Gas Prices Soar 51 Cents in Just Two Months - Page 4 - TigerDroppings.com

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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120346 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Those are all valid points

And the economics of the oil field industry can often be confusing and counter intuitive. Since the U.S. is a net exporter of refined fuels, that doesn't necessarily imply cheaper fuel just because you're close to refining facilities. The price goes up because they are selling to more than just U.S. customers.

Also cheaper crude can be more expensive to refine, hence the reason it is cheaper in the first place. If a refinery has the capabilities to refine the cheaper crude, that gives them an advantage over a refiner that doesn't.






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texashorn
Member since May 2008
1503 posts

re: Gas Prices Soar 51 Cents in Just Two Months


The fact that the Gulf Coast refineries are buying cheap and selling high kind of validates the point of those who argue that extending the Keystone pipeline will not necessarily lead to lower gas prices for Americans.





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funnystuff
Member since Nov 2012
818 posts

re: Gas Prices Soar 51 Cents in Just Two Months


It's not arbitrary. Gas prices are cyclic, they vary with the seasons. If you want to compare gas prices to the past, you need to compare them with the corresponding time frames.

That said, this conversation is pointless. Aside from the fact that no one has mentioned scaling oil prices for inflation, it has already been mentioned that oil is simply a commodity. It is not a predictor/indicator of economic success at all.

Oil prices fluctuate wildly with a minimal change in demand, so any indication value that oil prices has is minimal at best. The elasticity of demand for oil is estimated to be as low as 0.04. This means that a 4% increase in demand for oil corresponds to a $1 change in prices.

If we want to hold everything else constant (overly restrictive assumption, but hopefully it will get the point across), we can estimate that in the last 2 months, demand for oil has increased by 2%. This would be sufficient to produce the price jump we have seen. However, it is nowhere near sufficient to indicate economic recovery/improvement.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120346 posts

re: Gas Prices Soar 51 Cents in Just Two Months


I don't think the keystone pipeline will necessarily lead to lower gas prices

But that doesn't mean that it's not a good idea







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funnystuff
Member since Nov 2012
818 posts

re: Gas Prices Soar 51 Cents in Just Two Months


quote:

I read a good story in the Dallas newspaper that explained some of the price differential across the country, and some of it has to do with transporting oil to refineries, by rail, by sea or by pipeline, and some of it has to do with the world market.

Markets on the east and west coast find it cheaper to buy their oil on the world market, then refine it; buying oil from the Midwest and Texas is cost prohibitive. Brent crude costs more than West Texas crude, and that is reflected in the price of gas, but it would be even more expensive if the coasts had to send in "American" oil by rail.

The Midwest and Texas have a pipeline system set up to (relatively efficiently) get oil that is being taken from the ground in those areas to local refineries, then the product to local markets.

The wild card in all of this is world demand; fuel that is refined in Texas, for instance, is finding a much higher price overseas, so that's putting some upward pressure on local prices.

In short, the refineries in Texas, North Dakota, Louisiana are buying low, and selling high.

Cheap, "homegrown" oil is not equating to cheap gas for those areas.
quote:

I don't think the keystone pipeline will necessarily lead to lower gas prices

But that doesn't mean that it's not a good idea
Both true. And I agree, Keystone is an excellent idea. It will be extremely frustrating if this thing is blocked by politics.






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texashorn
Member since May 2008
1503 posts

re: Gas Prices Soar 51 Cents in Just Two Months


The pipeline extension would surely create a lot of jobs.

Edited for redundancy.



This post was edited on 2/18 at 5:12 pm


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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120346 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Personally I don't care if the keystone pipeline lowers gas prices

If it improves our infrastructure and makes us more competitive in the global market, that is a good enough reason to justify it for me.






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funnystuff
Member since Nov 2012
818 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Exactly. We desperately need to improve the pipeline infrastructure in this country. In addition, Keystone would actually be a far less environmentally dangerous option than our current situation. Right now, Texas has multiple tankers bringing in a shite load of barrels of oil into the US every single day. The keystone pipeline would alleviate a significant portion of that need. All these media members are complaining about the danger to the environment if the pipeline breaks, but no one considers the alternative a busted tanker. A ground cleanup is exponentially easier and cheaper than one in the gulf. But then again, few people truly care about the environment nearly as much as the political agenda it allows them to push. Also along the lines of these tankers, they come to us all they way from our "friends" in the middle east. If the straights of hormuz were to be shut off, we would be left high and dry on getting that oil. Having keystone in place provides us with an alternative to ensure we don't have an immediate, massive halt in imports. (End long rambling Keystone rant)

Aside from Keystone, we have enormous natural gas reserves which could be revolutionize our model of energy consumption. But there is no where near sufficient pipeline capacity for this to even be an option. And the problem is, there is no incentive for any firm to build additional pipeline because there is no money to be made on it.

This is one situation where government funding could actually do some degree of good. It would be awesome to see them step up and actually do something beneficial for our country for a change.

But I dream...






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cwill
New Orleans Saints Fan
Member since Jan 2005
23970 posts

re: Gas Prices Soar 51 Cents in Just Two Months


I heard some woman on CSPAN call in during the GW protests yesterday and bemoan the fact that if Keystone is permitted that it will be the end of the beautiful skies in Montana...seriously.

The main problem with discussing energy and energy policy with anyone outside of the industry - especially the E&P side - is how little is understood by the avg American about the business. The technical and economic sides...the Rs are just as bad as Ds in their own, different way.






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funnystuff
Member since Nov 2012
818 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Agreed. And for whatever reason, they seem adamant in avoiding getting advice from someone who actually understands the field. I never understand how someone can speak so confidently about something that they have absolutely no clue about. They certainly would never tell a doctor how to do a blood transfusion, but somehow they have all become self appointed experts in energy. But that's just the fricked up political/media culture we have created.


This post was edited on 2/18 at 6:36 pm


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conservativewifeymom
Maryland
Member since Oct 2012
565 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Here in my part of Maryland, the 'cheap' cash-only stations are $3.70 for regular. Shell, Exxon, etc. are $3.85 and climbing.





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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
23959 posts

re: Gas Prices Soar 51 Cents in Just Two Months


quote:

Obama says that high gas prices show that the economy is doing well


The last GDP print was -.1%. If 4Q12 doesn't gets revised upward by .2% points and 1Q13 comes in at <=0%, it's officially a recession. Are Obama policies improving the economy or worsting the economy? I'm pretty sure most of us know the answer to this question.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120346 posts

re: Gas Prices Soar 51 Cents in Just Two Months


quote:

Are Obama policies improving the economy or worsting the economy? I'm pretty sure most of us know the answer to this question.

I would say they are probably hurting the economy slightly

But his policies probably aren't having as much of an impact as people like to believe.






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Bestbank Tiger
Tulane Fan
Landmass
Member since Jan 2005
19227 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Ogump must be in the pocket of Big Oil. The President controls gas prices. I learned that in 2008.





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cajunpiranha
LSU Fan
Metaire
Member since May 2010
19 posts

re: Gas Prices Soar 51 Cents in Just Two Months


quote:

I want to know what happened last November when gas prices were supposed to be over $5 according to conservatives last summer.



Obama secured a promise from Saudi Arabia to increase production up too 30 million barrels; markets reacted crude decreased Saudis 4Q 2012 decrease production.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120346 posts

re: Gas Prices Soar 51 Cents in Just Two Months


quote:



Obama secured a promise from Saudi Arabia to increase production up too 30 million barrels; markets reacted crude decreased Saudis 4Q 2012 decrease production.


So Obama is actually responsible for LOWER gas prices?






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cajunpiranha
LSU Fan
Metaire
Member since May 2010
19 posts

re: Gas Prices Soar 51 Cents in Just Two Months


More like manipulated them prior to the election.

quote:

OPEC member countries, particularly Saudi Arabia, cut production heavily in fourth-quarter 2012, which contributed to an increase in crude oil prices at the start of 2013
AIE

The consumer pays in the end. Plus, We need to kick OPEC to the curb.

Calling my flight..






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Jake88
George Mason Fan
Member since Apr 2005
7908 posts

re: Gas Prices Soar 51 Cents in Just Two Months


So, if gas prices are so tied into the health of the economy, why did prices shoot up in April 2012 or at any time post crash during an anemic economy?





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funnystuff
Member since Nov 2012
818 posts

re: Gas Prices Soar 51 Cents in Just Two Months


Dude, Saudi Arabia is our biggest ally in OPEC. They basically won the Cold War for us. If they want to jack up their prices a little, we will gladly support that decision to protect our friendship.





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JabarkusRussell
Member since Jul 2009
9628 posts

re: Gas Prices Soar 51 Cents in Just Two Months


I thought gas was suppose to be cheaper in the winter due to winter blends? I can no longer afford to go out of the weekends because of gas which means I don't stimulate the economy.





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