Another Fuel Prices Post

[eyepatrol]

It's nice to see that fuel prices have decreased over the past couple of weeks. Although they are still way too high, my wife told me she saw $2.48 yesterday. With a 25 gallon tank and prices being about $0.60/gal less than a month ago, we're spending $15 per tank less. Again, I like it, but it could be a whole lot better.

Anyone hear on the news the other night about the oil that was found in, I can't remember where, the Gulf maybe? Early estimates are that the underground reservoir contains somewhere between 5B and 15B barrels of oil....about 50% of the US usage (or something along those lines). They say it will take quite some time to actually get it to a point where it's being used. But the thing I found funnier than hell was the comment that it will cost "billions" of dollars to build what it takes to get this stuff. Oh I feel so sorry that it will cost billions of dollars.....NOT. Heck, they get billions of dollars in profit each QUARTER! Who do they think they're trying to fool?

[hanson]

$2.39 by my place in Plymouth.

[Rost]

This is sad to say, but I'd be tickled pink just to pay $2.00 anymore. After paying $3.00 for a few months, $2.00 looks cheap.

[efgh]

The oil find was off shore in the gulf 2 to 3 hundred miles in the news release I read, when the enviro_-mental_ests, I spelled that right,the states that claim off shore rights, and other countrys, who claim it is in territorial waters, and Mexico get done fighting over who gets the revenue and whether any one can drill in that area, 10 - 15 years will pass. Is this another Alaska? Just my op inion.

[eyepatrol]

That's it...we're moving to Plymouth!

I agree, $2 is still a bit high IMO, but it's a number I could live with. Anywhere from $1.75 to no more than $2.25.

[Gissert]

Nice to see the gas prices drop, now if diesel would just follow suit....

[harvey lee]

I wonder if the cheaper prices will hold even after the elections this fall.It may just be a ploy to make it look like they are trying to do something for a good jesture to the public for your vote.For the time being the prices are nice as the fall is the time of year that I use gasoline the most.Funny thing is the deisel for our race hauler is still just as bad as ever.

[nytelyter]

couldnt agree with you more harvey lee. the prices have gone up due to politics and will drop to do just that. give them a good look. however i still say if it has an I (incumbent) pass it by this fall in the booth. get some new blood in the house and senate. ... paul

[Ole the Guide]

Funny how gas prices seem to drop just in time for the 2006 elections....

Hmmmmmmmm! I see a pattern here..

Ole

[IFallsRon]

Think about the cost of technology to drill seven miles below the surface of the Gulf of Mexico.

I've read that the Gulf is a difficult place to explore due to undersea currents and occasional hurricanes.

[fishinchicks]

I wouldn't be that extreme, to vote for anyone else but the incumbent. In our area, the challenger is proposing much worse than what the incumbent has done for us. A better approach would be to study who your candidates are (all parties), and choose based on your knowledge, not just name recognition.

[BobT]

[harvey lee]

I agree with fishinchicks totally. I dont vote party,I vote for the person.

[broncosguy711]

I have a website that I go to that tells me the lowest cost within 5 miles of my house. so I have been saving 100's of dollars driving a extra 50 miles j/k. anyone interested let me know as I figure I can not post it here as not a sponsor.

Broncs

[email protected]

[JollyT]

Gas stocks are up for now, so the price is dropping. If we hear more bad news the speculator's will drive the price back up again. What you want is no more hurricaines or mideast problems.

The oil in the deep part of the gulf has been known about for years. It's just too expensive to try to drill for unless oil is at $50 a barrel or more.

The diesel guys won't be getting a break. It's basicly the same fractions as home heating oil. Guess what stock needs to be built up this time of year?

[rosspj59]

There was an article in the Press last week that for the past few years in september gas prices drop and are the lowest until the next quarter every year. Just in time for the good fall bite. I hope they keep dropping and natural gas goes down too.

[Gissert]

Yep - Diesel and home heating oil are nearly identical. Jet fuel/kerosene is in that spectrum too.

[Doonbuggy]

For all the political conspiracy theorists out there regarding gas prices, JollyT has it right. The prices are down because of the following:

> End of summer driving season

> Truce in mideast continues to hold

> Minimal hurricane activity

> Discovery of a potential boatload of oil in the Gulf of Mexico.

When prices were high, what did we have? We had a war in the mideast, which happened to be right in the middle of the summer driving season, expectations were high for an active hurricane season and there wasn't a word about a potential goldmine of oil in the gulf.

In addition, all the oil companies these days are publicly held. I don't buy for a second that they would suddenly decide to drop their prices by 25% just because of impending elections.

Surely if there was proof of this the Democrats would bring it up! Talk about Watergate x 100!!

It still comes down to supply and demand. Unfortunately, long term, these lower gas prices are not good. Until we get gas to $4-5 a gallon there will not be strong incentive to develop a program where we wean ourselves off of oil.

DB

[Team Otter]

You're right on the mark harvey lee.

[iffwalleyes]

Diesel is better than it was but it still is up there. I am paying about $0.40 a gallon less than a month ago. It helps but diesel over $3.00 is still plain wrong? You know things are wrong when you see $3.04 for diesel and get excited about it. But then you remember it was $3.44 a few weeks ago so it does seem better then. I would love to see it get back to around $2.50 again but with the winter heating season coming up I don't expect it.

[harvey lee]

Doonbuggy,the democrats get there slush fund money also.They need it just as bad as the other parties.The politicans have the oil companies cut the price and many people will think they are doing there jobs.Once re elected then the big oil can go back to plan A-Billions in profits.Its all a big game.

I am not saying other things dont factor in,but the politics issue is a BIG one.

These posts should probably be in the Political forums.

[Down Deep]

I think that the price went down because when the price hit $3.00 a lot of people had enough and quit driving so much causing a supply surplus.

[Gordie]

Harvey Lee is right its all about pollitics and yes some other factors due dictate it but pollitics out weigh everything else.

[yaggie]

Its supply and demand. I think everyone reading this board has conserved on fuel in some way since gas ran over $3.00. Some concerved without even thinking about it, either one less trip somewhere or taking the car instead of the truck or even using a electric trolling motor rather than the outboard. As for diesel you still have the extra cost built in due to low sulfer requirments which requires additional refining. Its interesting though as we now think that $2.00 gas would be a bargain.

[John Mickish]

We are coming up on an election with a Republican control on things and a Republican oil man as President. They want to keep it that way so of course the cost of gas will go down hoping you will forget about the $3.14 prices of this summer and promting you to make a political change.

I don't know if that is 100% true but it could be???

[hanson]

Supply & Demand? Thats BS!

Did everybody in America stop driving this week or what? Come on now. You guys have to quit believing that BS.

Most of America has a job. Most of America has to drive to that job. Most of America has to drive to the grocery store. Most of America has to drop their kids off at the baby sitter via a gas powered vehicle. Every American has a certain routine in their daily life that involves driving, and using gas. Thats a fact and it is a constant.

So what about business? The landscapers & lawnmowers are using fuel. Construction is using fuel. UPS & Fedex are still shipping packages and using fuel. OTR trucks are still delivering goods to us and using fuel.

Where is it that the demand has slacked? People taking summer vacations? Seriously now... Are our summer vacations really using up that much gas?

[DinkADunk]

Well, if your interested in having some real numbers to work with instead of the inane nonesense spouted in these threads try reading the "Weekly Petroleum Status Report" put out by the Energy Information Administration. If you can't deal with numbers then read the summary "This Week In Petroleum".

From the highlights

Quote:

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In 2005, retail gasoline prices were generally rising through the first 8 months of the year, with August 2005 prices rising sharply. Then, with Hurricane Katrina at the very end of August knocking out oil production platforms in the Gulf of Mexico, refineries along the Gulf Coast, and electricity for pipelines, gasoline prices saw the largest one-week rise ever recorded on EIA’s pump price survey on September 5, 2005. But as crude oil and gasoline flows were partially restored, retail prices began to fall, only to witness another run-up, as Hurricane Rita came ashore in late September 2005. By early December, pump prices had fallen as low as $2.15 per gallon, as by then, oil infrastructure conditions had improved significantly in the face of much lower off-season gasoline demand. However, by later in December 2005, gasoline prices began another long upward trend through much of 2006, although not without occasional interruptions stemming from temporary market softness. More recently, consumers saw retail prices turn downward several weeks early this year, well before the Labor Day end of summer, as the market determined that more than enough supply remained on hand to satisfy demand through the peak season. The average U.S. retail gasoline price for regular gasoline has dropped 31 cents per gallon over the last 4 weeks, from $3.04 per gallon to $2.73 per gallon as of September 4, 2006. Several states already have average gasoline prices below $2.50 per gallon, and some retail stations in Ohio are now selling regular gasoline for under $2.20 per gallon, according to Gasbuddy.com.

Based on spot prices of gasoline, it looks like the retail drop will likely continue, at least for the next few weeks, in most regions of the country. But how much further they drop and for how long, will be determined by many factors yet to play out. While the price for West Texas Intermediate crude oil has recently dropped below $68 per barrel, future price developments are highly uncertain. Many of the factors that caused crude oil prices to reach $70 per barrel (lack of spare production capacity, strong global demand growth, concerns about supply disruptions) remain, although some, such as worry over oil infrastructure damage from hurricanes, have been pushed aside, at least temporarily. While consumers can expect that retail gasoline prices will continue to drop over the near-term, prices will rise again somewhere further down the track if the recent roller coaster pattern of gasoline prices continues.

---

[BobT]

I'm not so sure I buy the "politics" argument. Historically, we haven't seen any real repetitive evidence along those lines. If politics was involved so heavily as claimed here we would see a trend every couple years. Throughout all of the 1980s and 1990s the price of gasoline didn't even rise to the rate of inflation and in fact remained very constant at around $1.25 per gallon give or take a few pennies.

I also don't buy the seasonal fluctuation argument. Again, historically the prices haven't been seen to seasonally fluctuate more than a few pennies. This latest rise and drop in 2006 was a bit more than just a few pennies. We haven't seen this significant a price increase since the oil embargo days of the late '70s.

I have argued supply and demand in previous posts but only to the point to which the prices are at and what we as consumers can do to counter them but I don't buy supply and demand as the cause for the sudden dramatic increase in 2006 and now the again dramatic decrease. That argument doesn't hold water.

I believe it has a lot to do with public trading. Like other stocks, world economics, politics, and events play a huge role in what traders are willing to pay for a commondity or stock.

Bob

[Doonbuggy]

Very interesting information....a couple more thoughts:

I have a tough time believing in the politics portion of the gas price debate. Not to get into the political side, but all summer Bush's poll ratings were around 35-40% approval and he was getting hammered for it.

And yet gas prices continued to increase which certainly didn't help him politically. All Americans are hurt by high gas prices so I would think if there was something he could do to drop the price of oil he would have. I think that shows how our government has very little control over the price of oil.

Also, oil markets, traders and all those people like certainty and calm. Right now we have that and that is a big reason why prices are falling. A couple of months ago we didn't have that (mideast, expected hurricanes, etc.) so prices were higher.

Finally, if prices are easily manipulated where is the incentive to drop prices (why now?) and why so much?

DB

[iffwalleyes]

Quote:

---

Supply & Demand? Thats BS!

Did everybody in America stop driving this week or what? Come on now. You guys have to quit believing that BS.

Most of America has a job. Most of America has to drive to that job. Most of America has to drive to the grocery store. Most of America has to drop their kids off at the baby sitter via a gas powered vehicle. Every American has a certain routine in their daily life that involves driving, and using gas. Thats a fact and it is a constant.

So what about business? The landscapers & lawnmowers are using fuel. Construction is using fuel. UPS & Fedex are still shipping packages and using fuel. OTR trucks are still delivering goods to us and using fuel.

Where is it that the demand has slacked? People taking summer vacations? Seriously now... Are our summer vacations really using up that much gas?

---

My thoughts exactly. I know my use of fuel hasn't declinded probably has increase. I have to use my truck for work therefore I need fuel. If I don't have fuel I don't work it is as simple as that for me.