA, gas prices in Minnesota jumped about five cents on average overnight Thursday and into Friday. In just the last week, prices have gone up nearly 15 cents.

GasBuddy said as of late Friday morning a Kwik Trip in Vadnais Heights, a Speedway in both Little Canada and West St. Paul, a BP in Richfield, a Minnoco in Rosemount, as well as a Casey’s in both North Branch and Waconia all had a price of $4.09 per gallon. Meanwhile, other gas stations had prices of $3.59 per gallon.

In addition, GasBuddy says throughout the next several days, drivers will see prices spike anywhere from 50 cents to $1 per gallon. It adds a refinery outage may be to blame for the price increase, which may last until the change to winter gasoline, which happens later this month.

The price at the pump went up as much as 40 cents in some spots in Minnesota, exceeding $4/gallon on Friday and those costs could continue to rise.

Patrick De Haan, the head of petroleum analysis for GasBuddy, initially warned on Thursday of a spike anywhere from 50 cents to a dollar per gallon over the next couple of days in Midwest states.

“The good news is that we can narrow that range down now to more like 35 to 65 cents,” he said in an interview on Friday morning.

“What brought us here was just a big squeeze as we start to navigate the change back to cheaper winter gasoline. A lot of refineries are only producing winter gasoline now but the problem is, in the interim, that can lead to some squeezes here before the changeover happens. And that’s exactly what happened,” De Hann explained. “A couple of refineries went down, both for planned and unplanned maintenance. And that’s why we got a sudden squeeze.”

It’s as simple as supply and demand, he said.

“And a lot of people like to point fingers elsewhere, but it’s just the system we have,” De Haan said. “It’s not perfect, and it can cost you and I much more.”

It’s hitting other businesses too, like local carpet installer William Stryker who was filling up at a Minneapolis pump for $4.19 on Friday.

“My fuel’s doubled on a yearly basis,” Stryker said. “And not only that, now I have to raise the price on people’s carpet because I don’t have the money to put gas in our cars, and I have to have a van to move carpet.”

“This is still a rare situation, it shouldn’t happen very often,” De Haan said. “But again, the outlook for refining is not good. These issues could become more frequent, as refineries start to exit the business and shut down ahead of the transition to EVs.”

[Otter]

Originally Posted by Tylerthigpen!1!

Should gas be the same price for essentially 20 years?


If I had to pick between 1) high gas prices and preserve God's creation for my kids or 2) low gas prices and every swinging dick driving a truck to their office/grocery store; I'm choosing one.

I realize that poor folks are paying a disproportionate share of the price increase. Pretty shit hand they were dealt.

Ever try and drive w/o 4wd at 10,000 feet in Colorado in January?

[PHOG]

$3.79 in Tulsa. Up 30 cents overnight Thursday.

[displacedinMN]

Originally Posted by PHOG

$3.79 in Tulsa. Up 30 cents overnight Thursday.

And it is usually the cheapest gas in the US- correct?

Sent from my SM-G991U using Tapatalk

[Donger]

Yes, crude is approaching $90/barrel and we've had some reduction in refining output. Add those together and this is what you get.

[Megatron96]

Originally Posted by Tylerthigpen!1!

Should gas be the same price for essentially 20 years?


If I had to pick between 1) high gas prices and preserve God's creation for my kids or 2) low gas prices and every swinging dick driving a truck to their office/grocery store; I'm choosing one.

I realize that poor folks are paying a disproportionate share of the price increase. Pretty shit hand they were dealt.

How nice that rich folks have this level of understanding.

[Imon Yourside]

Originally Posted by Donger

Yes, crude is approaching $90/barrel and we've had some reduction in refining output. Add those together and this is what you get.

All by design

[PHOG]

Originally Posted by displacedinMN

And it is usually the cheapest gas in the US- correct?

Sent from my SM-G991U using Tapatalk

If it's not, it's pretty close yes.

[Donger]

Originally Posted by Imon Yourside

All by design

Design by whom?

[Bugeater]

Originally Posted by Donger

Design by whom?

Go **** yourself.

[Donger]

Originally Posted by Bugeater

Go **** yourself.

It wasn't me. I've been busy with... other things.

[Donger]

Originally Posted by Bugeater

Go **** yourself.

Oh, and:

KANSAS CITY, Mo. — Kansas and Missouri drivers should prepare for a steep price increase at the pump, experts say.

Gas Buddy, which monitors gas prices around the United States, Canada and Australia, predicts gas prices in the Midwest will spike anywhere from 50 cents to $1 per gallon over the next several days.

Experts fear gas prices could get worse before they get better

There are few details on what’s leading to the increase, but Gas Buddy says a refinery outage could be to blame.

Patrick De Haan, head of petroleum analysis at GasBuddy, said the price hike could be limited if the EPA switches to the winter blend of gasoline early.

“The spike in gas prices may be relatively short-lived, but the situation remains volatile,” De Haan said in a news release.

As of Thursday, wholesale gas prices in the Midwest were already up nearly $1 per gallon from one week ago, and AAA reports a gallon of gas is up 7 cents in Missouri and 3 cents in Kansas.
See the latest and lowest gas prices in the Kansas City area

But AAA did note on Thursday that the national average for a gallon of gas was down two cents since last week, falling to $3.80. Missouri remains one of the top 10 least expensive states with an average gas price of $3.55, as of Friday. Kansas isn’t far behind at $3.59 per gallon.

Gas Buddy expects stations will start raising their prices significantly soon and advises drivers to fill up now before prices spike.

[jjchieffan]

I drove from Rogers to Branson today. Gas was $3.89 in Rogers. Isaw a station on the way that was $3.39 and filled up there. It was still $3.39 when I came back through surprisingly.

[penguinz]

Originally Posted by Otter

Ever try and drive w/o 4wd at 10,000 feet in Colorado in January?

I get 6-8 mpg in 4WD. I still hope we get blizzard after blizzard. Rarely happens in KC area though.