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Gas prices buck trend
Fuel cost normally drops in June, expert says
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Simi Valley resident Juan Arroyo pumps gasoline Friday at a 76 station in Simi Valley. The county's average price for regular unleaded hit a record $4.38 a gallon Friday, which is up 20 cents since May 30 — the fastest one-week spike in five years — according to the Automobile Club of Southern California.
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More from County NewsEven though gas prices have retreated in other parts of the country, California isn't having any relief.
Ventura County motorists have helplessly watched prices jump several cents per day and are bracing for even tougher times after oil prices hit a new record Friday, trading at $139 a barrel, up nearly $11 from the previous day.
The county's average price for regular unleaded hit a record $4.38 a gallon Friday, which is up 20 cents since May 30 — the fastest one-week spike in five years — according to the Automobile Club of Southern California.
The last time gas prices ramped up so quickly was in August 2003, when there was a pipeline break in Arizona, and California diverted its supply to help out. There was a 25-cent increase that week, said Marie Montgomery, spokeswoman for the Auto Club.
This week's soaring fuel prices are bucking an historical trend. In recent years, gas prices have jumped in May before Memorial Day, then retreated some in June and July. Prices typically peak again in the fall.
"This has certainly been an unusual year," Montgomery said. "We have never seen our spring gas prices spike this much, going into June with full force like it's going now."
The high prices are altering people's habits. Some motorists are canceling road trips and running several errands in one trip to conserve gas. Others are making bigger changes, such as buying hybrid vehicles or moving closer to work.
A baffling situation
Adam Holland, a Ventura resident who works as a logistician at Naval Base Ventura County, plans to move to Camarillo within the next two months so his wife can bike to her job.
He estimates they spend about $1,000 a month on gas because they drive twice a week to Los Angeles to see a relative. They won't cut down those visits, but they have decided against making other trips.
Holland paid $4.45 a gallon to fill up his Volvo on Friday. He expects gas to reach $4.50 by the end of next week, and $5 by the end of the summer.
Montgomery and industry analysts say it's impossible to make price predictions, saying "we're in uncharted territory."
"Even though people know gas prices are going up, it sort of boggles your mind," Montgomery said.
It's especially baffling to Californians, who are paying more for gas than almost everyone else in the country. The state's average price for regular unleaded was $4.40 a gallon Friday, the highest in the nation, according to the Auto Club. Alaska and Connecticut were next at $4.30 and $4.27, respectively. The national average was $3.99 Friday.
More profit with diesel
Prices in other states peaked last week but have since fallen, Montgomery said. States such as Arkansas, Mississippi, Minnesota, Iowa and New Jersey recorded state averages far below the national average. Missouri and South Carolina are tied for the lowest average at $3.79, according to the Auto Club.
If crude surges to $150 a barrel, the national average is expected to hit $4.35 a gallon, said Fred Rozell, retail pricing director at Oil Price Information Service. It could hit $5 if oil jumps to $175 a barrel.
That would mean much higher prices in California, which trends 20 cents to 40 cents higher than the national average. In some parts of California, stations are closing in on or eclipsing $4.50 for regular unleaded, while premium is marching toward $5.
Based on fundamental supply and demand, there is no reason why consumers should see $5 a gallon, Rozell said. He thinks oil at $80 a barrel is reasonable, but that a weak dollar, the teetering stock market and the troubled housing market are fueling speculation, spurring investors to hedge against inflation.
California's prices have remained high because its refineries have shifted capacity to produce more diesel and less gasoline, Montgomery said.
Refineries are making the switch partly because they can make more profit with diesel, said oil economist Philip Verleger.
Diesel cost creates problems
A few of the state's refiners also have had problems coming back online after being down for planned maintenance, said Susanne Garfield, a spokeswoman with the California Energy Commission.
She said these problems have contributed to tightening supply and were part of the reason for oil's quick run-up Friday.
"Because our supplies are so thin, it doesn't take much to make supplies even thinner," she said. "I don't think anyone would have expected this kind of run-up in crude. Historically, it's one of the biggest jumps we've seen."
The market is still skittish, confronted by global supply issues, Garfield said.
High diesel prices, driven up by demand, are creating problems for everybody, from rocking the airline industry to increasing the cost of groceries, Verleger said.
Diesel prices have nudged down this week for the first time in months after refineries boosted output. The county's average price of diesel was $5.11 on Friday, down from a record $5.16 on May 31.
While some analysts have predicted gas selling at $5 a gallon in the coming months and oil surging to $200 per barrel by November, Verleger says it all depends on whether the U.S. Department of Energy alters its energy policies.
In a report, Verleger attributed rising costs to the department's resumption of adding sweet crude to the Strategic Reserve last August, which he said sent crude prices spiraling from $70 to $100.
"The market was allowed to get out of hand," he said.
On the Net:
http://www.fuelgaugereport.com
Posted by TOaksResidence on June 7, 2008 at 1:04 a.m. (Suggest removal)
Remember Enron? Just watch a documentary called "The Smartest Guys in the Room". The oil companies are doing the exact same thing to us as Enron did to us a few years ago. The oil companies claim "It's not the oil company, it's the market supply and demand." What they fail to tell us is that they have systematically manipulated the market at the supply end by reducing the supply at the refinery side. They have also reduced the market to where it's essentially a managed monopoly with all of the mergers and buyouts.
Folks, we are being dupped as much, if not more, than when the Enron thieves did.
If you know anyone in the boardrooms of these oil companies, you know they are laughing all the way to the bank, just like the Enron traders did.....Watch the movie, you'll understand just how corrupt these corporations really are.
Posted by jbh50 on June 7, 2008 at 7:27 a.m. (Suggest removal)
A litle paranoid TOaksresidence?
1) For the last 30 years Congress has fallen to the environmentalist pressures to wratchet up restriction after restriction on oil producers. It is not profitable for them to drill new wells or build new refineries in our country. They have had to go outside our country to do this.
2) Global consumption is on the rise, specifically China and India. Both of these countries governments subsidize oil pricing in order to stimulate economic growth.
3) OPEC still has the majority control on supply. If they decide to limit production, then we feel the pain.
4) The dollar is losing ground. This is a downward spiral due to the current lack of confidence in US economic growth.
5) Our elected officials receive higher margins per gallon of gas (we call that taxes) then the oil retailers.
Now, to say the oil companies have done all this to us and we are being duped by a very liberal media...well you must be living a very paranoid life. Why not see someone about that...I am sure they can prescribe something for you.
Posted by RedTail on June 7, 2008 at 7:56 a.m. (Suggest removal)
Blackisbk, Well, my Honda Accord takes about $60 to fill up. I don't have to drive far for work. If you actually want to joy ride on the weekends, you will have to pay double the amount you're paying now. If you like paying the extra money, that's fine and dandy. If I want to joyride, I can fill up twice what it costs for one tank with your vehicle. For people like me who drive a more economical car and can still afford gas as the prices go up, I'll still be on the road with you. I'll just kinda smirk when I pass ya up knowing I'm a little smarter with my money! My family makes a decent income, but I still like to save the money we make.
And just remember, it'll affect all of us even further for other goods and services. It's not just how much we fill up in our cars. Everyone's prices are going to go up and we're going to be paying for it in other areas as well.
Posted by Poppa on June 7, 2008 at 8:05 a.m. (Suggest removal)
When Bush took office gas was a $1.46 a gallon. The energy policy that put us on the path to $5 a gallon was written by the heads of the oil companies with Mr. Cheney, former head of Halliburton. Remember that Cheneny went to court to prevent the American people from reading the minutes of that meeting? Why? If you want change it is time to dump the GOP who is beholden to the big oil companies, Obama has my vote!
Posted by lizlemon on June 7, 2008 at 8:43 a.m. (Suggest removal)
The smartest people I know keep their money in their own pockets (or investment portfolios) and not in their gas tanks. These are the smartest of smart: MD's, PhD's, etc... Dedicated people who have invested in themselves, not in their cars. Any investment planner will tell you that a car is a terrible investment... or an expensive hobby.
Posted by JohnInSimi on June 7, 2008 at 8:55 a.m. (Suggest removal)
It's pretty easy to measure a person's soul who measures others by the number of square feet in realestate or the number of acres they own. Why is it easy? Because like so many people's gas tanks, it's on empty
Posted by harlan on June 7, 2008 at 8:56 a.m. (Suggest removal)
Eat the rich. It'll solve all of the problems we're having worldwide. The ones we don't eat we can convert into ethanol and/or diesel fuel.
Posted by imp9824 on June 7, 2008 at 9:01 a.m. (Suggest removal)
People, quit feeding the troll. He is obviously making ridiculous statements simply to anger and annoy you. Just ignore him. When he doesn't get the reaction he wants, he will try something else, and when he does not get that reaction he will try something else. If we ignore him long enough, he will go away.
Posted by jbh50 on June 7, 2008 at 9:06 a.m.
(This thread was removed by the site staff.)
Posted by cassandra on June 7, 2008 at 9:12 a.m. (Suggest removal)
There's more to come and maybe a few ways out, or at least through.
http://globalpublicmedia.com/how_do_y...
Posted by rebel123 on June 7, 2008 at 9:27 a.m. (Suggest removal)
Interesting new report on CNN last night that pointed to speculative investing in oil is driving the price up. They claim that over half the oil that is being sold is speculation purchases to be resold at a higher price days later. So basically, the fat cats are making big bank on our backs. Again.
Posted by cassandra on June 7, 2008 at 9:27 a.m. (Suggest removal)
And some icing on the cake--
http://www.nytimes.com/2008/06/07/bus...
And what time warp is this dude McCain caught in? Policies of the past advocating raising taxes? Hello, we've been cutting taxes especially on the rich and the corporations. Time to raise them on both.
It will be bad, it will be very bad. Our "non-negotiable life-style" for which we are wasting trillions wrestling the Iraqis for their oil, will come to a screeching halt shortly and for many already has. Those who depend on corporate media, especially Rupert Murdoch's products, will be blindsided. Again. Try Democracy Now! Alternet, Truthout, et al. Learn something.
Posted by THX1138 on June 7, 2008 at 10:03 a.m. (Suggest removal)
The silverlining is we're now seeing less SUV's on the road! woo hoo! Thankfully the trend is finally dieing.
The big-3 in Detroit are finally turning the corner after major losses and focusing on more efficient vehicles. Efficiency has been the focus for Europe & Asian companies for over 30 years. go figure...
Posted by socalcandyman on June 7, 2008 at 11:32 a.m. (Suggest removal)
MMSHOOT,
Right on!!!!! LOL
Posted by cassandra on June 7, 2008 at 11:50 a.m. (Suggest removal)
Call it schadenfreude, MM (sorry, my spell check doesn't do German), about the freude we are like to get now.
I've been told too many times by the ignorant, the stupid and the blonde to stop being so radical and far out, to adjust my tin foil and so on, no one much actually reading the links, no one reading much of anything else except corporate media BS.
And now, we are at peak, as predicted, we are in deep doo doo, as predicted. And WE ARE NOT READY as predicted.
It is not industry manipulation of gas prices, it is not tree huggers, it is not government action (except that the Bushies have consistently suppressed real information), it is not manipulated commodities markets, it isn't even the dollars nose dive (although that was predicted in the alternative press a long time past and certainly contributes), it's not very much the brain dead plan to attack Iran.
"It's still the oil, stupid."
It is late for the good ideas--local energy production, localized economy, locovores and permaculture, higher MPG, bike and pedestrian safe thoroughfares, improved rail and public transport, alternative renewable fuels and all the rest.
I can't make you think before you vote and maybe it doesn't matter. But peace would go further than just about anything else for freeing up tax dollars and scarce petroleum resources for civilian use.
Posted by cassandra on June 7, 2008 at 12:03 p.m. (Suggest removal)
In case one doubts that to talk more softly and maybe carry a smaller stick is in order--
http://www.reuters.com/article/reuter...
And it isn't just manipulation. Why should oil producing nations pump like there's no tomorrow when they make more profit husbanding their resource?
BTW Hugo has less in reserve than he claims but he's using it.
Posted by cast on June 7, 2008 at 12:41 p.m. (Suggest removal)
BLACKISBK
You say it is nice to be smater then other people.Good lord BLACKISBK.Who exactly are these people?.Can other people see them as well?.Your post name is BLACKISBK( black is back) hunny where exactly did you come back from.You are so into square feet.Perhaps you were in a 8x8 cell?."The people I know live on property that measures in acres" Does this property belong to the state dear?.Hopefuly all the poor imanginary people on your freeway will all go away.And you can drive any where your little heart desires.It's nice to be smarter then people.And have imaginary friends..
Posted by cassandra on June 7, 2008 at 12:54 p.m. (Suggest removal)
Good post, JW.
The inaction goes broader and deeper than this suggests.
And it wasn't just the feds.
Posted by imp9824 on June 7, 2008 at 12:57 p.m. (Suggest removal)
I will repeat: "Quit feeding the troll."
All he wants to do is rile people. He can say whatever he wants and there is no way to even see if he is telling the truth. Just ignore him. He will go away.
Posted by tsetsaf on June 7, 2008 at 1:13 p.m. (Suggest removal)
THE BASICS -- Oil IS a commodity -- commodities do not gain/ lose 10% in one day unless there is a serious change in supply or demand. There was not a serious change in s/d yesterday.
Although the first poster on this forum was slammed they are partially correct. The current price of oil is a reflection of market forces not true supply/ demand fundamentals.
If you have the nerve it may be a good time to bet on a fall; I am currently buying refinery and transportations. It will hurt for a while but in the long run will do well with a correction.
As long as stocks and bonds stay in their current trading ranges expect to see commodities moving as wildly as oil. There is a lot of money out there seeking above average returns. We are simply watching a repeat of the housing bubble.
Posted by waasup_H8RS on June 7, 2008 at 1:14 p.m. (Suggest removal)
it would be nice if people driving could have a little understanding and respect for those of us who choose to bike around to save money. I have at least 2 or three near hits everyday on my way to and from work
Posted by hemlock1262 on June 7, 2008 at 2:14 p.m. (Suggest removal)
One should ignore BLACKISBK if only because he can't spell "agitate."
What surprises me is that no one has trotted out Gallegly's favorite canard (shared by Hannity, Limbaugh and the other members of the Axis of Imbeciles), "we gotta drill in ANWR!"
So let me make a preemptive strike. Yes, let's drill in ANWR. Because it will help us. In the year 2027.
As the most recent report from the Energy Information Administration of the U.S. government's Department of Energy points out, at its peak, ANWR would theoretically produce 780,000 barrels of oil per day -- in 2027.
Assuming no OPEC offset (that is, OPEC doesn't reduce production to keep prices high), this will produce an estimated reduction in the price of a barrel of oil of $0.47. That's 47 cents. Nearly the price of a daily copy of The Star.
In 2027. Because it will take 10 years, according to the government, for a single gallon of gasoline to be produced from ANWR oil. And another 10 to get to peak production.
Even if legislation were passed, today, opening ANWR -- even if Bush signed an Executive Order opening ANWR -- it would take 2-3 years for any firm to navigate the Bureau of Land Management leasing requirements. A single exploratory well would take 2-3 years to get in, based on industry history and practices. Once oil is located, the BLM production plan approval takes 1-2 years. It would then require 3-4 years to construct feeder pipelines, fabricate oil separation plants, fabricate treatment plants, drill, and transport the oil to refineries -- assuming, of course, that the refineries have production slack to accommodate the oil.
We would "reduce our dependence on foreign oil," according to the government. For 4 years, from 2022 to 2026. By 4-7%. Starting in 2027, oil imports will climb back up, based on standard consumption models, because ANWR will start running out of oil.
SO yes, let's drill in ANWR. Because when BLACKISBK is driving his antique SUV 25 years from now, gas will come down in price.
And you'll be able to buy a copy of The Star with the money you save on a gallon of gas.
Posted by cassandra on June 7, 2008 at 5:06 p.m. (Suggest removal)
Nice post, Hemlock. Eloquent and well informed.
Posted by jbh50 on June 7, 2008 at 5:26 p.m. (Suggest removal)
jw1000,
No I actually work for a living. Not free to listen to talk radio at work.
Posted by missknowitall on June 7, 2008 at 9:40 p.m. (Suggest removal)
For all of you who like to blame the high price of gas the SUV, not all of us have families who fit in a damn Smart Car. (And no I don't have tons of kids) You people are pathetic blaming it all on the people who drive SUV's. Some of us do pay attention to how we drive and where we drive to conserve on gas.
Posted by missknowitall on June 7, 2008 at 10 p.m. (Suggest removal)
jw1000 there's more than 5 people in my family. When two people who have kids marry each other that sometimes happens. Where in my post did I say that there were 5 people in my family??? Maybe you should read a post before you try and trash it!
Posted by missknowitall on June 7, 2008 at 10:24 p.m. (Suggest removal)
Maybe they just liked the damn car. But people need to recognize the fact that some families need SUV's and they don't need people blaming them for the high gas prices. There are a lot of things that are effecting the price of gas. For you to blame the drivers of SUV's is ridiculous! By the way where are you getting your statistics??? So, when they stop building SUV's and families have to have two cars to go anywhere, you'll probably be the first one screaming about traffic too.
Posted by missknowitall on June 7, 2008 at 10:29 p.m. (Suggest removal)
My SUV is rated at 22 miles per gallon. Which isn't too much less than some people I know that have small cars and get 24 mpg.
Posted by live_for_purpose on June 7, 2008 at 11:50 p.m. (Suggest removal)
My family has a minivan and a Honda Accord. We try and take the car whenever we can to save on gas. The other night on a run to the SNA airport I got 24.5 mpg but that was driving slow--about 55 to 60 mph. It helped that there was not stop and go traffic. Sometimes we have 6 or 7 in the van. Sometimes only 3 or 4. If the state would help out on some kind of discount on registration for those people with 3 vehicles per family when there are only 2 drivers, that way you could better afford to have 2 more fuel efficient vehicles and just park the bigger one until you need it for a larger crowd (like when grandpa and grandpa come to town). Also, a break on car insurance would be nice, too. At least on the liability and collision part. After all, you can only drive 2 vehicles out of three at a time with only 2 licensed drivers in the house.
Also, remember, we are paying federal tax of 18.4 cents per gallon, state tax of 18 cents per gallon, and state sales tax of about 7.25% plus 1.2 cents per gallon for UST (underground storage tank fee) plus any local taxes, such as in L.A. county. So on $4.40 per gallon gas, that is about 35 cents per gallon for the sales tax. So, 18.4 + 18 + 35 = nearly 72 cents per gallon in taxes. That's about 16% taxes on gas. That's more than double what we pay to buy other products. We are the only state to impose a sales tax on the value of gas in addition to the per gallon excise tax.
Posted by eve805 on June 8, 2008 at 12:21 a.m. (Suggest removal)
My co-worker and I ride our bikes to work and we have been doing it for one month and we actually saved almost $300 on JUST GAS!!! =-)
Posted by rjlebeck on June 8, 2008 at 12:48 p.m. (Suggest removal)
The American people should be taking to the streets in protest of the price gouging and manipulations of the oil companies as well as at least thirty-five years of government inaction in the face of dwindling energy supplies. Instead we are like sheep led to the slaughter.
We have the technology today to begin breaking the monopoly of the oil-industry and their stooges in Detroit and Washington. The only way that things will change for the better is when the middle-class of this country grows a backbone and demands change. That is, if the middle class actually still exists.
There is no need to ban oil and fossil fuels, but the only way to bring down prices and begin to heal the planet is to provide clean alternatives for consumers that will introduce a concept long forgotten by free-market advocates: COMPETITION.
Again the technology already exists in providing relatively pollution-free vehicles as well as internal-combustion engines that run 70 mpg. The problem is that many of the patents are bottled up by the "energy" companies or are prevented from entering the market place by the oil industry. The inconvenient truth for the oil companies is that the planet will not sustain their attempts to squeeze the last dollar from consumers before finding the needed "breakthrough" in technology to stave the planet from war and asphyxiation.
Posted by UCSBguy on June 8, 2008 at 5:59 p.m. (Suggest removal)
I wanna buy a Vespa but people said it looks silly when you're driving it and only Europeans ride mopeds.. is this true?
Posted by live_for_purpose on June 8, 2008 at 6:41 p.m. (Suggest removal)
Let's all remember that electric cars indirectly burn primarily fossil fuel--primarily coal further east of here and natural gas out here in CA. We need a menu of good alternatives. How about slapping some solar photvoltaic cells onto cars and parking them in the sun? The problem is, you have to have either gas as well or plug in electric, not just solar cells. Hydrogen fuel cells are so far too expensive.
P.S. In my earlier post, I said CA was the only state to impose a sales tax based on the value of the sale (which I think used to be true). I read something today to question that statement. Anyone know for sure?
mmshoot--you can call me lfp or livefor for short
Posted by leahb78_1999 on June 9, 2008 at 3:44 p.m. (Suggest removal)
I believe the article is discussing a local issue with CA prices being higher than other states, and this does not have anything to do with the big oil execs or the nation's capital. This article is not about a Republican or Democratic issue, unless Californians are paying more due to state tax increases by our Democratic legislature.
Oh, and BTW... If you want to throw out stupid statements about how much gas went up when Bush took office, you should also look at how fast the gas prices went up under Bush with a Democrat-controlled congress versus a Republican-controlled congress
Posted by jbh50 on June 9, 2008 at 5:34 p.m. (Suggest removal)
Leah,
I agree, but trying to convince the thick-minded liberal mindset in socal that Bush has nothing to do with this is a uphill battle.
It ain't worth the energy.
Posted by Face on June 9, 2008 at 8 p.m. (Suggest removal)
Odd and Even is just around the bend.
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