Last night’s price notice shows that the tank wagon price (or the wholesale price, the price that gas station operators pay for the gas delivered to their location) went up 20.44 cents per gallon overnight.
That’s a 10% increase overnight. And yet the price of crude remains low. Hmmm.
So much for the boom in sales of pickups and SUVs.
@acemaster There is a simple explanation this time and one responsible party. He is the president of the union whose refinery workers are on strike, taking 20% of US refining capacity off the market. There is a mad scramble to keep stocks on hand and expensive gas is being imported from overseas. No different from a killing frost in Florida and its effect on orange juice prices. Except here it is the deliberate act of one person and his union.
The shortage is hitting Canada as well since there is a open North American market in fuels. There is no shortage of crude oil to feed into those idle refineries.
The strike, and there have been some refinery shut downs. So gas price will go up (low supply), crude will go down (low demand).
Yeah I thought it was refinery issues too. My cars are full though but we still have a refinery capacity problem I believe. And speaking of orange juice, Florida is having a problem with a fungus killing the trees.
My favorite gas station (Kroger) also went up 20 cents over night. A quick check showed that everyone else did the same thing as well in my area. Collusion perhaps?
Hmmm…My local Costco jacked up the price per gallon by a usurious 2 cents, making for a price of $1.99.
Anticipating, not reality.
The refineries are apparently continuing to operate at “near normal” capacity. When I worked at a plastics plant (similarly high automation) the union threatened to strike. We salaried folks were all training to keep it running which would entail 12 hour shifts with no days off. We would be paid overtime and boasted to the union guys about all the new cars we were going to buy. (They were actually a great bunch of operators and we all got along well.) Alas, no strike.
The oil glut is higher now that it has been in a long, long time and the reserves keep growing. There was a story on the radio (Market Watch) that discussed it. Don’t expect the price hike to last too long.
Don’t expect the price hike to last too long
I agree. I agree also that I never expected the depression in prices to remain constant either. There may be a general trend downward on oil prices over time, but there are too many other factors other then supply that can cause spikes, one way or the other. Technology is advancing at a rapid rate and who knows what new energy sources that will be competitive tomorrow that we never thought of that way today.
The advancement in wood pellet stove technology for example, has them burning at efficiency rates higher then many oil burners now in service and they are carbon neutral. http://www.woodpellets.com/for-our-globe/carbon-neutral-heat.aspx/for-our-globe/carbon-neutral-heat.aspx
They operate like a burner with a thermostat, can be installed anywhere and are making a significant impact on home oil consumption for those without access to natural gas. Plus, seldom does a home appear on the news to be blown to a million pieces becasue of a,“pellet leak”.
One thing is for sure, diesel, jet fuel etc. has a pretty strong demand while gasoline demand seems to be dropping. I know everyone would love a small diesel truck, but even with a glut of oil, disel will remain relatively higher and be much more difficult to conform to polution standards. These are more then a few subtle factors that keep prices from being predictable.
I converted my truck last year to run on my wife’s cooking.
The only problem is when you want to stop. You have to crawl half way out the window, so you can toss a couple of Rolaids into the digester.
@Yosemite: I’ll bet the exhaust doesn’t smell so good either
It depends whether it is your own exhaust or not.
The problem is mostly confined to California where a big Exxon refinery had an explosion causing heavy damage…This immediately tightened up the California market…
Petroleum Workers Unions have watched the big oil companies reap windfall profits, record setting profits over the last 5 years…So now it’s contract time and they are going to spread that money around a little more equally…
Some states gas tax rates (Iowa for one) have just risen too, which could account for part of it.
My price in Minnesota went up to about $2.36 over the past week. A lot of states are jumping on the low price bandwagon to quick raise the taxes while they can. I imagine there are some crestfallen faces now that the prices are heading up again and they may have lost the opportunity. Not that it is not needed in some cases, but in Minnesota we need to clearly define what is used for roads and bridges and what is used for mass transit and bike paths-just like it used to be. Then I’ll support a tax increase. So far they just want to talk about where a new tax would go and not talk about where the current funding is going-like train stations and tunnels while bridges rust. All we want is a clear accounting of where it comes from and where it goes and what is needed, although it is a complicated funding process, maybe by design.
Like my grandfather in the catering business said, if you need eggs, it does not matter what they cost. There are many people the price of gas goes up, money for groceries goes down. A gas tax is like Jessie Jacksons ham and egg politics. For the poor it is like a pig giving up a ham, for the rich it is like a chicken giving up an egg.
Your grandfather was a wise man but yet we all have to contribute for what we use. We don’t allow poor people to steal from grocery stores so we all need to pay for the roads and bridges we use.
Petro-World wants and needs $100/barrel crude oil and they are going to have it back just as soon as the necessary arrangements can be made…
Your grandfather was a wise man but yet we all have to contribute for what we use. We don't allow poor people to steal from grocery stores so we all need to pay for the roads and bridges we use.
Not pay? Uh, yes.
Not trying to be political, just correcting an (implicitly) incorrect statement. One who is “poor” is not likely to be required to pay for groceries out of pocket. Now, whether that is good, bad or indifferent…is a subject for another website…but it is what it is!
And BTW, oil is priced where it is as a means of discouraging Putin’s imperial inclinations. Once he’s been sufficiently punished (or, alternatively, once he’s punished his punishers) prices will revert to “normal.”