Gas Prices..this thread got me wondering

[Mr Miyagi]

Why is gas so expensive..where do we get our oil from?

The thread that got me wondering:

http://meguiarsonline.com/forums/showthread.php?t=1174

Where the oil comes from:




So..why are gas prices going through the roof? Basically we can get the vast majority or our oil/gas from 'friends' or from our own resources.

Our allies, however don't get most of their oil from 'friendly' sources. The oil supply is limited. Emerging economies like China and India are using much more oil than they did a few years ago.

So, it would seem high oil/gas prices are going to remain high. The US will continue to support its allies and emerging economies are going to continue to grow.

[Nick Chapman]

Re: Gas Prices..this thread got me wondering

It all boils down to what the US dollar is worth. And it ain't worth **** right now

1 year or so ago, I was able to fill my van up for about $50-$55 bucks. Now, I'm spending $100 It's gonna be really hard to turn a steady profit when it hits $4 this summer.

[Jeepster04]

Re: Gas Prices..this thread got me wondering

I just dont drive anymore. Ive only put around 1.5k miles on my Jeep this YEAR. I sit at school and do nothing but study and sleep. Its taken a toll on my mental status though.

[benhui86]

Re: Gas Prices..this thread got me wondering

It all boils down to what the US dollar is worth. And it ain't worth **** right now

1 year or so ago, I was able to fill my van up for about $50-$55 bucks. Now, I'm spending $100 It's gonna be really hard to turn a steady profit when it hits $4 this summer.

buy a diesel sprinter.... it'll solve all your problems....

[Nick Chapman]

Re: Gas Prices..this thread got me wondering

buy a diesel sprinter.... it'll solve all your problems....

How would that solve anything? Diesel is $0.75 per gallon higher here in Texas than regular 87 octane, and my van currently gets between 14 and 16 MPG.

If anything, buying a diesel will only add to my fuel bill, along with adding a HIGHER vehicle payment..........no thanks

[Peer81]

Re: Gas Prices..this thread got me wondering

You're overlooking one very important thing! In Saudi the oil almost blows out of the ground, is more pure (I don't know about labor cost?). In other parts you need to pump the oil from the ground, give it an extra refinement etc and guys in Canada want a little more an hour then in Mexico.
I don't know if there is a history with where the US got there oil in the past but it could be the US is changing from the middle east to other sources. The way I look at it in the past the US got all the oil the wanted and the left overs where for the rest of the world. Now the dollar is low the prices sort of level in the world but in the past we payed 3 to 4x you do for one gallon.

The only thing that amazes me is that diesel is that high in the US. In Europe you always pay half for diesel compared to normal fuel.

Groeten Peter

[Tim Lingor]

Re: Gas Prices..this thread got me wondering

Hey,

Canada has aways been a major supplier of crude oil to the US for many many years. Ironically, though we supply oil, our gas prices are MUCH higher than yours. For example, it is currently $1.22 per Litre or $5.54 Imperial Gallon and rising. They claim it will hit $1.40 per Litre by the summer!

It is much more than the value of the dollar that has hurt fuel prices. Huge increases in usage in developing countries, combined with refineries whom are slowing down production for what they say is for an increased demand during the summer has driven up the prices. Combine that with the instability in the market due to the fluctuation in the both the value of the dollar and the stock market, and we have prices for crude never seen before in history. The problem escalates as people stop spending as evident in the housing-start-up problems in the US.

Tim

[RamAirV1]

Re: Gas Prices..this thread got me wondering

Hey,

Canada has aways been a major supplier of crude oil to the US for many many years. Ironically, though we supply oil, our gas prices are MUCH higher than yours. For example, it is currently $1.22 per Litre or $5.54 Imperial Gallon and rising. They claim it will hit $1.40 per Litre by the summer!

It is much more than the value of the dollar that has hurt fuel prices. Huge increases in usage in developing countries, combined with refineries whom are slowing down production for what they say is for an increased demand during the summer has driven up the prices. Combine that with the instability in the market due to the fluctuation in the both the value of the dollar and the stock market, and we have prices for crude never seen before in history. The problem escalates as people stop spending as evident in the housing-start-up problems in the US.

Tim

Very, very true!

There is a another factor. Not a single new refinery has been built in the US in last 30 years! EPA rules make it literally impossible for new companies to come in and provide competition. Barriers to competition lead to higher prices. So that is something to consider if anyone is wondering why the existing oil companies are making record profits. Also Mexico and China are drilling for oil off our coasts, in areas where US oil companies are not allowed to.

RamAirV1

[kellyinkc]

Re: Gas Prices..this thread got me wondering

Very, very true!

There is a another factor. Not a single new refinery has been built in the US in last 30 years! EPA rules make it literally impossible for new companies to come in and provide competition. Barriers to competition lead to higher prices. So that is something to consider if anyone is wondering why the existing oil companies are making record profits. Also Mexico and China are drilling for oil off our coasts, in areas where US oil companies are not allowed to.

RamAirV1

I agree. And when a refinery has a problem and has to shut down, up goes the price of gas. They are running at near 100% capacity now, any hiccup is bad.

This high cost is driving up food prices in a hurry. Been grocery shopping lately?

Kelly

[Tim Lingor]

Re: Gas Prices..this thread got me wondering

I agree. And when a refinery has a problem and has to shut down, up goes the price of gas. They are running at near 100% capacity now, any hiccup is bad.

This high cost is driving up food prices in a hurry. Been grocery shopping lately?

Kelly

On that same note, wheat prices are going through the roof as many farmers are switching their crops to corn due to ethanol production. Why have a crop of wheat for a volatile market when corn will sell easily.

Tim

[kellyinkc]

Re: Gas Prices..this thread got me wondering

On that same note, wheat prices are going through the roof as many farmers are switching their crops to corn due to ethanol production. Why have a crop of wheat for a volatile market when corn will sell easily.

Tim

Oh yeah, wheat is through the roof. Plus corn is going sky high. A LOT of things are made with corn products. And they are rising in price as well.
As is precious metals. The inflation genie is shaking the bottle and about the explode.

Kelly

[Tim Lingor]

Re: Gas Prices..this thread got me wondering

What I am worried about is that when people stop spending money, stores have to raise prices as they are selling fewer products. In essence, stagflation sets in, followed by a lengthy market down turn!

Tim

[kellyinkc]

Re: Gas Prices..this thread got me wondering

What drives me crazy is that with corn sqeezin's, as Granny would say, one gets less gas mileage. That does not make much sense to me.

Kelly

[Andy M.]

Re: Gas Prices..this thread got me wondering

The cost of fuel pretty much drives everything. Pardon the pun. When fuel prices go up the cost of transporting goods to stores goes up. As transportation companies raise their prices it is just passed on to the consumer, unfortunately.

Andy
101impala

[theamcguy]

Re: Gas Prices..this thread got me wondering

Two reasons why gas is so expensive and rising and it has nothing to do with where the oil comes from.

First worldwide demand is up. The pent up economies in China and India are actively buying oil and lots of it. Thye have to have something to put in all of those new cars they are buying. The supply of crude is good but they are selling all they can pump. They pump more and someone buys it. When you have that kind of competition, contracts signed for future oil deliveries etc the price goes up,

The second reason for high gas prices is US refining capacity or the lack of it. There has not been a new refinery built in the US since 1976 and since then a lot have been shut down. Demand has risen since 1976, the US population has almost doubled since then. If refinery capacity can not meet demand then what it does produce is already spoken for hence high prices. We not only import crude but we now import refined oil products as well. All tied into not enough US capacity. The suppliers have control of how much comes out the refinery just as OPEC has control of how much comes out of the ground. By controlling both processes and with strong demand worldwide, prices have gone up.